Snoqualmie Indian Tribe v. City of Snoqualmie

• Decision Date: 16 May 2016
• Docket Number: CASE NO. C15-1936JLR
• Citation: 186 F.Supp.3d 1155
• Parties: Snoqualmie Indian Tribe, Plaintiff, v. City of Snoqualmie, et al., Defendants.
• Court: U.S. District Court — Western District of Washington

186 F.Supp.3d 1155

Snoqualmie Indian Tribe, Plaintiff,

v.City of Snoqualmie, et al., Defendants.

CASE NO. C15-1936JLR

United States District Court, W.D. Washington, at Seattle.

Signed May 16, 2016

Claire Newman, Rachel Saimons, Rob Roy Smith, Kilpatrick Townsend & Stockton LLP, Seattle, WA, for Plaintiff.

Bob C. Sterbank, City of Snoqualmie, Snoqualmie, WA, Michael Charles Walter, Keating Bucklin & McCormack, Seattle, WA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

JAMES L. ROBART, United States District Judge

I. INTRODUCTION

Before the court is Defendants City of Snoqualmie ("the City"), Mayor Matthew Larson, City Councilman Robert Jeans, City Councilwoman Chelley Patterson, City Councilman Bryan Holloway, City Councilwoman Heather Munden, City Councilman Charles Peterson, City Councilwoman and Mayor Pro Tem Kathi Prewitt, City Administrator Robert Larson, City Public Works Director Daniel Marcinko, and John Doe Council Member's motion to dismiss Plaintiff Snoqualmie Indian Tribe's ("the Tribe") amended complaint. (Mot. (Dkt. # 22); see also Resp. (Dkt. # 24); Reply (Dkt. # 27); Am. Compl. (Dkt. # 15).) Defendants argue that the court should dismiss the Tribe's 42 U.S.C. § 1981 claim as not plausibly pleaded and decline to exercise supplemental jurisdiction over the Tribe's remaining state law claims. (See Mot. at 1-2.) The Tribe opposes Defendants' motion. (See Resp.) The court has considered the motion, all submissions filed in support of and opposition to it, the appropriate portions of the record, and the relevant law. Being fully advised,¹ the court GRANTS in part and DENIES in part Defendants' motion as set forth below.

II. BACKGROUND

This case arises out of a dispute regarding municipal services that the City provides to the Tribe and, more specifically, to the casino that the Tribe operates ("the Casino"). The Casino is located outside City limits but within the City's urban growth area ("UGA"). (See Am. Compl. ¶¶ 2, 51.) The City provides sewer and other municipal services pursuant to the "Agreement Between the City of Snoqualmie and the Snoqualmie Tribe for the Provision of Police, Fire and Emergency Medical Services to the Snoqualmie Hills Project and Sewer Utility Service to the Tribe's Initial Reservation" ("the Agreement") that the Tribe and the City entered into on April 26, 2004. (See id. ¶¶ 32, 43.) The stated term of the Agreement is seven years after the opening of the Casino, after which the Agreement automatically renews for five additional periods of seven years unless either the Tribe or the City gives written notice of termination at least six months prior to the expiration of the initial term or any renewal term. (Id. ¶ 40; Agreement (Dkt. # 18-1) ¶ 2.19.)

The Casino opened in November 2008. (Am. Compl. ¶ 40.) It employs approximately 1,200 individuals and serves an average of 6,000 to 7,000 patrons per day. (Id. ¶¶ 26-27.) Under the Agreement, the City agreed to accept up to 360 equivalent residential units ("ERU")² of wastewater effluent per day. (See id. ¶ 37; Agreement ¶ 2.6.) The Tribe paid the City approximately $1,270,440.00 for sewer capacity at the time of connection, and approximately $3,000,000.00 for sewer services from 2008 through 2015. (Am. Compl. ¶¶ 38, 54.) "At all times relevant, the City has provided uninterrupted sewer services to the Casino...and the Tribe has paid each bill from the City for such services in full." (Id. ¶ 43.)

In June 2014, the City enacted Ordinance 1133, which raised sewer rates for all customers outside City limits to 150% of the rates for those inside City limits effective July 1, 2014. (Id. ¶ 48; see Sterbank Decl. (Dkt. # 23) ¶ 2, Ex. A ("Ord. 1133") § 2.) Prior to that, the City had not established a differential rate for in- and out-of-City sewer users; rather, the prior City ordinance—Ordinance 994—had set one rate for in-City users and provided that out-of-City users' rates were set by contract. (See Sterbank Decl. ¶ 2, Ex. B ("Ord. 994") § 1.C; Ord. 1133 §§ 1-2.)³ The Agreement ties the rate for sewer services to the legislatively enacted rate. (Agreement ¶ 2.6.6 ("The rate for waste water treatment shall be the then-current rate at any time established by the City Council for sewer service....").) The City's decision to create a different rate for customers outside City limits caused the sewer rates for the Casino and other out-of-City users to go up by 50 percent. (See id. ¶¶ 49, 51.) The Tribe alleges the Casino is one of only a few businesses located outside City limits that are using the City's sewer system. (Id. ¶ 51; see also id. ¶ 50 ("On information and belief, the City targeted its rate increase...with the intent of eliciting additional money from only the Tribe.").)

"Beginning in 2013, the City and the Tribe began discussions about amending the Agreement." (Id. ¶ 55.)⁴ By 2015, "both the Tribe and the City indicated concerns with the status quo Agreement." (Id. ¶ 56.) The Agreement was to reach the end of its first term in November 2015, and in July 2015, the City and the Tribe met to discuss amending the Agreement before that time. (Id. ) At that meeting, the Tribe expressed its desire for a one-year extension to allow the parties time to negotiate a long-term solution. (Id. ) "The City expressed a desire to amend provisions of the Agreement pertaining to allocation of impact mitigation fund dollars under the Compact with the State." (Id. ) In an August 25, 2015, letter, the City threatened to cease providing services to the Casino upon expiration of the Agreement. (Id. ¶ 57.) The Tribe and City corresponded about the Tribe's proposed extension and the City's desired changes in September and early October. (See id. ¶¶ 58-60.) On October 15, 2015, the City signed the Tribe's proposed amendment, which renewed the Agreement for one year. (Id. ¶ 61.)

Accompanying the City's October 15, 2015, acceptance was a letter from Mayor Larson informing the Tribe that the City Council had voted to discontinue sewer services to the Tribe by November 30, 2016. (See id. ¶¶ 61-63.) The letter explained that two City Council members had voted to terminate the Agreement immediately but that the Council had approved the one-year extension to allow for an orderly transition to other services. (See id. ¶ 63.)⁵ The City also informed the Tribe that it would oppose any extension of other utility services outside or across established municipal UGA boundaries, though the Tribe concedes that state law and the King County Code would not allow such an extension in any case. (See id. ¶¶ 66-67.) Further, the City has opposed the Tribe taking land into trust for the construction of sewer and water facilities. (See id. ¶¶ 68-70.)

The Tribe alleges that the City has likewise interfered with its efforts to obtain replacement fire and emergency medical services. The City will cease providing those services to the Tribe if the City terminates the Agreement. (Id. ¶ 75.) Accordingly, the Tribe has explored obtaining those services from another provider—Eastside Fire & Rescue ("EF&R"). (See id. ¶ 77.) The City, however, has told EF&R that the Agreement does not permit an alternative arrangement and has submitted a public records request to EF&R regarding EF&R's communications with the Tribe. (See id. ¶¶ 78-79.) The Tribe alleges that these actions may increase the cost of fire and emergency medical services as the Tribe must indemnify EF&R in the event the City sues EF&R regarding its agreement with the Tribe. (Id. ¶ 80.)

The Tribe contends that the City has undertaken these actions out of racial animus. In support of that contention, the Tribe alleges that "Defendants' decision to refuse services to the Plaintiff denies Plaintiff a basic utility service that the City holds out and offers to non-Indians within the City of Snoqualmie and within its UGA." (Id. ¶ 87.) The Tribe also alleges that the City "is overcharging the Tribe for sewer services," and that "the City has not terminated or threatened termination of sewer utility service of any other paying customer within City limits and the City's UGA." (Id. ¶¶ 88-89.)

The Tribe filed this lawsuit on December 9, 2015. (Compl. (Dkt. # 1) at 1.) On December 22, 2015, the Tribe filed an amended complaint, which is the presently operative complaint. (Am. Compl. at 1.) In the amended complaint, the Tribe asserts causes of action for racial discrimination in violation of 42 U.S.C. § 1981 (id. ¶¶ 81-96), unreasonable refusal to provide sewer services in violation of RCW 35.67.31 (id. ¶¶ 97-105), and tortious interference with contractual relations and business expectancies (id. ¶¶ 106-16).

Defendants move to dismiss the Tribe's Section 1981 claim on the basis that the Tribe has alleged insufficient facts to support that claim.⁶ (See Mot. at 14-22.) Although Defendants move for dismissal under Federal Rule of Civil Procedure 12(b)(6) (see id. at 1), they have already filed an answer to the Tribe's amended complaint (Ans. (Dkt. # 18)), and the Tribe has filed an answer to Defendants' counterclaims (Ans. to Counterclaims (Dkt. # 19)). Accordingly, the court treats Defendants' motion as a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). See Aldabe v. Aldabe , 616 F.2d 1089, 1093 (9th Cir.1980). Defendants' motion is now before the court.

III. DISCUSSION

A. Legal Standard

Under Federal Rule of Civil Procedure 12(c), a party may move for judgment on the pleadings after the pleadings are closed. See Fed. R. Civ. P. 12(c). A court "must accept all factual allegations in the complaint as true and construe them in the light most favorable to the non-moving party." Fleming v. Pickard , 581 F.3d 922, 925 (9th Cir.2009) (citation omitted); see also Yakima Valley Mem'l Hosp. v. Wash. State Dep't of Health , 654 F.3d 919, 925 (9th Cir.2011) (explaining that the court "assume[s] the facts alleged in the complaint are true"). "Judgment on the pleadings is properly...