Ryan Harvey, Rocks Off, Inc. v. Ute Indian Tribe of the Uintah

• Decision Date: 07 November 2017
• Docket Number: No. 20160362,20160362
• Citation: 416 P.3d 401
• Parties: Ryan HARVEY, Rocks Off, Inc., and Wild Cat Rentals, Inc., Appellants, v. UTE INDIAN TRIBE OF the UINTAH AND OURAY RESERVATION, et al., Appellees.
• Court: Utah Supreme Court

416 P.3d 401

Ryan HARVEY, Rocks Off, Inc., and Wild Cat Rentals, Inc., Appellants,

v.UTE INDIAN TRIBE OF the UINTAH AND OURAY RESERVATION, et al.,¹ Appellees.

No. 20160362

Supreme Court of Utah.

Filed November 7, 2017

Clark B. Allred, Bradley D. Brotherson, Vernal, UT, John D. Hancock, Roosevelt, UT, for appellants

Christopher R. Hogle, Karina Sargsian, J. Preston Stieff, Patrick S. Boice, Craig H. Howe, Deborah Chandler, Salt Lake City, Calvin M. Hatch, South Jordan, UT, Daniel S. Press, Washington, D.C., for appellees

Justice Durham authored the opinion of the Court in which Judge Toomey joined.

Associate Chief Justice Lee authored a dissenting opinion with respect to Part IV of the majority opinion, in which Chief Justice Durrant joined.

Having recused himself, Justice Pearce does not participate herein; Court of Appeals Judge Kate Toomey sat.

On Direct Appeal

Justice Durham, opinion of the Court:

INTRODUCTION

¶1 The oil and gas industry is a major economic force in the Uintah Basin. This industry relies, to some extent, on access to the Uintah and Ouray Reservation of the Ute Indian Tribe. The plaintiffs allege that, through its ability to restrict the industry’s access to tribal lands, the tribe has held hostage the economy of the non-Indian population.

¶2 Ryan Harvey, a plaintiff and part owner of the two corporations that are the other plaintiffs in this case, alleges that tribal officials from the Ute Tribe attempted to extort him by threatening to shut down his businesses if he did not acquiesce to their demands, despite the fact that his businesses do not operate directly on tribal land. After his refusal to make certain payments, the tribal officials sent a letter to the oil and gas companies operating on tribal land informing them that they would be subject to sanctions if they used any of Harvey’s businesses. The tribal official’s letter dried up a large portion of Harvey’s business, and Harvey brought claims against the tribe, the tribal officials, various companies owned by the tribal officials, oil and gas companies, and other private companies he alleges are complicit in this extortionate behavior. Most of the defendants filed motions to dismiss on various grounds and the district court dismissed Harvey’s claims against all of the defendants. On direct appeal, Harvey seeks to set aside the dismissals. We affirm the dismissal of the Ute Tribe under sovereign immunity and the dismissal of Newfield, LaRose Construction, and D. Ray C. Enterprises for failure to state a claim upon which relief can be granted. But we vacate the dismissal of the remaining defendants and remand for further proceedings consistent with the tribal exhaustion doctrine.

¶3 Given the somewhat unique character of this opinion, we take this opportunity to explain the outcome. All sitting members concur in the entirety of the opinion, except for Part IV, in which Chief Justice Durrant and Associate Chief Justice Lee dissent. Justice Himonas concurs in all of the analysis in the majority opinion and writes separately to further explain his reasons for joining. The majority opinion incorporates Justice Himonas’s concurring opinion.

BACKGROUND

¶4 The Ute Tribal Employment Rights Office (UTERO), a subdivision of the Ute Tribal government, manages the tribe’s business activities and internal affairs. There are three members of UTERO who are named parties in this action: Director Sheila Wopsock, Commissioner Dino Cesspooch, and Commissioner Jackie LaRose (collectively "tribal officials").

¶5 Ryan Harvey and his wife, as beneficiaries of their respective trusts, own Rocks Off, Inc. and Wild Cat Rentals, Inc. Rocks Off derives most of its income from providing dirt, sand, and gravel to oil and gas companies including Newfield.² Wild Cat Rentals leases heavy equipment to other companies and individuals. Both are located on private fee land and do not directly access Ute Tribal land, but the items they sell and lease are often used on tribal land by the leasing or buying companies.

¶6 Beginning in late 2012, Commissioner Cesspooch began demanding that Harvey obtain permits for his businesses from the UTERO Commission or Commissioner Cesspooch would "shut [them] down."³ Harvey attempted to explain that his businesses did not operate directly on tribal land, so he should not need a permit; however, Commissioner Cesspooch continued to put pressure on Harvey by allegedly threatening to impound all of his heavy equipment.⁴ Harvey eventually relented and obtained a Ute Business License and an Access Permit from UTERO for Rocks Off.

¶7 Shortly after Harvey obtained the license and permit, Commissioner Cesspooch claimed that the license and permit were forged. Harvey met with Commissioner Cesspooch and discussed the issue. After the meeting, Harvey believed that the misunderstanding had been corrected and that Commissioner Cesspooch was no longer challenging the validity of the documents.

¶8 Not long after the meeting, Harvey was driving down a road off of tribal land when Commissioner Cesspooch "pulled his vehicle next to [Harvey’s] and aggressively pointed for him to pull over." After pulling into a parking lot, Commissioner Cesspooch and Harvey had a conversation, during which Commissioner Cesspooch told Harvey that he "sure needed a good riding horse." Harvey understood this to be a demand for a bribe, but did not agree to pay or pay any money at that time.

¶9 On March 15, 2013, soon after the incident with Commissioner Cesspooch, Harvey received a letter that was sent by the UTERO Commission and signed by Director Wopsock. It stated,

[T]he Director of the [Energy and Mineral] Department has decided to revoke your access permit effective immediately. ...

The UTERO Ordinance necessarily requires that all employers subject to its Ordinance be lawfully permitted on the Reservation to perform work. Without lawful entrance upon the Reservation, Rocks Off, Inc. fails to meet the minimum standard to perform work under the provisions of the UTERO Ordinance.

In addition to the above described actions, this letter also serves as a formal notice ... that the UTERO Commission believes that you are not in compliance with the terms of the [UTERO] Ordinance. Specifically, the UTERO Commission has reason to believe that your company has been engaging in potentially fraudulent activities, including the submission of false and inaccurate official tribal, state, and federal documents. ...

¶10 Then, on March 20, 2013, the UTERO Commission sent a letter to "all Oil & Gas Companies." It stated that "Rocks Off, Inc.—Ryan Harvey," along with another business that is not a party to this case, no longer had access permits "for failure to comply with the UTERO Ordinance ...." It went on,

As a result of such action, these businesses and individuals are no longer authorized to perform work on the Uintah and Ouray Reservation. Any use of these businesses and individuals by an employer doing work on the Reservation after receipt of this Notice may result in the assessment of penalties and/or sanctions against such employer to the fullest extent of the law.

¶11 After receiving this letter, Newfield and other oil and gas companies ceased using Rocks Off, and ceased using other businesses that leased or bought items from Rocks Off. Harvey alleges that Commissioner LaRose, who owns an interest in LaRose Construction, received bribes and work from Harvey’s competitor, Huffman Enterprises, to induce Commissioner LaRose to abuse his position and divert business away from Rocks Off.

¶12 Harvey brought this action seeking declaratory judgments that the tribe and its officials exceeded their jurisdiction, injunctions against all of the defendants, and damages. He brought seven claims. Two are federal claims that the tribe and the tribal officials exceeded their jurisdiction. Five of his claims are state law claims: 1) Tortious Interference with Economic Relations; 2) Extortion against Cesspooch and Wopsock; 3) Utah Antitrust Act violations; 4) Blacklisting; and 5) Civil Conspiracy. Three motions to dismiss the amended complaint were filed by the different defendants. The Ute Tribe, Huffman Enterprises, and L.C. Welding & Construction moved to dismiss the tribe for lack of subject matter jurisdiction under the theory of tribal sovereign immunity and under the tribal exhaustion doctrine. See UTAH R. CIV. P. 12(b)(1). They also moved to dismiss the other defendants, arguing that the tribe is a necessary and indispensable party that cannot be joined to the action. See id . 12(b)(7) ; id . 19. All of the other defendants joined in this motion.⁵ Various other defendants moved to dismiss for failure to state a claim upon which relief can be granted. See id . 12(b)(6). After all of the motions to dismiss had been completely briefed, and after oral arguments were held, Harvey moved to supplement his amended complaint under Utah Rule of Civil Procedure 15(d). The district court held that the motion to supplement the amended complaint was untimely, refused to consider the additional facts in the supplement, and dismissed the amended complaint against all of the defendants with prejudice.

¶13 The district court held that the tribe and the tribal officials, in their official capacities, enjoyed sovereign immunity and dismissed them under Utah Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. The remaining defendants, including the tribal officials in their individual capacities, were dismissed under rule 12(b)(7) for the inability to join the tribe, which the court held was an indispensable party. Finally, Newfield, LaRose Construction, and D. Ray C. Enterprises were dismissed on alternate grounds under rule 12(b)(6) for failure to state a claim upon which relief may be granted. Although the district court did not directly rule on the tribal exhaustion doctrine, stating that it "has already granted the Tribe’s Motion to Dismiss, making this issue moot," it essentially did so in substance. It...