Texas v. Ysleta del Sur Pueblo
| Citation | 370 F.Supp.3d 705 |
| Decision Date | 01 October 2018 |
| Docket Number | EP-17-CV-179-PRM |
| Parties | State of TEXAS, Plaintiff, v. YSLETA DEL SUR PUEBLO, the Tribal Council, and the Tribal Governor Carlos Hisa or his Successor, Defendants. |
| Court | U.S. District Court — Western District of Texas |
Michael Abrams, Anne Marie Mackin, Benjamin S. Lyles, Summer R. Lee, Office of the Attorney General of Texas, Austin, TX, for Plaintiff.
Brant C. Martin, Wick Phillips Gould & Martin, LLP, Fort Worth, TX, Joseph Daniel Austin, Richard Andrew Bonner, Kemp Smith LLP, El Paso, TX, Joseph Callister, Wick, Phillips, Gould, Martin, Dallas, TX, Michelle T. Miano, Randolph Barnhouse, Pro Hac Vice, Barnhouse Keegan Solimon & West LLP, Los Ranchos Albuquerque, NM, for Defendants.
ORDER DENYING DEFENDANTS' MOTION TO AMEND ORDERS TO CERTIFY FOR INTERLOCUTORY APPEAL UNDER 28 U.S.C. § 1292(b)
On this day, the Court considered Defendants Ysleta del Sur Pueblo, the Tribal Council, and the Tribal Governor Carlos Hisa or his Successor's [hereinafter "Defendants"] "Opposed Motion to Amend Orders to Certify for Interlocutory Appeal Under 28 U.S.C. § 1292(b)" (ECF No. 120) [hereinafter "Motion"], filed on September 5, 2018 in the above-captioned cause. The Court also considered Plaintiff State of Texas's [hereinafter "Plaintiff"] "Response in Opposition to Defendants' Motion to Amend Orders to Certify for Interlocutory Appeal Under 28 U.S.C. § 1292(b)" (ECF No. 124) [hereinafter "Response"], filed on September 12, 2018, and Defendants' "Reply in Support of Motion to Amend Orders to Certify for Interlocutory Appeal Under 28 U.S.C. § 1292(b)" (ECF No. 125) [hereinafter "Reply"], filed on September 19, 2018.1 After due consideration, the Court is of the opinion that Defendants' Motion should be denied for the reasons that follow.
This case involves a dispute between Plaintiff and Defendants regarding bingo activities on the Ysleta del Sur Pueblo [hereinafter "Pueblo" or "the Tribe"] reservation in El Paso, Texas. Plaintiff seeks a declaration that the bingo activities in question are illegal and an injunction prohibiting Defendants from continuing the activities.2 Am. Compl. 8–9, Aug. 15, 2017, ECF No. 8. The Ysleta del Sur Fraternal Organization [hereinafter "Fraternal Organization"], a tribal corporation that is chartered pursuant to § 17 of the Indian Reorganization Act [hereinafter "IRA"], operates the bingo activities. Defs.' Second Mot. To Dismiss Pl.'s First Am. Compl. 9, Apr. 18, 2018, ECF No. 83.
Defendants aver that the Court does not have jurisdiction to allow discovery against the Fraternal Organization because, according to Defendants, it possesses sovereign immunity from suit and discovery. Defs. Opposed Mot. To Reconsider and Mot. For Protective Order 1, Aug. 14, 2018, ECF No. 108. Notwithstanding Defendants' position, the Court has allowed Plaintiff to conduct depositions of and take discovery on the Tribal Governor Carlos Hisa and the Fraternal Organization. Order, Aug. 21, 2018, ECF No. 114; Order, Aug. 8, 2018, ECF No. 107. In their instant Motion, Defendants ask the Court to amend its prior Orders to allow an interlocutory appeal pursuant to 28 U.S.C. § 1292(b). Mot. 1.
Specifically, Defendants aver that the following issues should be immediately appealable: "(1) Whether the Fraternal Organization possesses tribal sovereign immunity that has not been waived; and, (2) Whether the Fraternal Organization's tribal sovereign immunity protects the Fraternal Organization and its officers and directors from participating in the discovery process in this case." Id. at 6.
A district court may make an order appealable that would otherwise not be appealable if the court is of the opinion that: (1) "such order involves a controlling question of law as to which there is substantial ground for difference of opinion" and (2) "an immediate appeal from the order may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b).
The Fifth Circuit "adhere[s] to a strict interpretation of § 1292(b)" and commands that the conditions in § 1292(b)"are to be strictly construed and applied." Ala. Labor Council, AFL-CIO, Pub. Emp. Union, Local No. 1279 v. State of Ala. , 453 F.2d 922, 924 (5th Cir. 1972). Thus, orders certifying an interlocutory appeal are reserved for "exceptional cases" and are "generally disfavored." Mae v. Hurst , 613 F. App'x 314, 318 (5th Cir. 2015) ; United States v. Garner , 749 F.2d 281, 286 (5th Cir. 1985).
The Court concludes that the issues raised in this case are not the types of exceptional issues appropriate for interlocutory appeal. As discussed below, the questions raised regarding the Fraternal Organization's immunity, though novel, are insufficient to demonstrate a substantial ground for difference of opinion. Further, an interlocutory appeal will delay—rather than advance—the termination of this litigation.
The Tribe is not immune from this lawsuit.3 Order Denying Defs.' Mot. To Dismiss and Granting in Part and Denying in Part Pl.'s Mot. To Dismiss 10–15, Aug. 27, 2018, ECF No. 115. The Court is of the opinion that, because the Tribe is not immune from suit, the Fraternal Organization is not shielded from discovery. Thus, the Court has allowed Plaintiff to take discovery of the Fraternal Organization.
By the express terms of the Fraternal Organization's charter, its immunity runs with the Tribe's. See Defs.' Second Mot. To Dismiss Pl.'s First Am. Compl. Ex. 1 (Federal Charter of Incorporation ... [for the] Fraternal Organization), art. IV(C) & XVI(A). The charter provides that the Fraternal Organization has "the same immunities under federal law as the Tribe" and "is an instrumentality of the Yselta del sur Pueblo and is entitled to all of the privileges and immunities of the Tribe ...." Id. Because the Fraternal Organization is entitled to the "same" immunities under federal law as the Tribe, then to the extent that the Restoration Act—which is federal law—waives immunity as to the Tribe, it also waives immunity as to the Fraternal Organization.
Further, the Court expresses serious doubts regarding whether a tribal corporation that is chartered pursuant to § 17 of the IRA could ever have greater immunity than that enjoyed by the tribe. The history and purpose of § 17 corporations suggest that, while a tribal corporation may choose to waive immunity when the tribe did not, the corporation cannot retain immunity when its parent tribe has waived it.
When it enacted the IRA, Congress authorized Indian tribes to, among other things, organize a governing body pursuant to § 16 of the IRA as well as a corporate entity pursuant to § 17 of the IRA. See generally Indian Reorganization Act, Pub. L. No. 73-383, 48 Stat. 984 (1934). Because Congress recognized that "the protection of sovereign immunity would put the Indian tribe at a competitive disadvantage in obtaining credit and entering into business transactions," the ability for the tribal corporate entity to waive its immunity makes it a more attractive partner for business transactions. Parker Drilling Co. v. Metlakatla Indian Cmty. , 451 F.Supp. 1127, 1131 (D. Alaska 1978). Thus, in order to remain commercially competitive, the corporation may expose itself to contract or tort claims without exposing the tribe or the assets of the governing body to suit. See also Am. Vantage Companies, Inc. v. Table Mountain Rancheria , 292 F.3d 1091, 1097 (9th Cir. 2002), as amended on denial of reh'g (July 29, 2002) ( that when Congress enacted § 17, "it did so in part to enable tribes to waive sovereign immunity, thereby facilitating business transactions and fostering tribal economic development and independence.").
While a § 17 corporation is entitled to waive its immunity without waiving the tribe's, the Court is unable to find authority suggesting that the opposite can occur. Importantly, Defendants fail to cite any authority suggesting that a § 17 corporation can retain sovereign immunity when its parent tribe has waived it.4
Additionally, Defendants aver that the Restoration Act fails to waive the Fraternal Organization's immunity because the Act "speaks to offenses ‘committed by the tribe , or by any member of the tribe ...,’ " but does not expressly name the Fraternal Organization. Reply 3. However, Defendants mischaracterize the Restoration Act's text. The text in § 107(c) that refers to the Tribe and its members is a provision that limits jurisdiction over gaming violations to federal courts: "the courts of the United States shall have exclusive jurisdiction over any offense in violation of subsection (a) that is committed by the tribe, or by any member of the tribe, on the reservation or on lands of the tribe."5 Restoration Act § 107(c).
However, the key provision, which waives sovereign immunity, is the sentence that follows: "nothing in this section shall be construed as precluding the State of Texas from bringing an action in the courts of the United States to enjoin violations of the provisions of this section."6 Id. Thus, the Restoration Act's provision that waives sovereign immunity contains no limiting principle that might exclude the Fraternal Organization.7 Accordingly, even if it were possible for a § 17 corporation to retain greater immunity than its parent tribe (and the Court believes it is not), Defendants have not shown that the Restoration Act fails to waive the Fraternal Organization's immunity.
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