Grand Canyon Skywalk Development LLC v. Vaughn et al

Filing 39

ORDER denying 35 Motion for Reconsideration. Signed by Judge David G Campbell on 7/22/2011.(NVO)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Grand Canyon Skywalk Development,
LLC, a Nevada Limited Liability Company,

No. CV11-8048-PCT-DGC
ORDER

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Plaintiff,

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vs.

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Charles Vaughn, et al.,

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Defendants.

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Plaintiff has filed a motion for reconsideration of this Court’s June 23, 2011 order

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(Doc. 33) dismissing Plaintiff’s claims without prejudice. Doc. 35. The Court ordered a

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response and reply to the motion (Doc. 36), and the parties complied (Docs. 37, 38).

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Plaintiff raises two grounds for reconsideration: (1) new facts in the form of a position

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asserted by the Tribe-owned corporation “Sa” Nyu Wa (“SNW”) in a contract case

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brought by Plaintiff in tribal court, and (2) manifest error in relying on Water Wheel

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Camp Recreational Area Inc. v. Larance, 642 F.3d 802 (9th Cir. 2011). Doc. 35. The

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Court will deny the motion for reconsideration for reasons that follow.1

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Motions for reconsideration are disfavored and should be granted only in rare

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circumstances.

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3348522, at *1 (D. Ariz. Oct. 15, 2009). A motion for reconsideration will be denied

See Stetter v. Blackpool, No. CV 09-1071-PHX-DGC, 2009 WL

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Plaintiff’s request for oral argument is denied because the issues have been
briefed thoroughly and oral argument will not aid the Court’s decision. See Fed. R. Civ.
P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998).

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“absent a showing of manifest error or a showing of new facts or legal authority that

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could not have been brought to [the Court’s] attention earlier with reasonable diligence.”

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LRCiv. 7.2(g)(1).

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Plaintiff has filed a lawsuit in Hualapai tribal court seeking to compel SNW to

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arbitrate disputes arising under the contract between Plaintiff and SNW for construction

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and operation of a skywalk on the Tribe’s property at the Grand Canyon. Doc. 35.

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Plaintiff states that SNW has filed a motion to dismiss that case on the ground that

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sovereign immunity bars the suit and SNW’s waiver of immunity in the contract applies

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only to actions brought in federal court. Id. at 3. From this position, Plaintiff infers that

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the Tribe will assert sovereign immunity in tribal court if Plaintiff seeks to challenge the

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condemnation ordinance at issue in this case, and that the Tribe “will attempt to act on

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the eminent domain issue without any impartial judicial oversight.” Id. at 4. In sum,

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Plaintiff suggests that it should not be required to exhaust its remedies in tribal court

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because doing so will be futile. See id. at 4-6. Defendants respond that sovereign

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immunity will not be an issue in a condemnation proceeding because the Tribe would

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have waived its sovereign immunity by the act of initiating condemnation in tribal court.

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Doc. 37 at 2.

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The Court is not persuaded that SNW’s sovereign immunity argument in the tribal

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court renders tribal-court exhaustion of the different claims at issue in this case futile.

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This case is not brought against SNW; it is brought against the tribal council and other

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tribal officials. This case concerns the validity of a tribal condemnation ordinance, not

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the contract’s arbitration provision at issue in the pending tribal court case. What is

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more, the fact that SNW has asserted a sovereign immunity argument does not mean that

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the tribal court will accept it. The tribal court may disagree with SNW’s position. And

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even if the tribal court accepts the sovereign immunity argument in the contract case, it

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may reject such arguments in a suit against the tribal council under principles of Ex Parte

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Young, 209 U.S. 123 (1908). Finally, if Plaintiff seeks to assert the claim at issue in this

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case in tribal court and is unable to do so, it presumably will have exhausted its tribal

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remedies and can return to this Court. Accordingly, Plaintiff fails to persuade the Court

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that new facts warrant reconsideration of the Court’s exhaustion requirement.

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Plaintiff’s second argument is that Water Wheel is distinguishable from the facts

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of this case and therefore should not have been controlling in the Court’s decision to

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dismiss. Doc. 35. Defendants respond that Water Wheel is indistinguishable because the

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contract the Tribe may seek to condemn is appurtenant to tribal land by virtue of

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involving services on tribal land. Doc. 37. It is important to remind both parties of the

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limited extent of the Court’s June 23, 2011 ruling.

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As the Court explained, “the federal policy supporting tribal self-government

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directs a federal court to stay its hand in order to give the tribal court a full opportunity to

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determine its own jurisdiction.” Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 16 (1987)

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(quotation marks and citation omitted). This is particularly true when litigation concerns

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the validity of a tribal ordinance – the “tribe must itself first interpret its own ordinance

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and define its own jurisdiction.” See Burlington N. R.R. Co. v. Crow Tribal Council, 940

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F.2d 1239, 1246 (9th Cir. 1991).

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Courts recognize only four exceptions to this exhaustion requirement: “where

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(1) an assertion of tribal jurisdiction is motivated by a desire to harass or is conducted in

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bad faith, (2) the action is patently violative of express jurisdictional prohibitions,

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(3) exhaustion would be futile because of the lack of adequate opportunity to challenge

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the court’s jurisdiction, or (4) it is plain that no federal grant provides for tribal

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governance of nonmembers’ conduct on land covered by Montana’s main rule.”

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Burlington N. R.R. Co. v. Red Wolf, 196 F.3d 1059, 1065 (9th Cir. 1999) (emphasis

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added). In its previous briefing, Plaintiff relied solely on the fourth exception, arguing

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that it was plain that the Hualapai tribal court lacks jurisdiction over Plaintiff because

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neither of the Montana exceptions would apply to this case. Doc. 26 at 3-6. Given the

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Ninth Circuit’s recent decision in Water Wheel, the Court did not agree.

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Water Wheel held that Supreme Court precedent “limits Montana to cases arising

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on non-Indian land.” 642 F.3d at 813. When a case arises on Indian land, Water Wheel

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held that tribal jurisdiction exists if the activity interferes directly with the tribe’s inherent

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powers to exclude and manage its own lands and if there are no competing state interests

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at play. Id. at 814. This Court concluded in its June 23, 2001 order that “Plaintiff’s

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attempt to invalidate a tribal ordinance designed to condemn interests on reservation

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lands would appear directly to implicate the Hualapai tribe’s power to manage its own

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lands,” and that no competing state interest exists in this case. Doc. 33 at 5 nn. 2, 3. As a

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result, the Court concluded that the lack of tribal court jurisdiction was not “plain” as

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required by the only exception to exhaustion on which Plaintiff had relied. Id. at 5-6.

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Plaintiff now argues that Water Wheel is distinguishable because it concerned a

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tribe’s action against trespassers on reservation land, while this case concerns the tribe’s

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attempted condemnation of a non-Indian’s contract right that is not located on reservation

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land. Plaintiff contends, therefore, that Montana applies to this case and exhaustion

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should not be required because neither Montana exception will permit tribal court

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jurisdiction over this case. But Water Wheel limited Montana to cases arising on non-

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Indian land, 642 F.3d at 813, and the Court cannot say this is such a case. Plaintiff’s

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claim in this Court concerns the validity of a tribal ordinance, passed by the tribal council

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on reservation land, to condemn contract rights that affect reservation land. Even if the

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Court were to accept Plaintiff’s argument that this case concerns Plaintiff’s contract right,

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the contract in question concerns the construction and operation of the skywalk on

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reservation land. The Court cannot say that this kind of case concerns the activities of a

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non-Indian on non-reservation land as required for the application of Montana after

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Water Wheel. As a result, the Court cannot conclude that there is a “plain” lack of tribal

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court jurisdiction over this claim as required to avoid exhaustion.

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Plaintiff argues that a stay is a more appropriate remedy than dismissal without

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prejudice. Doc. 35 at 9-10. The Court does not agree. As noted in the previous decision,

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the Tribe has not sought to apply the ordinance challenged by Plaintiff, and may never do

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so. In addition, Plaintiff’s current tribal court action to compel arbitration might result in

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resolution of the parties’ dispute. Because additional litigation to address the validity of

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the tribal ordinance may never be necessary in this Court, staying this litigation is

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unnecessary.

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IT IS ORDERED that Plaintiff’s motion for reconsideration (Doc. 35) is denied.

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Dated this 22nd day of July, 2011.

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