Multimedia Games, Inc. v. Wlgc Acquisition Corp.

• Citation: 214 F.Supp.2d 1131
• Decision Date: 18 April 2001
• Docket Number: No. 99-CV-0723C.,99-CV-0723C.
• Parties: MULTIMEDIA GAMES, INC., A Texas corporation, Plaintiff, v. WLGC ACQUISITION CORP. (a/k/a Worldlink Gaming Corp.) an Oklahoma corporation, Miami Tribe of Oklahoma Business Development Authority, a Miami Tribe of Oklahoma Corporation, Magellan Resources Group, A Canadian Corporation, Magellan Gaming Technologies, Inc., a Canadian Corporation, Ron Harris, an individual, and Nelson Johnson, an individual, Defendants.
• Court: U.S. District Court — Northern District of Oklahoma

214 F.Supp.2d 1131

MULTIMEDIA GAMES, INC., A Texas corporation, Plaintiff, v. WLGC ACQUISITION CORP. (a/k/a Worldlink Gaming Corp.) an Oklahoma corporation, Miami Tribe of Oklahoma Business Development Authority, a Miami Tribe of Oklahoma Corporation, Magellan Resources Group, A Canadian Corporation, Magellan Gaming Technologies, Inc., a Canadian Corporation, Ron Harris, an individual, and Nelson Johnson, an individual, Defendants.

No. 99-CV-0723C.

United States District Court, N.D. Oklahoma.

April 18, 2001.

Donald Lee Kahl, John Frederick Heil, III, Hall, Estill, Hardwick, Gable, Golden & Nelson, Tulsa, OK, Heather Elizabeth Brown, Williams Companies, Inc., Tulsa, OK, for plaintiff.

Frederick C. Cornish, Harlan Sykes Pinkerton, Jr., Fred C. Cornish, Inc., Tulsa, OK, for Magellan Resources Group and Magellan Gaming Technologies, Inc.

Clark Otto Brewster, Michael L. Barkett, Brewster & De Angelis, PLLC, Tulsa, OK, Daniel Brent Graves, Shallcross, Graves & Assoc., Tulsa, OK, for Ron Harris, Nelson Johnson, and Miami Tribe of Oklahoma Business Development Authority.

ORDER

H. DALE COOK, Senior District Judge.

Before the Court is the motion for summary judgment filed by defendants, Ron Harris ("Harris"), Nelson Johnson ("Johnson"), and the Miami Tribe of Oklahoma Business Development Authority ("MBDA") (collectively referred to as "defendants") pursuant to Rules 19 and 56 of the Federal Rules of Civil Procedure. Plaintiff Multimedia Games ("Multimedia") has sued for alleged copyright infringement, misappropriation of trade secrets, unfair and deceptive trade practices, breach of contract, conversion, breach of fiduciary duty, and unfair competition. Federal jurisdiction was established under 28 U.S.C. §§ 1331, 1338, and 1367. Multimedia seeks injunctive, declaratory, and monetary relief against all defendants as well as those in active concert or privity with defendants. Defendants contend that there exists no genuine issue of material facts and that they are entitled to summary judgment as a matter of law.

On February 18, 2000, defendants filed their motion for summary judgment. Plaintiff filed its response on June 7, 2000, and defendants filed their reply on June 19, 2000. On November 16, 2000, this Court struck the previous scheduling order setting forth pretrial deadlines in order to properly consider the motion for summary judgment. After consideration of the briefs, exhibits, arguments of the parties and applicable law, the Court finds and concludes as follows:

Undisputed Statement of Facts

1. Multimedia is a Texas Corporation having its principal place of business in Tulsa, Oklahoma. Its business concerns designing, developing, marketing, maintaining, and operating various computer based gaming equipment and software.

2. On March 15, 1999, Worldlink Gaming Corporation merged with and into WLGC Acquisition Corporation.

3. MBDA is a corporation formed under the laws of the Miami Tribe of Oklahoma and is the surviving entity following a corporate merger with WLGC Acquisition Corp. (a/k/a Worldlink Gaming Corp.) ("Worldlink").

4. Harris is a resident of Tulsa and until September 1996, was a sales manager of the Electronic Games Division of Multimedia. Harris later became a principal of Worldlink and now serves as principle of MBDA.

5. Johnson is a resident of Tulsa and until September 1996, was the President of MegaBingo, a wholly owned subsidiary of Multimedia. Johnson was later affiliated with and employed by Worldlink, and now serves as a principal of MBDA.

6. Johnson and Harris had access to a computer and certain company information when they were employees of Multimedia.

7. Upon leaving Multimedia, Harris, Johnson, and other former Multimedia employees started Worldlink, an Oklahoma corporation incorporated on September 18, 1996.

Allegations of the Parties

Multimedia alleges that all defendants have infringed and continue to infringe Multimedia's copyright related to the subject work by producing, distributing, and placing upon the market products which contain direct copies of Multimedia's copyright subject work. Multimedia further contends that Harris and Johnson owed it a fiduciary duty and violated that duty by converting the proprietary and confidential information of Multimedia for their own benefit. Furthermore, Multimedia claims that Harris and Johnson have and continues to wrongfully exercise dominion over Multimedia's property without permission from and to the detriment of Multimedia. This alleged conversion and misappropriation of property is claimed by Multimedia to constitute breaches of implied contractual terms existing between defendants Harris and Johnson and plaintiff Multimedia. Additionally, Multimedia contends that Harris and Johnson's alleged misappropriation and unauthorized use of Multimedia's trade secrets are in violation of the Oklahoma Trade Secrets Act. Finally, Multimedia argues that all defendants' actions constitute unfair competition and deceptive trade practices in violation of the Oklahoma Deceptive Trade Practices Act and the common law of Oklahoma.

Defendants claim that the MBDA is immune from the lawsuit under the doctrine of tribal sovereign immunity; and thus, defendants contend that this Court lacks jurisdiction over the MBDA, as it is a sovereign tribal entity. Furthermore, defendants claim that the MBDA is a necessary and indispensable party to the lawsuit under Rule 19 of the Federal Rules of Civil Procedure ("Rule 19"). Defendants further contend that because the MBDA is a necessary and indispensable party which cannot be sued because of the tribal sovereign immunity, the case cannot proceed against any defendant without the MBDA. Additionally, defendants argue that any alleged infringement or misappropriated property was: 1) not properly registered, 2) misused by plaintiff, 3) not copyrightable material, 4) abandoned, or 5) within the public domain.

Standard of Review

The standard for granting summary judgment is rather strict. In considering a motion for summary judgment, the Court "has no real discretion in determining whether to grant summary judgment." U.S. v. Gammache, 713 F.2d 588, 594 (10th Cir.1983). The Court must view the pleadings and documentary evidence in the light most favorable to the nonmovant, See Cone v. Longmont United Hosp. Ass'n, 14 F.3d 526, 527-28 (10th Cir.1994), and summary judgment is only appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). "A dispute is genuine only if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Akin v. Ashland Chemical Co., 156 F.3d 1030, 1034 (10th Cir.1998). "`[T]he moving party carries the burden of showing beyond a reasonable doubt that it is entitled to summary judgment.'" Hicks v. City of Watonga, 942 F.2d 737, 743 (10th Cir.1991) (quoting Ewing v. Amoco Oil Co., 823 F.2d 1432, 1437 (10th Cir.1987)). However, once the moving party meets its burden, the burden then shifts to the nonmoving party to demonstrate a genuine issue for trial on a material matter. Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir.1991). The "party opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials of his pleading, but ... must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (citations omitted).

Discussion

In this action, defendants argue that plaintiff's claims against them fail as a matter of law. Their contention is based on the fact that one of the defendants, which is allegedly sovereignly immune, is also a necessary and indispensable party as prescribed by Rule 19. Defendants argue that because the MBDA, as a tribal economic enterprise, is allegedly immune from suit, the case cannot proceed without them and, accordingly, defendants are entitled to summary judgment in their favor.

It has been a part of this nation's long-standing tradition that Indian tribes possess common-law sovereign immunity from suit akin to that enjoyed by other sovereigns. See Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 56 L.Ed.2d 106; see also National Union Ins. Cos Lodge Grass School Dist. No. 27 v. Crow Tribe, 471 U.S. 845, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985) (finding that Indian tribes and the federal government are dual sovereigns and occupy a unique status under the law). Furthermore, Supreme Court precedent establishes that tribal corporate and economic entities created by the Indian Nation to further governmental objectives possess attributes of tribal sovereignty and cannot be sued absent an immunity waiver. See Kiowa Tribe of Oklahoma, 523 U.S. at 757-58, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998), Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996).

A tribe's sovereign status is directly related to its ability to generate revenues through the regulation of commercial activities on the reservation. The ability to contract as an economic entity impacts the tribe's fiscal resources by binding or obligating the funds of the tribe. It follows that corporate contractual provisions are actually economic matters which directly affect a sovereign's right of self government. In this way, the business entity is simply the tribe's alter ego; and thus, the real party in interest is the tribe because the vulnerability of the tribe's coffers is at issue when contracting in a commercial environment.

This Court holds that the MBDA is an arm of the Miami tribal government and possesses attributes of tribal sovereignty that preclude suit against it absent a waiver of immunity. Because the MBDA is a...