Felix et al v. Pic-N-Run, Inc., et al

Filing 201

ORDER granting 181 Motion to Dismiss; granting 182 Motion to Dismiss to the extent the motions are premised upon 28:1367(c)(3). ORDER that the Clerk of Court shall dismiss this action in its entirety without prejudice. Signed by Judge James A Teilborg on 8/10/11.(TLJ)

1

WO

2
3
4
5
6

UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

Daniel Felix and Dorothy Felix,

10
11
12
13
14
15
16

Plaintiffs,

No. CV 09-8015-PCT-JAT

vs.
Pic-N-Run, Inc., an Arizona corporation;
Milam Building Associates, Inc., a Texas
corporation; Stella Jeanette Eldridge;
Vernon W. Eldridge; Spencer Riedel;
Service Station Equipment & Sales Co. Inc.,
an Arizona corporation; Underground
Analytical Services, Inc., an Arizona
Corporation; and the Estate of Sybil
Baldwin,

ORDER

Defendants.

17
18

__________________________________

19

Vernon W. Eldridge; Stella Jeanette
Eldridge; Milam Building Associates, Inc.,

20
21
22
23

Counter-Claimants,
vs.
Daniel Felix; Dorothy Felix,
Counter- Defendants.

24
25
26
27
28
1

1
2

Vernon W. Eldridge; Stella Jeanette
Eldridge; Milam Building Associates, Inc.,
Cross-Claimants,

3
4
5
6

vs.
Estate of Sybil Baldwin; Pic-N-Run, Inc.;
Service Station Equipment & Sales Co.,
Inc.; Spencer Riedel; Underground
Analytical Services, Inc.,

7

Cross-Defendants.

8

___________________________________

9

Estate of Sybil Baldwin,

10
11
12

Counter-Claimant,
vs.
Daniel Felix and Dorothy Felix,

13

Counter-Defendants.

14

___________________________________

15

Estate of Sybil Baldwin,

16
17
18
19
20
21
22

Cross-Claimant,
vs.
Pic-N-Run, Inc., an Arizona corporation;
Milam Building Associates, Inc., a Texas
corporation; Stella Jeanette Eldridge;
Vernon W. Eldridge; Service Station
Equipment & Sales Co., Inc.; an Arizona
corporation; and Spencer Riedel,
Cross-Defendants.

23
24
25
26
27
28
2

1

Pic-N-Run, an Arizona corporation,

2
3

Counter-Claimant,
vs.

4

Daniel Felix and Dorothy Felix,

5
6

Counter-Defendants.
___________________________________

7

Pic-N-Run, an Arizona corporation,
Cross-Claimant,

8
9

vs.

13

Milam Building Associates, Inc., a Texas
corporation; Stella Jeanette Eldridge;
Vernon W. Eldridge; Service Station
Equipment & Sales Co., Inc., an Arizona
corporation; Spencer Riedel; Underground
Analytical Services, Inc., an Arizona
corporation; and Estate of Sybil Baldwin,

14

Cross-Defendants.
___________________________________

15

Service Station Equipment & Sales Co.,
Inc., an Arizona corporation,

10
11
12

16

Counter-Claimant,

17
18

vs.

19

Daniel Felix and Dorothy Felix,

20

Counter-Defendants.
___________________________________

21
22

Service Station Equipment & Sales Co.,
Inc., an Arizona corporation,

23

Cross-Claimant,

24
25
26
27
28

vs.
Pic-N-Run, Inc., an Arizona corporation;
Milam Building Associates, Inc., a Texas
corporation; Stella Jeanette Eldridge;
Vernon W. Eldridge; and Estate of Sybil
Baldwin,
Cross-Defendants
3

1

Spencer Riedel,

2
3

Counter-Claimant,
vs.

4

Daniel Felix and Dorothy Felix,

5
6

Counter-Defendants.
___________________________________

7

Spencer Riedel,
Cross-Claimant,

8
9

vs.

12

Pic-N-Run, Inc., an Arizona corporation;
Milam Building Associates, Inc. a Texas
corporation; Stella Jeanette Eldridge;
Vernon W. Eldridge; and Estate of Sybil
Baldwin,

13

Cross-Defendants.
___________________________________

14

Underground Analytical Services, Inc., an
Arizona corporation,

10
11

15

Counter-Claimant,

16
17

vs.

18

Daniel Felix and Dorothy Felix,

19

Counter-Defendants.
___________________________________

20
21

Underground Analytical Services, Inc., an
Arizona corporation,

22

Cross-Claimant,

23
24
25
26
27

vs.
Pic-N-Run, Inc., an Arizona corporation;
Milam Building Associates, Inc., a Texas
corporation; Stella Jeanette Eldridge;
Vernon W. Eldridge; and Estate of Sybil
Baldwin,
Cross-Defendants.

28
4

1

Pending before the Court is a Motion to Dismiss filed by Defendants Stella Jeanette

2

Eldridge, Vernon W. Eldridge and Milam Building Associates, Inc. (the “Milam

3

Defendants”) (Dkt. 181), and a Motion to Dismiss filed by Defendant Estate of Sybil

4

Baldwin (“Baldwin”) (Dkt. 182). A hearing was held on August 3, 2011, and the Court is

5

now prepared to rule on the motions.

6

I.

BACKGROUND

7

The various claims, counter-claims, and cross-claims in this action revolve around the

8

alleged contamination caused by the leakage and a spill of gasoline at a convenience store

9

and gas station on the Navajo tribal trust land in Chinle, Arizona.1

10

The Navajo Nation leased a parcel of property to Baldwin for the operation of a

11

convenience store and gas station. Initially, underground storage tanks were used to store

12

gasoline on the property. In 1997, Baldwin subleased the premises to Defendant Pic-N-Run,

13

Inc. (“Pic-N-Run”), for the continued operation of the convenience store and gas station. In

14

June 2004, Pic-N-Run removed three underground storage tanks from the property. During

15

the removal, Defendants Underground Analytical Services, Inc. and Spencer Riedel were

16

hired to analyze the soil around the underground storage tanks and oversee the environmental

17

compliance of the tank removal.

18

In July 2004, Pic-N-Run entered into an agreement with the Milam Defendants for the

19

remodeling of the convenience store and gas station, and the construction of above-ground

20

storage tanks. In December 2004, the Milam Defendants entered into an agreement with

21

Plaintiffs Daniel Felix and Dorothy Felix, doing business as Shiprock Construction Company

22

(“Shiprock”).

23

remodeling project at the property. In 2005, an employee of Shiprock drove a stake into a

24

gasoline supply line on the property, which caused a release of gasoline. On July 31, 2007,

25

Pic-N-Run filed a complaint in the District Court of the Navajo Nation against Shiprock and

Shiprock, acting as a subcontractor, agreed to pour concrete for the

26
27
28

1

Unless otherwise specified, any further reference to “claims” in this Order includes claims
asserted by Plaintiffs Daniel Felix and Dorothy Felix, as well as counter-claims and cross
claims asserted by the other parties to this action.
5

1

the Milam Defendants regarding the gasoline leak.

2

In January 2009, Shiprock filed the present action seeking assignment and

3

apportionment of responsibility for the cleanup and costs associated with the gasoline

4

contamination at the property. The Defendants then filed a series of counter-claims and

5

cross-claims against Shiprock and the other parties.

6

In August 2009, the Environmental Protection Agency (“EPA”) issued an

7

Administrative Order pursuant to Section 7003 of the Resource Conservation and Recovery

8

Act (“RCRA”), codified at 42 U.S.C. § 6973. This “§ 7003 Order” stated that the Milam

9

Defendants, Pic-N-Run, Baldwin and Shiprock caused or contributed to the contamination

10

at issue, and ordered the parties to undertake and finance the work necessary to clean-up the

11

contamination site. (Dkt. 125-1.) In accordance with the EPA’s § 7003 Order, remedial

12

action is proceeding at the Chinle site. The EPA has not filed an action in district court to

13

enforce its § 7003 Order.

14

On May 4, 2010, the Court dismissed all claims arising under RCRA, 42 U.S.C. §§

15

6901 et seq., because the Court did not have subject matter jurisdiction to entertain federal

16

claims seeking pre-enforcement review of the EPA’s § 7003 Order. (Dkt. 150.) Only the

17

parties’ common law claims remain in this action.

18

Discovery in this action closed on December 3, 2010. With the exception of filing

19

disclosure statements and complying with the expert disclosure deadline, no formal discovery

20

has been conducted or propounded. The parties have unsuccessfully sought to resolve this

21

matter through mediation.

22

II.

LEGAL STANDARDS

23

Both the Milam Defendants and Baldwin have moved to dismiss the claims asserted

24

against them pursuant to Rule 12(b)(1) and (b)(6) of the Federal Rules of Civil Procedure.

25

A.

Federal Rule of Civil Procedure 12(b)(1)

26

“Federal Rule of Civil Procedure 12(b)(1) allows litigants to seek the dismissal of an

27

action from federal court for lack of subject matter jurisdiction. . . . When subject matter

28

jurisdiction is challenged under Federal Rule of [Civil] Procedure 12(b)(1), the plaintiff has
6

1

the burden of proving jurisdiction in order to survive the motion.” Tosco Corp. v.

2

Communities for a Better Env’t, 236 F.3d 495, 499 (9th Cir. 2001). The defense of lack of

3

subject matter jurisdiction may be raised at any time by the parties or the court. See

4

Fed.R.Civ.P. 12(h)(3).

5

Normally, on a Rule 12(b)(1) motion, the court is, “free to hear evidence regarding

6

jurisdiction and to rule on that issue prior to trial, resolving factual disputes where necessary.

7

In such circumstances, no presumptive truthfulness attaches to plaintiff’s allegations, and the

8

existence of disputed material facts will not preclude the trial court from evaluating for itself

9

the merits of jurisdictional claims.” Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir.

10

1987) (internal quotations and citations omitted). However, when considering a motion

11

under Rule 12(b)(1), if the jurisdictional issue is dependant on the resolution of factual issues

12

relating to the merits of the case, the Court applies the Rule 12(b)(6) standard of assuming

13

that all of the allegations in the complaint are true. Id.

14

B.

Federal Rule of Civil Procedure 12(b)(6)

15

To survive a Rule 12(b)(6) motion for failure to state a claim, a complaint must meet

16

the requirements of Federal Rule of Civil Procedure 8(a)(2). Rule 8(a)(2) requires a “short

17

and plain statement of the claim showing that the pleader is entitled to relief,” so that the

18

defendant has “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell

19

Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47

20

(1957)).

21

The pleading standard in Rule 8 “demands more than an unadorned, the-defendant-

22

unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 1937, 1949

23

(2009) (citing Twombly, 550 U.S. at 555). A complaint that offers nothing more than naked

24

assertions will not suffice. Id. To survive a motion to dismiss, a complaint must contain

25

sufficient factual matter, which, if accepted as true, states “a claim to relief that is plausible

26

on its face.” Id.

27

Although a complaint attacked for failure to state a claim does not need detailed

28

factual allegations, the pleader’s obligation to provide the grounds for relief requires “more
7

1

than labels and conclusions, and a formulaic recitation of the elements of a cause of action

2

will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). The factual allegations

3

of the complaint must be sufficient to raise a right to relief above a speculative level. Id. In

4

deciding a motion to dismiss under Rule 12(b)(6), the Court must construe the facts alleged

5

in the complaint in the light most favorable to the drafter of the complaint and the Court must

6

accept all well-pleaded factual allegations as true. See Shwarz v. United States, 234 F.3d

7

428, 435 (9th Cir. 2000). Nonetheless, the Court does not have to accept as true a legal

8

conclusion couched as a factual allegation. Papasan v. Allain, 478 U.S. 265, 286 (1986).

9

Claims raised under Rule 12(b)(1) should be addressed before reasons for dismissal

10

under Rule 12(b)(6). See 5 C. Wright & A. Miller, Federal Practice and Procedure § 1350,

11

at 138–39 (3d ed. 2004) (“[W]hen the motion is based on more than one ground, the cases

12

are legion stating the district court should consider the Rule 12(b)(1) challenge first because

13

if it must dismiss the complaint for lack of subject matter jurisdiction, the accompanying

14

defenses and objections become moot and do not need to be determined by the judge.”).

15

III.

ANALYSIS

16

A.

17

The Milam Defendants have moved to dismiss all claims and cross-claims against

18

them without prejudice. The Milam Defendants argue that the Court should refrain from

19

exercising its supplemental jurisdiction over the remaining common law claims, and,

20

alternatively, that the remaining claims are not ripe for adjudication, because there is a lack

21

of damages with regard to the issues in this action.

22

Milam Defendants’ Motion to Dismiss

1.

Supplemental Jurisdiction

23

The Court has subject matter jurisdiction over cases involving federal questions

24

pursuant to 28 U.S.C. § 1331, which provides: “The district courts shall have original

25

jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United

26

States.” Subject matter jurisdiction existed in this action as a result of the parties’ RCRA

27

claims, which presented federal questions. The Court has supplemental jurisdiction over the

28

common law claims, because “in any civil action of which the district courts have original
8

1

jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that

2

are so related to claims in the action within such original jurisdiction that they form part of

3

the same case or controversy.” 28 U.S.C. § 1367(a). However, the Court dismissed the

4

federal RCRA claims. (Dkt. 150.) The remaining claims in this action are common law

5

causes of action, including negligence, negligence per se, breach of contract and indemnity.

6

The Milam Defendants argue that, because the remaining pendent common law claims

7

leave no federal issues before the Court, the Court should refrain from exercising

8

supplemental jurisdiction, and dismiss this action without prejudice. Shiprock responds that

9

the common law claims “arise under” federal law, and, therefore, the Court has federal

10

question jurisdiction over this matter. Shiprock also argues, in the alternative, that the Court

11

should continue exercising supplemental jurisdiction. Likewise, Pic-N-Run requests the

12

Court, in the exercise of its discretion, retain supplemental jurisdiction over the remaining

13

common law claims. Baldwin does not oppose dismissal.

14

“Under 28 U.S.C. § 1367(c)(3), a district court has discretion to elect not to exercise

15

supplemental jurisdiction over state claims if it has dismissed the federal claims over which

16

it had original jurisdiction.” Brown v. Lucky Stores, Inc., 246 F.3d 1182, 1189 (9th Cir.

17

2001) (citing Voigt v. Savell, 70 F.3d 1552, 1565 (9th Cir. 1995)).2 The Supreme Court

18

stated in dictum that “if the federal claims are dismissed before trial, even though not

19

insubstantial in a jurisdictional sense, the state claims should be dismissed as well.” United

20

Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1966). The Ninth Circuit found that this

21
2

22
23
24
25
26
27
28

The federal statute on supplemental jurisdiction provides:
The district courts may decline to exercise supplemental jurisdiction over a
claim under subsection (a) if—
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which
the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original
jurisdiction, or
(4) in exceptional circumstances, there are other compelling reasons for
declining jurisdiction.
28 U.S.C. § 1367(c).
9

1

statement “simply recognizes that in the usual case in which federal-law claims are

2

eliminated before trial, the balance of factors will point toward declining to exercise

3

jurisdiction over the remaining state law claims.” Schneider v. TRW, Inc., 938 F.2d 986, 993

4

(9th Cir. 1991) (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988)).

5

Dismissal is in the discretion of the Court, because district courts are in the best position to

6

judge the extent of resources invested in a case. Id. at 993–94.

7

The parties agree that the federal claims have been dismissed, and only common law

8

claims remain. However, Shiprock argues that the remaining common law claims “arise

9

under” federal law. The Supreme Court has noted that the “constant refrain” in determining

10

whether federal question jurisdiction lies over state law claims is that “federal jurisdiction

11

demands not only a contested federal issue, but a substantial one, indicating a serious federal

12

interest in claiming the advantages thought to be inherent in a federal forum.” Grable &

13

Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 313 (2005). The Court has

14

reviewed of the common law claims asserted in this action. (Dkt. 73, 81, 84, 85, 86, 87.)

15

Although arising from a common nucleus of operative fact (i.e., the gasoline leak on the

16

property), the common law claims arise under state law, not federal law. However, the

17

common law claims do not rise to the level required for the exercise of federal jurisdiction

18

independent of the dismissed federal RCRA claims. Therefore, the Court has supplemental,

19

not original, jurisdiction over the common law claims asserted by the parties.

20

The issue before the Court now is whether it should continue exercising its

21

supplemental jurisdiction after the federal RCRA claims have been dismissed. The parties

22

frame the extent of resources invested in this case in different manners. The Milam

23

Defendants and Baldwin point out that no depositions, interrogatories, or requests for

24

admission or production have been conducted or propounded in this litigation, even though

25

the discovery deadline elapsed. Although not disputing the lack of formal discovery, Pic-N-

26

Run and Shiprock argue that “substantial disclosure of evidence” has occurred, and the

27

parties have expended resources to prepare for mediation.

28

This action remains in the early stages of litigation, even though it has been pending
10

1

before the Court for two years. The parties have not filed motions for summary judgment,

2

and as noted above, the parties have not expended time or resources propounding formal

3

discovery. Further, there will be little duplication of effort in a subsequent proceeding. The

4

efforts expended in connection with the factual investigation and the mediation are not the

5

exclusive province of this action, and will be useful in any subsequent action.

6

At this time, the Court finds it would be ill-advised to continue exercising

7

supplemental jurisdiction over the common law claims, since the federal RCRA claims were

8

dismissed. Continued exercise of supplemental jurisdiction over the common law claims

9

could result in inconsistent outcomes depending on the EPA’s potential enforcement of the

10

§ 7003 Order, and the parties’ ability to raise their federal RCRA claims in a subsequent

11

action following any such enforcement.

12

Arguing against its own cause, Shiprock maintains that the common law claims “arise

13

under” federal law, because “the claims that Shiprock and the other parties in this action are

14

urging amount to common law apportionment of fault claims for clean-up, which is

15

specifically permitted where RCRA liability has been established.” (Dkt. 194 at p. 3.)

16

Shiprock also contends that “the damages in this case relate to the cost of remediating a site.”

17

(Dkt. 193 at p. 3.) Assuming arguendo that some or all of the common law claims arise

18

under federal law, and, therefore, give rise to federal question jurisdiction, the claims should

19

be dismissed for the same reason the Court previously dismissed the parties’ federal claims

20

arising under RCRA. As the Court stated in its prior order:

21
22
23
24
25
26
27
28

Various Courts have held that Article III courts lack jurisdiction to entertain
a challenge to an EPA administrative order until the EPA seeks to judicially
enforce the order. See, e.g., Ross Incineration Servs., Inc. v. Browner, 118 F.
Supp. 2d 837, 843 (N.D. Ohio 2000) (“The Court agrees with the EPA that
RCRA does preclude judicial review of § 7003 Orders, unless and until the
EPA seeks actual enforcement of its Order. Accordingly, the EPA’s motion
to dismiss for lack of jurisdiction must be granted on this ground.”); United
States v. Mobil Oil Corp., 1997 WL 1048911 (E.D.N.Y. 1997) (holding that
court lacked jurisdiction to review a counter-claim seeking pre-enforcement
review of a § 3013 EPA order).
....
In its order, the EPA named precisely each party it found to be liable for the
contamination at issue. Yet Plaintiffs, Pic-N-Run, and the Milan Defendants
seek a declaration from this Court naming each party liable for the
contamination at issue. Such a request constitutes a challenge to the EPA
11

1
2
3
4
5
6
7
8
9
10

order in the form of challenging who the EPA found to be responsible for the
contamination. For example, the Milan Defendants are seeking a declaration
that they are not responsible for the contamination; rather, Plaintiffs and the
cross-claim Defendants are fully responsible. If the Court were to grant such
a request, the Court would be directly contravening the EPA’s order, as the
EPA found the Milan Defendants caused or contributed to the contamination.
The same impediment holds true for all of the RCRA claims, counter-claims,
and cross-claims. The parties in this lawsuit seeking relief under RCRA
cannot challenge the EPA’s findings and conclusions concerning those
responsible for the contamination until the EPA seeks to enforce its order.
Hence, because the EPA has already issue a § 7003 Order delineating those
responsible for the contamination and clean-up, and because the EPA has not
yet sought to enforce its order, this Court is precluded from issuing a similar
RCRA declaration.
....
Therefore, because the Court finds that the requested RCRA relief
constitutes a challenge to the EPA’s § 7003 Order, the Court is without subject
matter jurisdiction to entertain the RCRA claims. Accordingly, all RCRA
claims, counter-claims, and cross-claims are dismissed under Rules 12(b)(1),
(h)(3).

11

(Dkt. 150 at pp. 8–10.) If, as Shiprock contends, the common law claims arise under federal
12

law for the apportionment of fault for clean-up and the assessment of damages attributable
13

to remediation costs, then the Court finds that these claims would constitute a challenge to
14

the EPA’s § 7003 Order, which the EPA has not sought to enforce. Accordingly, consistent
15

with its prior order, the Court is precluded from issuing a declaration apportioning fault and
16

assessing damages on the common law claims, which are alleged in connection with the same
17

contamination that is the subject of the EPA’s § 7003 Order.
18

Based on the foregoing, the Court will refrain from exercising supplemental
19

jurisdiction over the remaining claims. Additionally, if the common law claims did, in fact,
20

give rise to federal question jurisdiction, then the Court lacks jurisdiction to entertain a pre21

enforcement challenge to an EPA administrative order. Based on the foregoing, dismissal
22

of the common law claims is appropriate.
23

2.

Ripeness of Claims

24

The Milam Defendants also move for dismissal on the ground that the lack of damages
25

means this action is not ripe for adjudication. According to the Supreme Court:
26
27
28

Ripeness is a justiciability doctrine designed “to prevent the courts, through
avoidance of premature adjudication, from entangling themselves in abstract
disagreements over administrative policies, and also to protect the agencies
from judicial interference until an administrative decision has been formalized
12

1

and its effects felt in a concrete way by the challenging parties.”

2

Nat’l Park Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803, 807–08 (2003) (quoting

3

Abbott Labs. v. Gardner, 387 U.S. 136, 148–49 (1967)). The Milam Defendants appear to

4

make two separate arguments relating to the ripeness of this action: (1) the parties have not

5

suffered damages; and (2) apportionment of liability is not ripe because the EPA has not

6

sought to enforce its § 7003 Order. These arguments are intertwined in the parties’ briefs,

7

and not easily distinguishable. With respect to the first argument, Pic-N-Run has allegedly

8

incurred damages, although not in sum certain, as a result of remediating the contamination

9

on the property. Accordingly, this action is ripe with respect to alleged damages. With

10

respect to the Milam Defendants’ second argument, to the extent that the common law claims

11

arise under RCRA, the Court lacks jurisdiction to determine pre-enforcement claims under

12

RCRA. As discussed above, if the common law claims do “arise under” federal law, then

13

the claims implicate the EPA’s § 7003 Order. If the Court were to determine that one party

14

injured another party in connection with the gasoline leakage, then the Court would be

15

apportioning liability with respect to the same incident in which the EPA has already

16

determined the parties are jointly and severally liable (Dkt. 125-1, ¶ 81). Until the EPA

17

decides to judicially enforce the § 7003 Order, the Court must refrain from exercising

18

jurisdiction over claims seeking pre-enforcement adjudication.

19

Based on the foregoing, the Court declines to exercise supplemental jurisdiction over

20

the pendent common law claims. 28 U.S.C. § 1367(c)(3). The common law claims will be

21

dismissed without prejudice, and the Court expresses no opinion as to the merits of any such

22

claims.

23

B.

Baldwin’s Motion to Dismiss

24

Baldwin moves to dismiss on the grounds that supplemental jurisdiction does not

25

exist, because the common law claims arise under tribal law, and not state law. In the

26

alternative, Baldwin argues that the Court should dismiss the claims asserted against Baldwin

27

for failure to exhaust tribal remedies. Because the Court has determined that it will not

28

exercise supplemental jurisdiction over the remaining common law claims, the Court does
13

1

not need to decide whether the common law claims arise under tribal law and must be

2

addressed by a tribal court. However, the Court will address Baldwin’s argument briefly.

3

Baldwin argues that the State of Arizona does not have civil jurisdiction over the Navajo

4

Nation, and, thus, the State of Arizona has no jurisdiction over an incident that occurred on

5

tribal trust land. The analysis is not nearly as straightforward as Baldwin contends.

6

“Where nonmembers are concerned, the ‘exercise of tribal power beyond what is

7

necessary to protect tribal self-government or to control internal relations is inconsistent with

8

the dependent status of the tribes, and so cannot survive without express congressional

9

delegation.’” Nevada v. Hicks, 533 U.S. 353, 359 (2001) (quoting Montana v. United States,

10

450 U.S. 544, 564 (1981)). The general proposition articulated by the Supreme Court is that

11

“the inherent sovereign powers of an Indian tribe do not extend to the activities of

12

nonmembers of the tribe.” Montana, 450 U.S. at 565.

13

The parties to this action, with the exception of Sybil Baldwin, are non-tribal members

14

over whom the tribal court presumptively lacks jurisdiction. There are two exceptions to this

15

presumptive lack of jurisdiction:

19

A tribe may regulate, through taxation, licensing, or other means, the activities
of nonmembers who enter consensual relationships with the tribe or its
members, through commercial dealing, contracts, leases, or other
arrangements. A tribe may also retain inherent power to exercise civil
authority over the conduct of non-Indians on fee lands within its reservation
when that conduct threatens or has some direct effect on the political integrity,
the economic security, or the health or welfare of the tribe.

20

Id. (internal citations omitted). Whether the claims arise under state law or tribal law

21

pursuant to one of the exceptions requires additional analysis.

16
17
18

22

With respect to the first exception, the only contract entered into between a member

23

of the tribe, Baldwin, and a nonmember is the sublease between Pic-N-Run and Baldwin.

24

However, there is no evidence that the Navajo Nation is attempting to regulate the activities

25

of the parties in this action who are non-tribal members. At a minimum, a closer analysis of

26

the first exception with respect to the effect of the sublease on the common law claims would

27

be required. Also, additional analysis may be required to determine whether any of the other

28

parties have entered into “consensual relationships” through “other arrangements” as
14

1

described in the first exception.

2

Further, although not dispositive, the occurrence of the gasoline spillage on tribal land

3

is relevant to the second exception. Nevada, 533 U.S. at 360 (“The ownership status of land,

4

in other words, is only one factor to consider in determining whether regulation of the

5

activities of nonmembers is ‘necessary to protect tribal self-government or to control internal

6

relations.’ It may sometimes be a dispositive factor.”). However, Baldwin appears to

7

concede that the second Montana exception does not apply. (Dkt. 182 at p. 8.)

8

Additional briefing would be required to address whether the tribal court should be

9

given a full opportunity to determine its own jurisdiction with respect to the claims. See

10

Boozer v. Wilder, 381 F.3d 931, 935 (9th Cir. 2004). Regardless, the Court is not required

11

at this time to determine whether the claims over which it is declining to exercise

12

supplemental jurisdiction arise under state law or tribal law. In light of the denial of

13

supplemental jurisdiction, the Court makes no determination with respect to the merits of

14

Baldwin’s arguments.

15

IV.

CONCLUSION

16

Because the Court has dismissed all the federal claims over which it had original

17

jurisdiction, and the case is at such an early stage of the proceedings, the Court declines to

18

exercise supplemental jurisdiction over the remaining common law claims. 28 U.S.C. §

19

1367(c)(3); Gibbs, 383 U.S. at 726.

20

Accordingly,

21

IT IS HEREBY ORDERED that the Milam Defendants’ Motion to Dismiss (Dkt.

22

181) and Baldwin’s Motion to Dismiss (Dkt. 182) are GRANTED to the extent the motions

23

are premised upon 28 U.S.C. § 1367(c)(3).

24

//

25

//

26

//

27

//

28

//
15

1
2
3

IT IS FURTHER ORDERED that the Clerk of the Court shall dismiss this action
in its entirety without prejudice.
DATED this 10th day of August, 2011.

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
16