AGAMENV, LLC et al v. Laverdure et al
Filing
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ORDER by Judge Daniel L. Hovland denying 3 Motion for Temporary Restraining Order (CP)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
NORTHWESTERN DIVISION
AGAMENV, LLC, a/k/a Dakota Gaming,
LLC; Ray Brown; and Steven Haynes,
)
)
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ORDER DENYING PLAINTIFFS’
Plaintiffs,
)
MOTION FOR TEMPORARY
)
RESTRAINING ORDER
vs.
)
)
Case No. 4:12-cv-074
Andrew Laverdure, purporting to act in his )
capacity as an Associate Judge for Turtle
)
Mountain Tribal Court; Mike Malaterre,
)
Cindy Malaterre, Elmer Davis, and Lorne )
Jay, purporting to act in their capacity as
)
Tribal Council Members,
)
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Defendants.
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______________________________________________________________________________
Before the Court is the Plaintiffs’ “Emergency Motion for Temporary Restraining Order and
Preliminary Injunction,” filed on June 8, 2012. See Docket No. 3. For the reasons explained below,
the motion is denied.
I.
BACKGROUND
On December 21, 2011, the Tribal Council of the Turtle Mountain Band of Chippewa
Indians (“Tribe”) issued Resolution Number TMBC586-11-11 (Revised) which states, in pertinent
part:
WHEREAS, the Tribe is initiating a business venture for providing a casino in the
Trenton area; and
WHEREAS, the Tribe is entering into a development agreement to proceed with
the business venture; now
THEREFORE BE IN RESOLVED that the Tribe is entering in a development
agreement with AGAMENV to proceed with plans for the casino in the
Trenton area.
See Docket No. 1-3, p. 14.
On February 22, 2012, the Turtle Mountain Band of Chippewa Indians (“Tribe”) entered into
a Gaming Equipment Participation Agreement and Loan Agreement with plaintiff AGAMENV for
the purpose of constructing and operating a new casino, the Painted Pony Casino. See Docket Nos.
1-3 and 1-5.
On April 30, 2012, Lorraine Laverdure, Gaming Investigator for the Tribe, sent a letter to
plaintiff Ray Brown, one of the primary members of AGAMENV, stating, “This notice is to inform
you that the Tribal Gaming Office has not received your application to Distribute Gaming
Equipment and Supplies. Therefore, you will not be allowed to continue business with the Painted
Pony Casino in Trenton, North Dakota.” See Docket No. 1-8.
On May 2, 2012, the four Tribal Council members that had voted against the December 21,
2011 resolution filed a “Complaint and Petition For a Preliminary Injunction” in Turtle Mountain
Tribal Court in Belcourt, North Dakota. See Docket No. 1-9. The plaintiffs in the Tribal Court
action allege, in part:
5.
That Plaintiffs have been unable to locate an applicable Resolution as is
required by the Turtle Mountain Constitution to verify the approval of the
Development Agreement that assigned all responsibilities, duties and
covenants from AGAMENV (entered into on or around 11-11-11) to Dakota
Gaming LLC.
6.
That Plaintiffs have been unable to locate a Declination Letter from NIGC
that would identify that the above Agreements Exhibit B were determined not
to be considered Management Agreements and/or do not violate the “sole
proprietor” requirement in the Indian Gaming Regulatory Act (IGRA).
7.
That Defendants have failed to comply with the Turtle Mountain Tribal
Gaming Code Exhibit D by failing to complete and submit applicable
vendor’s license applications as is required by the Gaming Code Section 251-16 Commission’s Powers and Duties, (b), (c) and have failed to provide
access to the Tribal Gaming Commission so as to identify who the primary
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management officials are, and who is to be employed at the Trenton site so
that Gaming licenses can be issued,, in compliance with Section 25-10-16 (c)
and (f), and the Turtle Mountain Gaming Commission has not been allowed
to view and approve the expenditures of any tribally operated Class II
gaming enterprises in compliance with Section 25-1-16 (h) of said Gaming
Code.
See Docket No. 1-9 (errors and emphasis in original). The plaintiffs requested the following:
1.
Issuance of a Temporary Restraining Order, restraining Defendant from
acting as Developer and performing the the actions identified in Exhibit B,
the Agreements that Defendant would be responsible for and to be enjoined
from continuing to violate the Turtle Mountain Gaming Code, and to be
cease an attempt to open the Trenton property;
2.
Issuance of a Preliminary Injunction enjoining Defendant from providing any
services or operating as developer in regard to the Trenton property during
the pendency of this action;
3.
And on a final hearing, Defendant be permanently enjoined from being a
party to this development so long as any applicable Turtle Mountain Tribal
Laws or Regulations are not complied with.
4.
Plaintiff requests such other and further relief as the Court deems proper.
See Docket No. 1-9 (errors in original).
On May 10, 2012, Tribal Court Associate Judge Andrew Laverdure issued an “Ex Parte
Temporary Restraining Order and Preliminary Injunction and Order for Show Cause Hearing.” See
Docket No. 1-10. Judge Laverdure ordered as follows:
1.
That the following Defendants: AGAMENV, LLC, aka Dakota Gaming,
LLC, associated Investors, Ray Brown and Steven Haynes are hereby
restrained from:
a.
Acting as Developer and performing the actions identified in Exhibit
B, the Agreement, until such time as a Show Cause Hearing can be
held;
b.
continuing to violate the Turtle Mountain Gaming Code;
c.
attempting to open the Trenton property;
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d.
e.
2.
providing any services or operating as Developer in regard to the
Trenton property during the pendency of this action and until such
time as a Show Cause Hearing can be held; and,
from being party to this development so long as any applicable Turtle
Mountain Tribal Laws or Regulations are not complied with.
That the Clerk of Court schedule an order to show cause hearing to be held
on June 8, 2012 at 1:00 pm at the Turtle Mountain Tribal Courthouse,
Belcourt, North Dakota.
See Docket No. 1-10.
On May 12, 2012, the Turtle Mountain Tribal Council met and adopted a resolution which
states, in part:
WHEREAS, the tribe passed a resolution, by a 5-0 vote, entering into a gaming
development contract with Dakota Gaming for the purposes of
constructing the Painted Pony Casino in the Trenton Indian Service
Area; and
WHEREAS, four individuals, claiming to be acting on behalf of the government,
filed for and received a preliminary injunction in an attempt to stop
the Painted Pony Casino; now
THEREFORE BE IT RESOLVED that the Turtle Mountain Band of Chippewa
Indians officially withdraws the “complaint and request for preliminary
injunction” and disavows the actions of Loren Jay, Mike Malaterre, Cindy
Malaterre and Elmer Davis, Jr. acting as individuals, in their attempt to stop
the Painted Pony Casino project. The Turtle Mountain Band of Chippewa
Indians’ official and properly promulgated position is that construction shall
continue and the Painted Pony Casino should open for business on Friday,
May 18th.
See Docket No. 1-11. The attorney for the Turtle Mountain Tribal Council subsequently filed a
“Motion to Withdraw Complaint and Petition for Preliminary Injunction and to Vacate TRO and
Preliminary Injunction.” See Docket No. 1-11.1
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The Court notes that the motion to withdraw the complaint was filed in Tribal Court by a non-party to the
litigation, a tactic the undersigned has never seen before in state or federal court.
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On June 7, 2012, Judge Laverdure issued an “Order for Closure of the Painted Pony,” which
states:
A Motion for Order of Contempt, filed by the petitioners in this matter, was received
by the Court on June 1, 2012 and reviewed by the Honorable Andrew Laverdure
on the 4th day of June, 2012. After careful review, the Court now Orders issued an
Order to show cause why the respondents should not be cited for civil contempt for
violation of an Ex Parte Temporary Restraining Order and Preliminary Injunction
issued on May 10, 2012.
As grounds for the Motion, petitioners presented the following:
1.
That the respondents were restrained from opening, developing
and/or operating the Class II gaming facility identified as the
“Painted Pony”.
2.
That the respondents, contrary to and in violation of the terms of the
above referenced May 10, 2012 Order, opened the “Painted Pony” on
or around May 25, 2012 and continue to operate said facility.
The respondents are now notified and ordered to show cause why they should not be
held in contempt.
At issue is full compliance with a properly executed Ex Parte Restraining Order and
Preliminary Injunction said Order for Show Cause Hearing issued by the Turtle
Mountain Tribal Court on May 10, 2012. The Order for Show Cause, issued June
7, 2012, mandates compliance and requires closure. Further, Law Enforcement of
the Bureau of Indian Affairs has been ordered to assist with compliance.
IT IS HEREBY ORDERED that the Painted Pony Casino in Trenton, North Dakota
be closed immediately until the matter is resolved in Turtle Mountain Tribal Court.
See Docket No. 1-12. Judge Laverdure scheduled a second show cause hearing for June 15, 2012.
On June 8, 2012, nearly a month after the Tribal Court had issued a temporary restraining
order, AGAMENV, Ray Brown, and Steven Haynes filed a complaint and “Emergency Motion for
Temporary Restraining Order and Preliminary Injunction” in federal district court. See Docket Nos.
1 and 3. The Plaintiffs allege the Tribal Council members are acting without the authority of the
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council. Therefore, the Tribal Court has no jurisdiction and Judge Laverdure’s orders are invalid.
The plaintiffs request an order enjoining:
(1) the Defendant Andrew Laverdure, in his purported capacity as an Associate
Judge for the Turtle Mountain Tribal Court, from enforcing orders that he has
already entered and/or from taking any further action in a Tribal Court proceeding
commenced by the Defendants Mike Malaterre, Cindy Malaterre, Lorne Jay, and
Elmer Davis purporting to act in their capacities as members of the Tribal Council
of the Turtle Mountain Tribe of Chippewa Indians, against Plaintiffs and (2) the
Defendants Mike Malaterre, Cindy Malaterre, Lorne Jay, and Elmer Davis from
pursuing or instituting claims against Plaintiffs in the Turtle Mountain Tribal Court.
See Docket No. 3.
The Court is unaware of what transpired at the show cause hearing that was to be held on
June 8, 2012, in Tribal Court.
II.
LEGAL DISCUSSION
In determining whether a temporary restraining order should be granted, Rule 65(b) of the
Federal Rules of Civil Procedure directs the court to look to the specific facts shown by an affidavit
to determine whether immediate and irreparable injury, loss, or damage will result to the applicant.2
In determining whether preliminary injunctive relief should be granted, the court is required to
consider the factors set forth in Dataphase Sys., Inc., v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir.
1981). Whether a preliminary injunction or temporary restraining order should be granted involves
consideration of “(1) the threat of irreparable harm to the movant; (2) the state of balance between
this harm and the injury that granting the injunction will inflict on other parties litigant; (3) the
probability that movant will succeed on the merits; and (4) the public interest.” Id.
2
It should be noted that neither an affidavit nor a verified complaint was filed in this case in accordance
with Rule 65(b) of the Federal Rules of Civil Procedure.
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It is well-established that the burden of establishing the necessity of a temporary restraining
order or a preliminary injunction is on the movant. Baker Elec. Coop., Inc. v. Chaske, 28 F.3d 1466,
1472 (8th Cir. 1994); Modern Computer Sys., Inc. v. Modern Banking Sys., Inc., 871 F.2d 734, 737
(8th Cir. 1989). “No single factor in itself is dispositive; in each case all of the factors must be
considered to determine whether on balance they weigh towards granting the injunction.” Baker
Elec. Coop., Inc., 28 F.3d at 1472 (quoting Calvin Klein Cosmetics Corp. v. Lenox Labs., Inc., 815
F.2d 500, 503 (8th Cir. 1987)).
A.
IRREPARABLE HARM
The plaintiff must establish there is a threat of irreparable harm if injunctive relief is not
granted and that such harm is not compensable by money damages. Doe v. LaDue, 514 F. Supp. 2d
1131, 1135 (D. Minn. 2007) (citing Northland Ins. Co. v. Blaylock, 115 F. Supp. 2d 1108, 1116 (D.
Minn. 2000)). “The ‘mere possibility’ that harm may occur before a trial on the merits is not
enough.” Johnson v. Bd. of Police Comm’rs, 351 F. Supp. 2d 929, 945 (E. D. Mo. 2004). The party
that seeks the temporary restraining order must show a significant risk of harm exists.
Doe, 514
F. Supp. 2d at 1135 (citing Johnson, 351 F. Supp. 2d at 945). The absence of such a showing is
sufficient grounds to deny injunctive relief. Id. (citing Gelco v. Coniston Partners, 811 F.2d 414,
420 (8th Cir. 1987)).
The Plaintiffs allege they will suffer irreparable harm without injunctive relief because the
“very existence” of their business is at stake. See Packard Elevator v. I.C.C., 782 F.2d 112, 115 (8th
Cir. 1986) (“Recoverable monetary loss may constitute irreparable harm only where the loss
threatens the very existence of the [petitioner]’s business”). The Plaintiffs have not established that
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the very existence of their business is at stake. They allege that they would have to expend time and
resources litigating in a tribal court they believe has no jurisdiction, but they have not shown that
this poses a risk to their business’s existence. Any loss resulting from the closing of the casino is
potentially compensable by money damages. This Dataphase factor weighs against granting a
temporary restraining order.
B.
BALANCE OF HARM
The Plaintiffs allege a temporary restraining order would merely restore the status quo, and
therefore the balance of harm weighs in their favor. In the “Ex Parte Temporary Restraining Order
and Preliminary Injunction and Order for Show Cause Hearing,” Judge Laverdure found:
7.
That the plaintiffs would suffer irreparable harm in the absence of
preliminary relief because of the Gaming Participation Agreement, and state
“Should the Painted Pony be allowed to open for one day, the remaining term
on the 83 month contract would be 2525 days @ 125/day (as listed in the
proposal provided to the Tribe at the September 10, 2011 meeting) for 142
machines (according to machine list of 5/1/12). Total due would be
$44,818,750.00;”
See Docket No. 1-10. The Court cannot determine, from the scant record before it, the penalties that
would be suffered by the plaintiffs and/or the tribe and its members as a result of the temporary
closure of the Painted Pony Casino. This factor weighs neither in favor of nor against granting a
temporary restraining order.
C.
PROBABILITY OF SUCCESS ON THE MERITS
When evaluating a movant’s “likelihood of success on the merits” the court should “flexibly
weigh the case’s particular circumstances to determine ‘whether the balance of equities so favors
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the movant that justice requires the court to intervene to preserve the status quo until the merits are
determined.’” Calvin Klein Cosmetics Corp., 815 F.2d at 503 (quoting Dataphase, 640 F.2d at 113).
At this preliminary stage, the Court does not decide whether the party seeking the temporary
restraining order will ultimately prevail. PCTV Gold, Inc. v. SpeedNet, LLC, 508 F.3d 1137, 1143
(8th Cir. 2007). Although a temporary restraining order cannot be issued if the movant has no
chance on the merits, “the Eighth Circuit has rejected a requirement as to a ‘party seeking
preliminary relief prove a greater than fifty per cent likelihood that he will prevail on the merits.’”
Id. (quoting Dataphase, 640 F.2d at 113). The Eighth Circuit has held that of the four factors to be
considered by the district court in considering preliminary injunctive relief, the likelihood of success
on the merits is “most significant.” S & M Constructors, Inc. v. Foley Co., 959 F.2d 97, 98 (8th Cir.
1992).
The Plaintiffs argue the tribal court does not have jurisdiction and exhaustion of tribal
remedies is not required. It is well-established that principles of comity require that tribal court
remedies must be exhausted before a federal district court should consider relief in a civil case
regarding tribal-related activities on reservation land. Krempel v. Prairie Island Indian Community,
125 F.3d 621, 622 (8th Cir. 1997) (citing Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9 (1987); Nat’l
Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845 (1985); Bruce H. Lien Co. v. Three Affiliated
Tribes, 93 F.3d 1412 (8th Cir. 1996)).
Exhaustion of tribal remedies means that tribal appellate courts must first have the
opportunity to review the determinations of the lower tribal courts. LaPlante, 480 U.S. 9, 17. In
short, “[t]he tribal exhaustion doctrine is based on ‘a policy of supporting self-government and selfdetermination,’” and although the rule is prudential rather than jurisdictional, “[e]xhaustion is
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mandatory . . . when a case fits within the policy.” Gaming World Int’l, Ltd. v. White Earth Band
of Chippewa, 317 F.3d 840, 849 (8th Cir. 2003) (citing LaPlante, 480 U.S. 9, 20 n.14; Nat’l Farmers
Union, 471 U.S. 845, 856; Duncan Energy Co. v. Three Affiliated Tribes, 27 F.3d 1294, 1300 (8th
Cir. 1994); Burlington N. R.R. Co. v. Crow Tribal Council, 940 F.2d 1239, 1245 (9th Cir. 1991)).
Although the criminal jurisdiction of tribal courts is subject to substantial federal limitation,
see Oliphant v. Suquamish Tribe, 435 U.S. 191 (1978), their civil jurisdiction is not so restricted.
Iowa Mutual Ins. Co. v. LaPlante, 480 U.S. 9, 15 (1987) (citing National Farmers Union Ins. Cos.
v. Crow Tribe, 471 U.S. 845, 854-55 (1985). However, as a general rule, “absent express
authorization by federal statute or treaty, tribal jurisdiction over the conduct of nonmembers exists
only in limited circumstances.” Strate v. A-1 Contractors, 520 U.S. 438, 445 (1997) (citing
Oliphant, 435 U.S. 191; Montana v. United States, 450 U.S. 544 (1981)). As the United States
Supreme Court explained, “‘the inherent sovereign powers of an Indian tribe’ –those powers a tribe
enjoys apart from express provision by treaty or statute– ‘do not extend to the activities of
nonmembers of the tribe.’” Id. at 445-46 (quoting Montana, 450 U.S. 544, 565)). Notwithstanding,
Indian tribes [do] retain inherent sovereign power to exercise some forms of civil
jurisdiction over non-Indians on their reservations, even on non-Indian fee lands. 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.
Montana, 450 U.S. 544, 565-66 (citations omitted).
Montana thus, described the general rule that, absent a different congressional
direction, Indian tribes lack civil authority over the conduct of nonmembers on nonIndian land within a reservation, subject to two exceptions: The first exception
relates to nonmembers who enter consensual relationships with the tribe or its
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members; the second concerns activity that directly affects the tribe’s political
integrity, economic security, health or welfare.
Strate v. A-1 Contractors, 520 U.S. 438, 446 (1997).
This dispute implicates both of the Montana exceptions. The Plaintiffs have chosen to enter
into agreements with the Turtle Mountain Tribal Council to construct and operate a casino on
reservation land. This dispute arises out of the formation of those contracts. Therefore, the dispute
involves consensual relationships with the tribe or its members. The dispute also involves the
internal operations of the tribal government, including the Turtle Mountain Tribal Council and the
Turtle Mountain Tribal Court. This directly involves the tribe’s political integrity. Questions
regarding the Plaintiffs and the Tribal Council’s compliance with the tribal constitution and tribal
gaming code are best decided initially in tribal court and, if necessary, the tribal appellate court. The
Court will not, at this early stage, inject itself into a tribal dispute involving the application of tribal
law. Based on the scant record before the Court, the Plaintiffs have not established a likelihood of
success on the merits. This Dataphase factor does not weigh in favor of granting a temporary
restraining order.
D.
PUBLIC INTEREST
The operation of the Painted Pony Casino and the employment and revenue it may generate
are matters in the public interest. Compliance with the tribal constitution and tribal gaming code
are also in the public interest. The Court is unable to reasonably determine the potential costs and
benefits involved with the temporary closure of the Painted Pony Casino. This factor weighs neither
in favor of nor against the issuance of a temporary restraining order.
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III.
CONCLUSION
After carefully reviewing the entire record and the Dataphase factors, the Court finds that
the Plaintiffs have not met their burden of establishing the necessity of a temporary restraining order
at this early stage of the litigation. The Court notes that the Turtle Mountain Tribal Court issued a
temporary restraining order on May 10, 2012, ordering the Plaintiffs to halt their involvement with
the casino until after a hearing was conducted on June 8, 2012. The Plaintiffs did not find it
necessary to request relief from the federal court until the same day of the show cause hearing on
June 8, 2012. In other words, the dispute among the Tribal Council members, the Turtle Mountain
Tribal Court, and the Plaintiffs has lingered for nearly one month. This Court will not enter into this
tribal dispute on such short notice. The Court DENIES the Plaintiff’s motion for a temporary
restraining order (Docket No. 3).
Dated this 11th day of June, 2012.
/s/ Daniel L. Hovland
Daniel L. Hovland, District Judge
United States District Court
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