U.S. ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 89-15930

• Decision Date: 07 July 1992
• Docket Number: No. 89-15930,89-15930
• Citation: 971 F.2d 244
• Parties: UNITED STATES ex rel. ROBINSON RANCHERIA CITIZENS COUNCIL, Plaintiff-Appellant, v. BORNEO, INC.; Clear Lake Indian Bingo Ltd.; American Arbitration Association; Herman Schner, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 244

971 F.2d 244

UNITED STATES ex rel. ROBINSON RANCHERIA CITIZENS COUNCIL Plaintiff-Appellant, v. BORNEO, INC.; Clear Lake Indian Bingo Ltd.; American Arbitration Association; Herman Schner Defendants-Appellees.

No. 89-15930.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Nov. 6, 1991.

Decided July 7, 1992.

George Forman, Alexander & Karshmer, Berkeley, Cal., for plaintiff-appellant.

Lawrence W. Chamblee, Iwasaki, Thomas & Sheffield, Los Angeles, Cal., and Louis Demas, Sacramento, Cal., for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before: POOLE, REINHARDT and FERNANDEZ, Circuit Judges.

FERNANDEZ, Circuit Judge:

Robinson Rancheria Citizens Council (Robinson) appeals from the district court's dismissal of its claims for injunctive and declaratory relief under 25 U.S.C. § 81, which governs contracts between Indians and non-Indians relating to tribal lands. The district court dismissed Robinson's complaint with prejudice, and when Robinson moved for reconsideration of the court's order, the court imposed sanctions under Rule 11. Since a state court has now decided the claims Robinson placed before the district court, we affirm the district court's dismissal of the action. We reverse the district court's order imposing sanctions.

BACKGROUND

On August 30, 1986, Robinson, a federally recognized Indian tribe, and Borneo, Inc. entered into a written contract which obligated Borneo to finance, construct, and operate a bingo hall on Robinson's tribal land. Legal title to tribal land is held in trust for Robinson by the United States. The agreement provided that Borneo was to receive eighty percent of net operating profits until its construction costs had been paid in full; after costs were recouped, Borneo's draw was to fall to forty percent. Revenues not paid to Borneo were to be retained by Robinson. The contract also provided that Borneo's rights and responsibilities would be assigned to Borneo, Inc. as general partner for Clear Lake Indian Bingo (CLIB), a limited partnership to be formed for the purpose of financing the Since the Robinson-Borneo contract was an agreement between an Indian tribe and non-Indians "in consideration of services for said Indians relative to their lands," it had to meet the formal requirements of 25 U.S.C. § 81 to be valid. Section 81 requires that agreements (1) be in writing, with a duplicate delivered to each party, (2) bear the approval of the Secretary of the Interior, or his representative, (3) contain the names, residential addresses and occupations of all "parties in interest," i.e. the principals of the development companies, (4) state the time and place of execution, and (5) be of a specific, limited duration. Section 81 further states that "[a]ll contracts or agreements made in violation of this section shall be null and void...."

                construction of the bingo hall.   At the time the contract was executed, CLIB had not been organized.   One term of the contract stipulated that disputes arising under the contract were to be settled by the American Arbitration Association (AAA).   The agreement was signed by Michael W. McCoy on behalf of Borneo and by Bernadine Tripp, tribal chairperson, for Robinson.   A duly executed resolution of the Robinson Rancheria Citizens Business Council authorized Tripp to sign the contract on Robinson's behalf.   That resolution recited the fact that Robinson had already approved the contract.   The Business Council, in turn, was empowered by the federally approved "Constitution of the Robinson Rancheria" to enter into binding agreements affecting tribal lands on behalf of Robinson
                

The Robinson-Borneo contract was approved by the Bureau of Indian Affairs on September 3, 1986, as required by 25 U.S.C. § 81. However, the contract failed to meet the mandates of section 81 in a number of other respects. The names, address and occupations of the principals of Borneo and CLIB were not listed. Nor was the time and place of execution stated in the agreement. At oral argument before the district court, Robinson conceded that the other requirements of section 81 had been met.

Borneo and CLIB completed construction of the bingo hall in January, 1987. Borneo operated the hall from January 21, 1987 to April 13, 1987. CLIB operated it from May 1, 1987 until December 16, 1987, at which time it closed the bingo hall for lack of operating capital. Robinson re-opened the hall April 16, 1988. Robinson claims that Borneo and CLIB breached the agreement by failing to pay state and federal employment taxes, county property tax, and certain construction debts. It also claims that CLIB unilaterally ceased bingo operations for a few months, causing Robinson to seek and secure new management. CLIB claims Robinson wrongfully seized control of and denied CLIB access to the bingo hall.

Pursuant to the terms of the agreement, CLIB submitted the dispute to an arbitrator for the AAA. However, the AAA arbitrated the dispute without substantial participation by Robinson. In a letter to the arbitration judge, Robinson appeared specially to argue that the AAA lacked authority to resolve the dispute because Robinson was immune from unconsented suits and Robinson's governing body lacked authority to waive sovereign immunity on Robinson's behalf. The arbitration judge scheduled the jurisdiction hearing for the day after the commencement of the hearing on the merits of CLIB's claims. He instructed Robinson's attorney to come prepared to raise the jurisdictional question and to argue Robinson's case on the merits. Robinson failed to attend this hearing or the hearing on the merits.

After the hearing, the arbitration judge found in favor of CLIB. CLIB then filed an action in state court to confirm the arbitration judge's findings and award. On April 10, 1989, Robinson appeared specially and contested the jurisdiction of the state court, but the state court decided CLIB's claim was properly before it.

While the action was pending in state court, Robinson pursued two other lines of attack against the AAA award. It first filed this action in the District Court for the Northern District of California. On May 1, 1989, the Northern District issued its order denying Robinson's application for a temporary restraining order and dismissed In the meantime, Robinson had removed the state confirmation action to the District Court for the Central District of California. On July 24, 1989, the Central District remanded that case to the state court. The state court then confirmed the arbitration judge's award and findings on December 27, 1990, and issued a judgment enforcing the award. That judgment was not appealed and is now final.

                this case with prejudice.   Robinson then moved the court to reconsider the dismissal.   On June 19, 1989, the court denied the motion and awarded Borneo monetary sanctions against Robinson for bringing a frivolous motion.   Robinson filed this appeal on July 13, 1989
                

JURISDICTION AND STANDARD OF REVIEW

The district court had jurisdiction under 25 U.S.C. § 81 and 28 U.S.C. § 1331. We have jurisdiction to review final orders and judgments under 28 U.S.C. § 1291.

We review de novo the district court's order dismissing Robinson's complaint. See A.K. Management Co. v. San Manuel Band of Mission Indians, 789 F.2d 785, 787 (9th Cir.1986). However, our review is not limited to a consideration of the grounds upon which the district court decided the issues; we can affirm the district court on any grounds supported by the record. Jewel Cos., Inc. v. Pay Less Drug Stores Northwest, Inc., 741 F.2d 1555, 1564-65 (9th Cir.1984).

We review the district court's order imposing sanctions under Rule 11 for an abuse of discretion. United States v. Stringfellow, 911 F.2d 225, 226 (9th Cir.1990).

DISCUSSION

Our review of this case begins and ends with the fact that Robinson's claims have been raised before and decided by a California state court. Thus, we need not and do not resolve the weighty issues regarding the validity of the Robinson-Borneo contract, ¹ although we will of necessity refer to them in our discussion.

I. JUDICIAL NOTICE OF THE STATE COURT JUDGMENT

Generally, we will not consider facts outside the record developed before the district court. Daly-Murphy v. Winston, 837 F.2d 348, 351 (9th Cir.1987). However, we "may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue." St. Louis Baptist Temple, Inc. v. FDIC, 605 F.2d 1169, 1172 (10th Cir.1979); see also Colonial Penn Ins. Co. v. Coil, 887 F.2d 1236, 1239 (4th Cir.1989); E.I. DuPont de Nemours & Co., Inc. v. Cullen, 791 F.2d 5, 7 (1st Cir.1986); Coney v. Smith, 738 F.2d 1199, 1200 (11th Cir.1984); Green v. Warden, 699 F.2d 364, 369 (7th Cir.), cert. denied, 461 U.S. 960, 103 S.Ct. 2436, 77 L.Ed.2d 1321 (1983); Bryant v. Carleson, 444 F.2d 353, 357 (9th Cir.) (court took judicial notice of proceedings and filings in other courts, including a decision of the California Supreme Court issued while the parties' appeal in the federal case was pending), cert. denied, 404 U.S. 967, 92 S.Ct. 344, 30 L.Ed.2d 287 (1971).

The proceedings before the California Superior Court are "directly related" to this appeal and may in fact be dispositive. Accordingly, we take notice of that court's final judgment, Clear Lake Indian Bingo Ltd. v. Robinson Rancheria Citizens Council, No. C 718613, (California Superior Court, December 28, 1990), and related filings.

II. THE EFFECT OF THE STATE COURT JUDGMENT

The state court judgment confirmed the AAA award in all respects. Thus, the findings and conclusions of the arbitrator have the same force and effect as a decision reached by the court itself at the close of a fully litigated civil action. See Cal.Civ.Proc.Code § 1287.4.

The arbitrator found that the AAA had jurisdiction over...