State of Texas v. Ysleta Del Sur Pueblo et al

Filing 96

ORDER GRANTING 85 Motion to Compel; MOOTING 89 Motion for Authorization of Service. IT IS FURTHER ORDERED that Defendants Ysleta del SurPueblo, the Tribal Counsel, and the Tribal Governor Carlos Hisa,RESPOND to Plaintiffs discovery requests re lating to operations atSpeaking Rock and the functionality of the electronic bingo machines onor before June 6, 2018. IT IS FURTHER ORDERED that Defendants Ysleta del SurPueblo, the Tribal Counsel, and the Tribal Governor Carlos Hisa mustproduce all documents that are in the actual possession of the FraternalOrganization that are responsive to Plaintiffs discovery requestsrelating to operations at Speaking Rock and the functionality of theelectronic bingo machines. IT IS FURTHER ORDERED that all discovery-relateddeadlines, including the dispositive motion deadline, are herebyEXTENDED an additional THIRTY (30) DAYS to allow both partiesto comply with the provisions of this Order. IT IS FURTHER ORDERED that Defendants Ysleta del Sur Pueblo, the Tribal Counsel, and the Tribal Governor Carlos Hisas failure to comply with the Courts order may result in appropriate sanctions. Signed by Judge Philip R. Martinez. (dt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
EL PASO DIVISION
STATE OF TEXAS,
Plaintiff,
v.
YSLETA DEL SUR PUEBLO,
the TRIBAL COUNCIL, and
the TRIBAL GOVERNOR
CARLOS HISA or his
SUCCESSOR,
Defendants.

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EP-17-CV-179-PRM

ORDER GRANTING PLAINTIFF’S
MOTION TO COMPEL DISCOVERY RESPONSES
On this day, the Court considered Plaintiff State of Texas’s
“Motion to Compel Responses to Interrogatories and Requests for
Production” (ECF No. 85) [hereinafter “Motion”], filed on April 30, 2018,
in the above-captioned cause, Defendants Ysleta del Sur Pueblo, the
Tribal Counsel, and the Tribal Governor Carlos Hisa’s [hereinafter
collectively referred to as “Defendants”] “Response to Plaintiff’s Motion
to Compel” (ECF No. 88), filed on May 7, 2018, and Plaintiff’s “Reply in
Support of Motion to Compel” [hereinafter “Reply”], filed on May 14,
2018, in the above-captioned cause. After due consideration, the Court
concludes that Plaintiff’s request should be granted.

I.

BACKGROUND
On or about December 19, 2017, Plaintiff served Requests for

Production (“RFPs”) and a set of Interrogatories on Defendants. Mot. 3.
Defendants served initial responses and objections to the RFPs and
Interrogatories on January 26, 2018. Id. Defendants then served
supplemental responses to the Interrogatories and RFPs on March 15
and 19, 2018, respectively. Id. at 4.
Unfortunately, most of the interrogatory and RFP responses
provide only scant detail regarding Plaintiff’s inquiries. Specifically,
Plaintiff claims Defendants failed to provide discovery about the
operations at Speaking Rock and the functionality of the electronic
bingo machines therein.1 Defendants do not contest that they did not
provide this discovery, but offer multiple justifications. First,
Defendants claim that either third-party vendors or the Ysleta del Sur
Fraternal Organization [hereinafter the “Fraternal Organization”],
which is not a party to this litigation, are in possession of most of the
responsive documents and information. Further, Defendants claim that
some of Plaintiff’s discovery responses are unduly burdensome and
To the extent that there are other objections to Plaintiff’s discovery
requests that are outside the scope of Speaking Rock operations and the
bingo machines at issue, the Court does not pass upon those objections.
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overbroad. Finally, Defendants have suggested that their currently
pending motion to dismiss excuses some of their discovery obligations.
For the reasons discussed below, none of these justifications excuses
Defendants’ failure to comply with Plaintiff’s discovery requests
relating to Speaking Rock and the electronic bingo machines.
II.

DISCUSSION
“[A] district court has broad discretion in all discovery matters

. . . .” Boudreaux v. Swift Transp. Co., 402 F.3d 536, 545 (5th Cir.
2005). Federal Rule of Civil Procedure 37 “empowers the court to
compel the production of documents and complete responses to
interrogatories upon motion by the party seeking discovery.” Exp.
Worldwide, Ltd. v. Knight, 241 F.R.D. 259, 263 (W.D. Tex. 2006). The
party resisting discovery must show specifically how each discovery
request is not relevant or otherwise objectionable. See McLeod,
Alexander, Powel & Apffel, P.C. v. Quarles, 894 F.2d 1482, 1485 (5th
Cir. 1990).
Defendants have taken the position throughout this litigation that
the various offerings at Speaking Rock Casino are entirely consistent
with Texas law and, thus, that the operation of Speaking Rock is
federally authorized pursuant to the Restoration Act. See, e.g., Rule
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26(f) Joint Case Management Report 2, Oct. 30, 2017, ECF No. 34.
Specifically, Defendants have argued that their electronic bingo
machines do not violate Texas law and have represented that the
“mechanics of the card minder . . . can be demonstrated by the Pueblo
Defendants” or “determined by Plaintiff [if it] engage[s] in even
rudimentary discovery.” Defs.’ Resp. in Opposition to Pl.’s Appl. Prelim.
Inj., Sept. 12, 2017, ECF No. 17. The Court denied a preliminary
injunction partially in reliance on Defendants’ claim that Plaintiff
would be able to develop more fully its theory of illegality through
discovery. Using interrogatories and requests for production, Plaintiff
has sought discovery consistent with Defendants’ initial invitation.
However, for reasons that remain unclear, Defendants appear to be
trying vigorously to thwart Plaintiff’s efforts. This behavior is not
consistent with Defendants’ position that they are engaged in lawful
activity.
Instead, based on the evidence provided in Plaintiff’s Motion to
Compel and Defendants’ lack of a meaningful rejoinder, it appears that
Defendants’ are engaged in dilatory tactics. Defendants’ refusal to
comply with Plaintiff’s discovery requests wastes the Court’s resources,
is unfair to Plaintiff, and is contrary to Federal Rule of Civil Procedure
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1, which encourages the parties to “secure the just, speedy, and
inexpensive determination of every action and proceeding.” While
Defendants may have succeeded in extending this litigation further,
they jeopardize their credibility with the Court. With that conclusion in
mind, the Court turns to Defendants’ excuses for failing to provide
Plaintiff with proper discovery.
A.

Third-Party Vendors

Regarding third-party vendors, Defendants assert that they
“contracted with various vendors to have the bingo cardminder[s] at
Speaking Rock designed to fully comply with [the] Restoration Act” and
that “the vendors that designed the . . . bingo cardminders have
retained that information as proprietary.” Resp. 4. However,
Defendants have provided no indication of what companies or entities
they contracted with, which would allow Plaintiff to seek out this
information from the companies itself. Further, Defendants have no
authority to discourage or prohibit Plaintiff from seeking information
from a third-party by opining that the information is “proprietary.” No
evidence is offered that the third parties have made such claims.
Finally, if Defendants carefully worked with these companies to develop
the machines in compliance with the Restoration Act, as they claim,
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there would presumably be extensive correspondence regarding
guidance and oversight of the manufacturing, delivery, and
maintenance of the machines. Defendants have apparently not
provided any such documents or explained their whereabouts.
Accordingly, the Court concludes that Defendants must disclose all
relevant companies who might retain information about the machines
at issue at Speaking Rock. Also, pursuant to Plaintiff’s inquiries,
Defendants must disclose all documents they possess (either actually or
constructively through a related entity) related to the hardware,
mechanics, or software used in these machines.
B.

The Ysleta del Sur Fraternal Organization

Defendants object to many of Plaintiff’s discovery requests by
asserting that the “the Fraternal Organization is a separate entity that
needs to be served individually in order to obtain those documents
which are solely in the Fraternal Organization’s possession, custody, or
control.”2 Resp. 5. This objection is without merit. Federal Rule of

There are multiple indications that this position is part of a strategy
designed to prevent Plaintiff from obtaining discovery. First, as
discussed further infra, Defendants occupy multiple important positions
in the Fraternal Organization and should have access to the operational
documents Plaintiff seeks. Yet, Defendants have offered no assistance
in obtaining the documents. Second, Defendants are well aware of the
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Civil Procedure 34 allows parties in discovery to request documents
within the responding party’s “possession, custody, or control.” “Rule 34
is broadly construed and documents within a party’s control are subject
to discovery, even if owned by a nonparty.” Mir v. L-3 Commc’ns
Integrated Sys., L.P., 319 F.R.D. 220, 230 (N.D. Tex. 2016). “Control” of
documents includes both actual possession and the “legal right or
practical ability to obtain the documents from a nonparty in the action.”
Edwards v. City of Bossier City, No. CV 15-1822, 2016 WL 3951216, at
*3 (W.D. La. July 20, 2016); cf. Uniden Am. Corp. v. Ericsson Inc., 181
F.R.D. 302, 305 (M.D.N.C. 1998) (“[A] litigating parent corporation has

predicament Plaintiff now faces in obtaining discovery. Defendants
claim that the Fraternal Organization possesses all of the Speaking
Rock operational and electronic bingo documents. However, it has
become clear that the Fraternal Organization asserts sovereign
immunity and refuses to accept third-party subpoenas for those
documents. Thus, Plaintiff is unable to gain access to them. Through
selective disclosure of information, Defendants waited until deep into
the discovery period to reveal this predicament to Plaintiff. Defense
counsel, who represents both Defendants and the Fraternal
Organization, knew or should have known of this predicament back in
December when the discovery requests were initially served. However,
despite having knowledge of it through their counsel, Defendants made
no effort to warn Plaintiff of this issue that would ultimately become an
impasse in discovery. Instead, they waited until well into the discovery
process to let the situation unfold, presumably hoping that the
discovery period would end before the situation could be resolved. This
indicates a reluctance on Defendants’ part to operate in good faith with
Plaintiff.
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control over documents in the physical possession of its subsidiary
corporation where the subsidiary is wholly owned or controlled by the
parent.”) (alteration in original) (quoting American Angus Ass’n v. Sysco
Corp., 158 F.R.D. 372, 375 (W.D.N.C.1994)).
Here, it is apparent that Defendants have both the legal right and
practical ability to obtain the documents Plaintiff seeks. First, the
Fraternal Organization’s federal charter of incorporation states that the
corporation is “wholly controlled by the Ysleta del Sur Pueblo.” Mot Ex.
9 at YDSP-000002. This may be enough by itself to give Defendants the
legal right to access the corporation’s documents. See Uniden, 181
F.R.D. at 305. Regardless, Defendants also admit that Carlos Hisa, a
defendant in this litigation and the Tribal Governor of the Ysleta del
Sur Pueblo, is the President of the Fraternal Organization. Mot. Ex. 4
at 13. Defendants have not explained why Hisa, as President, does not
have access to the Speaking Rock operational documents. Moreover,
the charter of incorporation provides that the Tribe (a party in this
litigation) and its members are collectively the sole stakeholder of the
corporation. Id. The Ysleta del Sur Tribal Council (also a party to this
litigation) serves as the “representative of the Stakeholder, and all
rights of the Stakeholder shall be exercised by the Ysleta del Sur Tribal
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Council.” Id. The Fraternal Organization is required to make its
“financial and operating records” available to inspection by the Council.
Id. at YDSP-000010. Thus, Carlos Hisa, the Tribe, and the Tribal
Council all retain the legal and practical ability to obtain the documents
Plaintiff seeks. Accordingly, the Court finds no persuasive reason why
Defendants cannot produce the documents that they claim the
Fraternal Organization possesses exclusively.
C.

Relevance

Defendants further argue that “much of the information sought by
many of the Plaintiff’s Requests for Production is not relevant to the
subject matter of this litigation.” Resp. 5. Specifically, they take issue
with Plaintiff’s requests for financial information regarding Speaking
Rock because this information is not relevant to prove the elements of
Texas Penal Code § 47, which prohibits gambling. Resp. 6. However,
Defendants claim to be offering charitable bingo at Speaking Rock.
While technically considered gambling in a broad sense, charitable
bingo is legal pursuant to Texas law and does not constitute a violation
of Texas Penal Code § 47. Thus, the question in this case is whether
Defendants’ activities constitute bingo and whether they fall within the
scope of activity permitted by Texas law. Answering that question
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requires multiple pieces of information, including whether Defendants
(or the Fraternal Organization) properly constitute a charity. Order 36,
March 29, 2018, ECF No. 77. To comply with Texas’s bingo
requirements, an “authorized organization shall devote to charitable
purposes of the organization its net proceeds of bingo and any rental of
the premises.” Tex. Occ. Code Ann. § 2001.454. Thus, information
about proceeds from Speaking Rock and the recipient of those funds is
relevant to determining the legality of Defendants’ activities.3
Therefore, Defendants must produce all financial documents related to
the operation of Speaking Rock that are responsive to Plaintiff’s
requests.
D.

Pending Motion to Dismiss

Finally, Defendants claimed in their initial discovery responses
that they would produce relevant information once the Court ruled on
their then-pending motion to dismiss. After the Court ruled on that
Because the State of Texas has no regulatory jurisdiction over
Defendants, the Court is mindful that Defendants may not be subject to
the exact same rules as other charitable bingo operations in the State.
Specifically, it is unlikely that any Texas regulatory requirements for
charitable bingo apply to Defendants. However, Defendants have not
yet attempted to explain which specific rules or laws they believe are
applicable and which are not. Thus, for purposes of discovery, the
Court assumes that information regarding noncompliance with any
laws is relevant and discoverable.
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initial motion, Defendants immediately filed another motion to dismiss.
It is unclear to what extent Defendants are still withholding documents
in anticipation of a ruling on their currently pending motion. However,
“[d]iscovery need not cease during the pendency of a motion to
dismiss . . . .” SK Hand Tool Corp. v. Dresser Indus., Inc., 852 F.2d 936,
945 (7th Cir. 1988); see also Levin v. Miller, No. 1:11-CV-1264-SEBTAB, 2012 WL 12871191, at *1 (S.D. Ind. May 24, 2012) (“[T]he mere
filing of a motion to dismiss does not necessarily mean that discovery—
and the case itself—should grind to a halt.”). While a district court has
discretion to stay discovery pending its decision on a motion to dismiss,
Defendants never requested such a stay, and may not unilaterally
impose a stay without the Court’s permission. Accordingly, the
Defendants cannot use the pendency of their motion to dismiss as a
justification for withholding discovery. To the extent that Defendants
are currently withholding information or documents responsive to
Plaintiff’s discovery requests due to a pending motion to dismiss,
Defendants must divulge that information and produce those
documents.

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III. CONCLUSION
Accordingly, IT IS ORDERED that Plaintiff State of Texas’s
“Motion to Compel Responses to Interrogatories and Requests for
Production” (ECF No. 85) is GRANTED.
IT IS FURTHER ORDERED that Defendants Ysleta del Sur
Pueblo, the Tribal Counsel, and the Tribal Governor Carlos Hisa,
RESPOND to Plaintiff’s discovery requests relating to operations at
Speaking Rock and the functionality of the electronic bingo machines on
or before June 6, 2018.
IT IS FURTHER ORDERED that Defendants Ysleta del Sur
Pueblo, the Tribal Counsel, and the Tribal Governor Carlos Hisa must
produce all documents that are in the actual possession of the Fraternal
Organization that are responsive to Plaintiff’s discovery requests
relating to operations at Speaking Rock and the functionality of the
electronic bingo machines.
IT IS FURTHER ORDERED that all discovery-related
deadlines, including the dispositive motion deadline, are hereby
EXTENDED an additional THIRTY (30) DAYS to allow both parties
to comply with the provisions of this Order.

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IT IS FURTHER ORDERED that Defendants Ysleta del Sur
Pueblo, the Tribal Counsel, and the Tribal Governor Carlos Hisa’s
failure to comply with the Court’s order may result in appropriate
sanctions.
IT IS FINALLY ORDERED that Plaintiff’s “Motion for
Authorization of Service” (ECF No. 89) is MOOT based on Plaintiff’s
indication at May 15, 2018 docket call that it would no longer pursue
this motion if the Court granted its Motion to Compel.
SIGNED this 23rd day of May, 2018.
_________________________________
PHILIP R. MARTINEZ
UNITED STATES DISTRICT JUDGE

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