Harris v. Muscogee (Creek) Nation, The et al
Filing
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OPINION AND ORDER by Chief Judge Gregory K Frizzell ; terminating party Muscogee (Creek) Nation ; granting 11 Motion to Dismiss (hbo, Dpty Clk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
KAREN HARRIS,
Plaintiff,
v.
MUSCOGEE (CREEK) NATION d/b/a
RIVER SPIRIT CASINO, and
HUDSON INSURANCE COMPANY,
Defendants.
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Case No. 11-CV-654-GKF-FHM
OPINION AND ORDER
Before the court are the Motion to Dismiss of defendant Muscogee (Creek) Nation
(“Creek Nation”) [Dkt. #11] and the Motion to Dismiss of defendant Hudson Insurance
Company (“Hudson”) [Dkt. # 12].
Plaintiff, a customer of River Spirit Casino, was injured in slip and fall accident at the
casino on May 10, 2009. She filed suit in Tulsa County District Court against Creek Nation, the
owner of the casino, asserting a claim for negligence, and against Hudson, the casino’s liability
insurer. [Dkt. #2-1, Petition [Id., ¶¶22-23]. Plaintiff asserts she is a third party beneficiary of the
insurance policy and Hudson has breached the policy by denying her tort claim. [Id., ¶25].
Creek Nation removed the case to federal court pursuant to 28 U.S.C. §§ 1331, 1441 and 1446,
alleging federal question jurisdiction. [Dkt. #2, Notice of Removal]. Specifically, Creek Nation
asserted the federal question raised by plaintiff’s action is whether the state court has jurisdiction
over a tort action arising in Indian Country against the Creek Nation. [Dkt. #2 at 1]. Citing
Williams v. Lee, 358 U.S. 217, 217-18 (1959), the Creek Nation argued federal law determines
whether a state may exercise jurisdiction over civil actions against Indians in Indian Country.
[Id. at 3].
Subsequently, the Creek Nation filed a Rule 12(b)(1) Motion to Dismiss, asserting
plaintiff’s claim against it was barred by tribal sovereign immunity, which deprives the court of
subject matter jurisdiction. Hudson also moved to dismiss the breach of contract claim pursuant
to Rule 12(b)(6), on the basis that Oklahoma does not recognize a claim by an injured plaintiff
against an insurer based on a third party beneficiary theory.
I. Allegations of the Complaint
The Petition asserts the state court has subject matter jurisdiction and personal
jurisdiction pursuant to 12 O.S. Supp. 2002, § 2004(F) and 3A O.S. § 281 (the Gaming Compact
between Oklahoma and the Creek Nation). [Dkt. #2-1, Petition, ¶5]. It alleges that plaintiff was
injured on May 2009, when she slipped and fell at the entrance of the River Spirit Casino,
breaking her right wrist. [Id., ¶10]. Plaintiff alleges the marble floor of the entrance way was
wet from rainfall earlier in the evening, and the casino negligently failed to dry the floor and/or
post signs warning the floor was wet. [Id., ¶¶11, 15-18]. Plaintiff alleges she filed a Notice of
Tort Claim on August 3, 2009, with the Gaming Commissioner and the Deputy Commissioner of
the Creek Nation, as required by 3A Okla.Stat. § 281, et seq. [Id., ¶1]. On March 25, 2011, the
insurer, Hudson, denied the claim. [Id., ¶8]. Plaintiff seeks compensatory damages against the
Creek Nation for negligence and against Hudson for breach of contract. [Id., ¶¶20, 27].
II. Propriety of Removal
Plaintiff did not contest the Creek Nation’s removal of this case to federal court based on
federal question jurisdiction. However, the court has an obligation under Rule 12(h)(3) to
determine the existence of jurisdiction sua sponte.
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A case arises under federal law if the well-
pleaded complaint establishes either that federal law creates the cause of action or that within
plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal
law. Empire Healthcare Assur., Inc. v. McVeigh, 547 U.S. 677, 689-90 (2006). This, in turn,
requires the court to determine whether the state claim “necessarily raise[s] a stated federal issue,
actually disputed and substantial, which a federal forum may entertain without disturbing any
congressionally approved balance of federal and state judicial responsibilities.” Grable & Sons
Metal Prod., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 314 (2005).
Creek Nation’s motion raises the issue of whether a consent to suit provision in the StateTribal Gaming Compact operates to waive the tribe’s immunity from suit in state or federal
court. The answer requires interpretation of IGRA and the gaming compacts it mandates. As
discussed below, the issue has been heavily litigated in recent years in Oklahoma. Additionally,
there appears to be little danger that the exercise of federal jurisdiction in this matter will upset
the congressionally approved balance of federal and state judicial responsibilities. Thus, the
court concludes the exercise of federal jurisdiction over the Creek Nation’s motion to dismiss is
appropriate.
III. Rule 12(b)(1) Motion
The Tribal Gaming Compact between the State of Oklahoma and the Creek Nation
contains a limited consent to suit “in a court of competent jurisdiction” with respect to tort claims
against the enterprise arising out of incidents occurring at a gaming facility. [Dkt. #11, Creek
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Nation’s Motion to Dismiss, Ex. 2, Part 6(A)2) and (6)(C)].1 The compact is identical to
Oklahoma’s Model Gaming Compact. See 3A O.S. § 281, Part 6(A)(2) and 6(C).
Plaintiff contends the limited consent operates as a waiver of sovereign immunity from
this case lies with its tribal courts.
A. Applicable Standard
Rule 12(b)(1) motions generally take one of two forms. “The moving party may (1)
facially attack the complaint’s allegations as to the existence of subject matter jurisdiction, or (2)
go beyond allegations contained in the complaint by presenting evidence to challenge the factual
basis upon which subject matter jurisdiction rests. Merrill Lynch Bus. Fin. Servs., Inc. v. Nudell,
363 F.3d 1072, 1074 (10th Cir. 2004) (quoting Maestas v. Lujan, 351 F.3d 1001, 1013 (10th Cir.
2003)). The Creek Nation’s motion is premised on its claim that it has not waived sovereign
immunity from suit in state court, thus challenging the factual basis for subject matter
jurisdiction. Therefore, the court may consider evidence challenging the factual basis upon
which subject matter jurisdiction is based.
“Tribal sovereign immunity is a matter of subject matter jurisdiction, which may be
challenged by a motion to dismiss under Fed.R.Civ.P. 12(b)(1).” Miner Electric, Inc. v.
Muscogee (Creek) Nation, 505 F.3d 1007, 1009 (10th Cir. 2007). Tribal sovereign immunity
deprives a court of subject matter jurisdiction to decide any of the other matters between the
parties. Id.
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Only Parts 6 and 9 of the Creek Nation Compact were attached to defendant’s motion. The
compact is available in its entirety at the National Indian Gaming Commission’s website,
NIGC.gov, under “Compacts.”
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“Indian tribes have long been recognized as possessing the common-law immunity from
suit traditionally enjoyed by sovereign powers.” Crowe & Dunlevy, P.C. v. Stidham, 640 F.3d
1140, 1153 (10th Cir. 2011) (quoting Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978).
That immunity also extends to “sub-entities or enterprises of a tribe.” Native American
Distributing v. Seneca-Cayuga Tobacco Co., 491 F. Supp.2d 1056, 1064 (N.D. Okla. 2007)
aff’d, 546 F.3d 1288 (10th Cir. 2008); see also Breakthrough Management Group, Inc. v.
Chukchansi Gold Casino and Resort, 629 F.3d 1173, 1195-96 (10th Cir. 2010) (affirming that
tribal casinos generally enjoy sovereign immunity unless otherwise waived).
The Indian Gaming Regulatory Act, 25 U.S.C. § 2701, et seq., (“IGRA”), provides for
execution of gaming compacts between States and Tribes and describes the permissible scope of
those compacts. Under IGRA, compacts may include provisions relating to the application of the
criminal and civil laws and regulations of the Indian tribe or the State that are “directly related to,
and necessary for, the licensing and regulation of such activity,” and may also include provisions
for allocation of criminal and civil jurisdiction between the State and the Indian tribe for the
enforcement of such laws and regulations. 25 U.S.C. § 2710(d)(3)(C)(i)-(ii). IGRA itself,
however, only waives tribal sovereign immunity “in the narrow category of cases where
compliance with IGRA’s provisions is at issue and where only declaratory or injunctive relief is
sought.” See Mescalero Apache Tribe v. New Mexico, 131 F.3d 1379, 1385-86 (10th Cir. 1997);
25 U.S.C. § 2710(d)(7)(A)(ii).
Further, any waiver of sovereign immunity by the Tribe itself cannot be implied but must be
“unequivocally expressed.” Ute Distribution Corp. v. Ute Indian Tribe, 149 F.3d 1260, 1263
(10th Cir. 1998). Plaintiff contends the Creek Nation waived sovereign immunity in Part
6(A)(2) and (6)(C) of its Gaming Compact with the State of Oklahoma.
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In Cossey v. Cherokee Nation Enterprises, LLC, 212 P.3d 447 (Okla. 2009), a divided
Oklahoma Supreme Court held that Oklahoma state courts are “courts of competent jurisdiction”
to hear third-party tort claims by non-Indian customers brought against tribal casinos.
Subsequently, in Griffith v. Choctaw Casino of Pocola, 230 P.3d 488 (Okla. 2009) and Dye v.
Choctaw Casino of Pocola, 230 P.3d 507 (Okla. 2009), the Oklahoma Supreme Court held that
any state or tribal court can retain jurisdiction pursuant to the tribal-state gaming compact as
“courts of competent jurisdiction” over a non-Indian’s tort claim against an Indian tribe or its
casino enterprise.
The rulings in Griffith and Dye prompted the Choctaw Nation and Chickasaw Nation, in
2009, to demand arbitration with the State of Oklahoma pursuant to the arbitration clause in the
Model Compact, as authorized by IGRA. The tribes sought a declaratory ruling as to whether
the Model Compacts allow Indian tribes operating “Class III” gaming facilities to be sued in
state court for tort claims. On August 25, 2009, the arbitrator issued an Arbitration Award
determining the Model Compacts did not waive tribal sovereign immunity such that state courts
could exercise civil jurisdiction over non-Indians’ claims against Indian casinos. [Dkt. #11, Ex.
2, Arbitration Award].
The Choctaw Nation moved for the Oklahoma Supreme Court to reconsider its decisions
in Dye and Griffith, which the court declined to do. See Choctaw Nation v. Oklahoma, 2010 WL
5798663 at *4, ¶24 (W.D. Okla. June 29, 2010). The Choctaw and Chickasaw Nations then filed
suit in the United States District Court for the Western District of Oklahoma, seeking
certification and enforcement of the Arbitration Award. Id. United States District Judge Lee R.
West granted the tribes’ motion for summary judgment on their claims. Id. The court issued a
Judgment and Permanent Injunction that prevents the State of Oklahoma, including all State
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courts, “from asserting civil-adjudicatory jurisdiction over Compact-based tort claim…lawsuits
against the Nations.” Id. at *5. In the order, Judge West stated that “any attempt by any
Oklahoma state court, including the Oklahoma Supreme Court, to exercise jurisdiction over a
Compact-based tort claim … lawsuit is a violation of the sovereignty of the Nations ….” Id. at
*4, ¶23.
Six months later, Judge West entered a similar judgment in favor of the Osage Nation,
Comanche Nation, Delaware Nation and the Wichita and Affiliated Tribes. [Dkt. #11, Ex. 3,
Judgment, Case No. CIV-10-1339-W (W.D. Okla. Dec. 28, 2010)].
In Muhammad v. Comanche Nation Casino, Case No. 2010 WL 4365568 at *7-*11
(W.D. Okla. Oct. 27, 2010), United States District Judge Timothy D. DeGiusti found the Model
Compact between Oklahoma and the Comanche Nation does not waive tribal sovereign
immunity from suit in Oklahoma state courts. In so ruling, the court noted the compact was
governed by IGRA and “its strong policy of promoting tribal self-government.” Id. at *10. The
court stated:
Nothing in the Compact permits an inference that the tribe intended “a court of
competent jurisdiction to include state courts. Parts 5 and 6 of the Compact specifically
provide for the application of tribal rules and regulations to tort claims by casino
patrons against the tribal gaming enterprise, and those regulations limit actions to
tribal court.
Id.
Finally, in Santana v. Muscogee (Creek) Nation, 2012 WL 896243 (N.D. Okla. March
15, 2012), United States District Judge James H. Payne reached a similar conclusion regarding
the Compact between Oklahoma and the Creek Nation.
This court concurs with the rulings by Judges DeGuisti and Payne. In Muhammad, the
court recognized that under federal law generally, a tribe’s waiver of immunity must be “clear.”
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2010 WL 435568 at *9, n. 11. The court found the legislative policy and intent behind IGRA
sets an even higher bar for waiver, stating: “IGRA rests on the premise that ‘Indian tribes have
the exclusive right to regulate gaming activity on Indian lands if the gaming activity is not
specifically prohibited by Federal law and is conducted within a State which does not, as a
matter of criminal law and public policy, prohibit such gaming activity.’” Id., at *9 (citing 25
U.S.C. § 2701(5)). “Given this premise, only an affirmative extension of state civil-adjudicatory
jurisdiction by a tribal-state gaming compact will be sufficient to have this effect.” Id. (emphasis
added).
As noted by the court in Santana, the compact between the Muscogee (Creek) Nation and
the State of Oklahoma took effect in April 2005. 70 Fed.Reg. 18041-01 (April 8, 2005). The
court has reviewed the compact for an “unequivocable waiver” of sovereign immunity against
suit in state court, and finds none. To the contrary, an examination of the compact compels the
opposite conclusion.
Part 6(c) of the Compact waives tribal immunity and consents to suit for tort and prize
claims in a “court of competent jurisdiction.” The Compact does not define “court of competent
jurisdiction.” However, nowhere in Part 6 or any other part of the Compact does the tribe
consent to extension of state civil-adjudicatory jurisdiction. Rather, the compact provides, “This
Compact shall not alter tribal, federal or state civil adjudicatory or criminal jurisdiction.” Id., Part
9.
Other language in the compact supports a conclusion that no waiver has occurred. For
example, Part 6(A) states, “The enterprise shall ensure that patrons are afforded due process in
seeking and receiving just and reasonable compensation for a tort claim…” (emphasis added).
Part 6(A)(4)-(10) sets out the process for filing of tort claims with the tribal compliance agency
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or enterprise, and processing of those claims by the tribal compliance agency or enterprise.
Additionally, Part 5(A) makes the tribe responsible for promulgating rules and regulations
necessary to implement the compact.
The court concurs with Judge Payne that the gaming compact between the Muscogee
(Creek) Nation and the State of Oklahoma does not waive the tribe’s sovereign immunity against
tort suits in Oklahoma state courts. Therefore, Creek Nation’s Motion to Dismiss for lack of
subject matter jurisdiction must be granted.
IV. Hudson’s Rule 12(b)(6) Motion
Plaintiff’s claim against Hudson is a state common law claim for breach of contract based
on a third party beneficiary theory. Having granted the Creek Nation’s subject matter
jurisdiction motion, the court declines to exercise pendent jurisdiction over the contract claim.
V. Conclusion
For the foregoing reasons, defendant Creek Nation’s Motion to Dismiss [Dkt. #11] is
granted.
ENTERED this 18th day of June, 2012.
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