Resources for Indian Student Education, Inc. v. Cedarville Rancheria of Northern Pauite Indians, et al

Filing 33

ORDER signed by Judge John A. Mendez on 2/12/2015 ORDERING 14 the Court GRANTS without prejudice Defendant Tribe' motion to dismiss, GRANTS 17 without prejudice Tribal Court Defendants' motion to dismiss, DENIES 15 Defendant Tribe's motion for sanctions, and DENIES Plaintiff's motion for a preliminary injunction; Plaintiff may file a First Amended Complaint once it has exhausted its tribal court remedies. (Reader, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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RESOURCES FOR INDIAN STUDENT
EDUCATION, INC (R.I.S.E.),

No. 2:14-cv-02543 JAM CMK

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Plaintiff,
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v.
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CEDARVILLE RANCHERIA OF
NORTHERN PAIUTE INDIANS;
CEDARVILLE RANCHERIA TRIBAL
COURT; PATRICIA R. LENZI, in
her capacity as Chief Judge
of the Cedarville Rancheria
Tribal Court,

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Defendants.
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ORDER GRANTING DEFENDANT
CEDARVILLE RANCHERIA OF NORTHERN
PAIUTE INDIANS’ MOTION TO
DISMISS, GRANTING DEFENDANT
CEDARVILLE RANCHERIA TRIBAL
COURT AND DEFENDANT PATRICIA
LENZI’S MOTION TO DISMISS,
DENYING DEFENDANT CEDARVILLE
RANCHERIA OF NORTHERN PAIUTE
INDIANS’ MOTION FOR SANCTIONS,
AND DENYING PLAINTIFF RESOURCES
FOR INDIAN STUDENT EDUCATION’S
MOTION FOR A PRELIMINARY
INJUNCTION

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This matter is before the Court on Defendant Cedarville

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Rancheria of Northern Paiute Indians’ (“Defendant Tribe”) Motion

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to Dismiss (Doc. #14) Plaintiff Resources for Indian Student

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Education, Inc.’s (“Plaintiff” or “RISE”) Complaint (Doc. #1).

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Defendants Cedarville Rancheria Tribal Court and Judge Patricia

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Lenzi (“Tribal Court Defendants”) bring a motion to dismiss (Doc.

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#17) on similar grounds.

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Tribe’s motion for Rule 11 sanctions (Doc. #15) and Plaintiff’s

Also before the Court is Defendant

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motion for a preliminary injunction (Doc. #4).

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reasons, both Defendant Tribe and Tribal Court Defendants’

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motions to dismiss are granted without prejudice, Defendant

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Tribe’s motion for sanctions is denied, and Plaintiff’s motion

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for a preliminary injunction is denied for lack of jurisdiction. 1

For the following

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I.

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FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

At some point prior to December 2013, Duanna Knighton
resigned from her job with Defendant Tribe.

Compl. ¶ 14.

At the

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time that she was employed with Defendant Tribe, Knighton was

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also employed with Plaintiff RISE.

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her resignation, Knighton and Defendant Tribe agreed that “she

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was owed the sum of $29,925, which represented accrued but unused

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665 hours of sick leave.”

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“it was understood that the sum would be paid to RISE to maintain

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health insurance” for Knighton.

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2013, Plaintiff received a letter from Defendant Tribe demanding

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reimbursement of the $29,925 paid to RISE on behalf of Knighton.

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Compl. ¶ 14.

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Compl. ¶ 12.

Compl. ¶ 14.

At the time of

Plaintiff alleges that

Compl. ¶ 14.

On December 18,

On October 2, 2014, Defendant Tribe filed a complaint in

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Cedarville Rancheria Tribal Court (“Tribal Court”) against RISE

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and Knighton.

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Court Action”) alleges multiple causes of action against

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Knighton, for “poor investments” that she made while employed

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with Defendant Tribe.

Compl. ¶ 11.

The Tribal Court complaint (“Tribal

Compl. ¶ 12.

Defendant Tribe also filed

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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was
scheduled for January 28, 2015.
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an ex parte application for a temporary restraining order against

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RISE and Knighton in the Tribal Court Action.

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Plaintiff alleges that this application was granted without

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providing RISE “with prior notice of the [a]pplication or a

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chance to be heard.”

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“the Tribal Court unilaterally ruled that it has subject matter

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jurisdiction over the action[.]”

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not allege that it has affirmatively pursued a challenge to the

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Tribal Court’s jurisdiction in the Tribal Court.

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Compl. ¶16.

Compl. ¶ 16.

Plaintiff further alleges that

Compl. ¶ 17.

Plaintiff does

On October 30, 2014, Plaintiff filed a complaint (Doc. #1)

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in this Court for declarative and injunctive relief against

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Defendant Tribe and Tribal Court Defendants.

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filed a motion for a temporary restraining order on November 19,

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2014 (Doc. #4), which was denied for failure to provide notice to

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Defendants (Doc. #5).

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the motion for a temporary restraining order (Doc. #8).

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motion was again denied on the grounds that Plaintiff had failed

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to show the need for an expedited ruling (Doc. #9).

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motion for a temporary restraining order was then converted into

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a motion for a preliminary injunction.

Plaintiff also

On November 26, 2014, Plaintiff re-filed
The

Plaintiff’s

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II.

OPINION

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A.

Judicial Notice

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Tribal Court Defendants request that the Court take judicial

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notice of several documents (Doc. #20).

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judicial notice of Plaintiff’s complaint, Plaintiff’s motion for

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a temporary restraining order/preliminary injunction, the Court’s

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November 26, 2014 Order, and the parties’ December 12, 2014
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First, they request

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stipulation for an extension of time to file a responsive

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pleading.

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case, and the request is denied as unnecessary.

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These documents are already part of the record in this

Tribal Court Defendants also request that the Court take

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judicial notice of “the Declaration of Jack Duran, and all

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attached exhibits submitted in support of [Defendant Tribe’s]

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motion for sanctions.”

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Exhibit 3, and Exhibit 7 to the Duran Declaration (Doc. #28) are

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filings from the Tribal Court Matter.

Doc. #20 at 2.

Exhibit 1, Exhibit 2,

As these court filings are

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matters of public record, they are appropriate for judicial

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notice.

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*2 (C.D. Cal. 2009) (citing Lee v. City of Los Angeles, 250 F.3d

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668, 688 (9th Cir. 2001) and Fed. R. Evid. 201). However, the

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Court merely takes judicial notice of the existence of these

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filings, not of the facts included therein.

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See, e.g., Sherman v. Stryker Corp., 2009 WL 2241664 at

Exhibit A, Exhibit B, and Exhibit 4 of the Duran Declaration

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appear to be email communications between Defendant Tribe’s

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counsel and Plaintiff’s counsel.

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not appropriate for judicial notice and the request is denied

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with respect to these three exhibits.

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These email communications are

Exhibit 5 is an excerpt of the Federal Register noting that

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Cedarville Rancheria is an “Indian Tribal Entity . . . Eligible

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to Receive Benefits from the United States Bureau of Indian

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Affairs.”

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to reasonable dispute, therefore the request for judicial notice

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is granted.

This fact is a matter of public record and not subject

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Exhibit 6 appears to be a slip opinion from a 2012 Ninth

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Circuit case, Grand Canyon Skywalk Development, LLC v. Sa Nyu Wa,
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Inc..

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simply been referred to in the briefs with a legal citation.

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The request for judicial notice is denied.

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This case is easily accessible on Westlaw and should have

Finally, Tribal Court Defendants request that the Court take

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judicial notice of the Cedarville Rancheria Judicial Code, which

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is attached to Plaintiff’s complaint.

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“attached to the complaint and incorporated within its

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allegations” are part of the pleadings, and are properly before

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the Court on a motion to dismiss.

Documents that are

Shade v. Wells Fargo Bank,

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2009 WL 1704715, at *1 (E.D. Cal. June 17, 2009).

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not take judicial notice of a document attached to Plaintiff’s

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complaint, therefore this request is denied as unnecessary.

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B.

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The Court need

Discussion
1.

Motions to Dismiss

Defendant Tribe and Tribal Court Defendants both argue that

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Plaintiff’s complaint must be dismissed in its entirety because

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Plaintiff failed to exhaust its remedies by challenging

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jurisdiction in the Tribal Court.

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MTD at 6.

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its remedies in the Tribal Court, but argues that the exhaustion

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requirement does not apply because (a) “the assertion of tribal

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court jurisdiction is ‘motivated by a desire to harass or is

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conducted in bad faith;’ (b) the tribal court action is ‘patently

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violative of express jurisdictional prohibitions;’ (c)

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‘exhaustion would be futile because of the lack of an adequate

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opportunity to challenge the tribal court’s jurisdiction;’ and

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(d) it is ‘plain’ that jurisdiction is lacking, so that the

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exhaustion requirement ‘would serve no purpose other than

Tribe MTD at 5; Tribal Court

Plaintiff appears to concede that it has not exhausted

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delay.’”

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(both citing Elliott v. White Mountain Apache Tribal Court, 566

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F.3d 842 (9th Cir. 2009)).

Opp. to Tribe MTD at 9; Opp. to Tribal Court MTD at 10

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The Ninth Circuit has noted that “[f]ederal law has long

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recognized a respect for comity and deference to the tribal court

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as the appropriate court of first impression to determine its

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jurisdiction.”

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Inc., 715 F.3d 1196, 1200 (9th Cir. 2013).

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cited three reasons for this approach: (1) Congress’s commitment

Grand Canyon Skywalk Dev., LLC v. 'Sa' Nyu Wa
The Supreme Court has

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to “a policy of supporting tribal self-government and self-

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determination;” (2) the prudence of allowing “the forum whose

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jurisdiction is being challenged the first opportunity to

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evaluate the factual and legal bases for the challenge;” and

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(3) the interest of judicial economy, which is served “by

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allowing a full record to be developed in the Tribal Court.”

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Nat'l Farmers Union Ins. Companies v. Crow Tribe of Indians, 471

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U.S. 845, 856 (1985).

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Accordingly, “non-Indian defendants must exhaust tribal

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court remedies before seeking relief in federal court[.]”

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Burlington N. R. Co. v. Crow Tribal Council, 940 F.2d 1239, 1244

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(9th Cir. 1991) (emphasis in original).

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noted that the exhaustion requirement applies “even where

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defendants allege that proceedings in tribal court exceed tribal

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sovereign jurisdiction.”

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courts should not even make a ruling on tribal court jurisdiction

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. . . until tribal remedies are exhausted.”

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Skywalk, 715 F.3d at 1200.

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it has exhausted its tribal court remedies where:

Id. at 1244.

The Ninth Circuit has

Therefore, “federal

Grand Canyon

However, a party need not show that

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(1) an assertion of tribal jurisdiction is motivated
by a desire to harass or is conducted in bad faith;
(2) the action is patently violative of express
jurisdictional prohibitions; (3) exhaustion would be
futile because of the lack of adequate opportunity to
challenge the court’s jurisdiction; or (4) it is plain
that no federal grant provides for tribal governance
of nonmembers’ conduct on [its] land[.]

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Burlington, 940 F.2d at 1244.

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If none of these exceptions apply, federal jurisdiction will not
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lie until all tribal remedies have been exhausted.
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As noted above, Plaintiff concedes that it has not exhausted
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its tribal remedies.

Opp. to Tribe MTD at 7; Opp. to Tribal

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Court MTD at 9.

Specifically, it does not argue that it has

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already challenged the Tribal Court’s jurisdiction in the Tribal
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Court.

Rather, Plaintiff argues that that it would be forced “to

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expend substantial money and resources to establish the lack of
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the Tribal Court’s jurisdiction by exhausting Tribal Court
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remedies where [each of the four above-quoted exceptions
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applies.]”

Opp. to Tribe MTD at 8-9; Opp. to Tribal Court MTD at

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10.

However, Plaintiff goes no further than naming each of the

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four exceptions to the traditional requirement of tribal court
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exhaustion.

Plaintiff does not address why any of these

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exceptions should apply to this case.

Nor does Plaintiff point

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to any specific factual allegations which would support the
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application of a specific exception to this case.

Indeed, in

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Plaintiff’s Complaint, there are no additional specific factual
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allegations to support the application of each exception to the
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exhaustion requirement.

See Compl. ¶ 9 (citing Elliot for the

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four exceptions to the exhaustion requirement, but not providing
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additional, specific supporting allegations).

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supporting allegations, and without any further argument to

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connect the facts of this case to one of the four exceptions

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listed above, the Court finds that none of these exceptions

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apply.

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court remedies, this Court may “not even make a ruling on tribal

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court jurisdiction.”

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Without any

In light of Plaintiff’s failure to exhaust its tribal

Grand Canyon Skywalk, 715 F.3d at 1200.

Plaintiff’s attempt to distinguish Burlington is
unpersuasive.

Opp. to Tribe MTD at 8; Opp. to Tribal Court MTD

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at 9.

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Burlington differs somewhat from that of this case, the Ninth

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Circuit’s general description of the exhaustion requirement – and

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the four exceptions to that requirement – is nevertheless binding

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on this Court.

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the Burlington court precisely addressed the issue presented

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here, noting that the exhaustion requirement applies “even where

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defendants allege that proceedings in tribal court exceed tribal

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sovereign jurisdiction.”

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differences between Burlington and the present case, Burlington

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accurately lays out the applicable legal framework.

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Although the factual and procedural background of

Burlington, 940 F.2d at 1244 at 1065.

Id. at 1244.

Moreover,

Regardless of the factual

Plaintiff cites a number of cases which discuss the limited

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circumstances in which a federal court need not recognize the

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judgment of a tribal court.

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Court MTD at 10-11 (both citing Wilson v. Marchington, 127 F.3d

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805 (9th Cir. 1997) and AT & T Corp. v. Coeur d'Alene Tribe, 295

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F.3d 899 (9th Cir. 2002)).

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the Court is not whether the judgment of the Tribal Court should

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be recognized and enforced; rather, the Court must initially

Opp to Tribe MTD at 9; Opp to Tribal

However, the issue presently before

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consider whether Plaintiff’s failure to exhaust its tribal

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remedies is fatal to its invocation of federal jurisdiction.

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cases cited by Plaintiff, which discuss “comity” and

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“recognition” of tribal court judgments, are not instructive on

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this point.

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The

As Plaintiff has failed to exhaust its tribal court remedies

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– and as Plaintiff has failed to establish that one of the four

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exceptions to the exhaustion requirement applies – this Court may

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not consider the merits of Plaintiff’s claim.

Burlington, 940

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F.2d at 1244; Grand Canyon Skywalk, 715 F.3d at 1200.

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need not – and should not – address Defendant Tribe and Tribal

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Court Defendants’ arguments with respect to sovereign immunity,

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ripeness, and failure to state a claim, in light of Plaintiff’s

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failure to exhaust its tribal court remedies.

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940 F.2d at 1242-43 (declining to consider “jurisdictional issues

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of constitutional dimension” before considering the exhaustion

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issue).

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exhausting its tribal court remedies, Defendant Tribe and Tribal

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Court Defendants’ motions to dismiss are granted without

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prejudice.

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The Court

See Burlington,

Because Plaintiff can cure the jurisdictional defect by

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Motion for Sanctions

Defendant Tribe urges the Court to “impose Rule 11 sanctions

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on Plaintiff’s counsel for premature filing of the Complaint in

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this matter.”

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argues that “the Complaint is not legally tenable or well-

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grounded in fact.”

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that sanctions are not appropriate because “there is a genuine

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and legitimate dispute as to the jurisdiction asserted by” the

Mot. for Sanctions at 1.

Defendant Tribe further

Mot. for Sanctions at 1.

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Plaintiff responds

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Tribal Court.

Opp. to Mot. for Sanctions at 5.

Rule 11 of the Federal Rules of Civil Procedure provides for

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the imposition of sanctions when a filing is frivolous, legally

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unreasonable, lacks factual foundation, or is brought for an

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improper purpose.

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Circuit has established “that sanctions must be imposed on the

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signer of a paper if either a) the paper is filed for an improper

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purpose, or b) the paper is ‘frivolous.’”

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Consulting Corp., 929 F.2d 1358, 1362 (9th Cir. 1990).

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Fed. R. Civ. P. 11(b)(1)-(4).

The Ninth

Townsend v. Holman

Rule 11 sanctions are not appropriate in this case.

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Although Plaintiff has failed to convince this Court that

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Plaintiff’s failure to exhaust its tribal court remedies should

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be excused, the Court does not find that Plaintiff’s complaint

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was frivolous or brought for an improper purpose.

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correctly cited four well-established exceptions to the

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exhaustion requirement, but failed to successfully argue that the

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facts of this case merit the application of one of those

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exceptions.

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Defendant Tribe’s motion for sanctions is denied.

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3.

Plaintiff

Not all unsuccessful arguments are sanctionable.

Motion for Preliminary Injunction

As the Court has granted Defendant Tribe and Tribal Court

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Defendants’ motions to dismiss for failure to exhaust tribal

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remedies, the Court does not have jurisdiction to consider

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Plaintiff’s motion for a preliminary injunction.

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Court need not consider Defendants’ joint objection to

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Plaintiff’s motion, on the grounds that service was improper

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(Doc. #22).

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denied for lack of jurisdiction.

Relatedly, the

Plaintiff’s motion for a preliminary injunction is

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III.

ORDER

For the reasons set forth above, the Court GRANTS WITHOUT

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PREJUDICE Defendant Tribe’s motion to dismiss, GRANTS WITHOUT

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PREJUDICE Tribal Court Defendants’ motion to dismiss, DENIES

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Defendant Tribe’s motion for sanctions, and DENIES Plaintiff’s

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motion for a preliminary injunction.

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Amended Complaint once it has exhausted its tribal court

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remedies.

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IT IS SO ORDERED.
Dated: February 12, 2015

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Plaintiff may file a First