Wilmington Savings Fund Society v. Fryberg et al

Filing 28

ORDER granting defendant Tulalip Tribes' 15 Motion to Dismiss. This case is DISMISSED. Signed by Judge Robert S. Lasnik. (PM)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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WILMINGTON SAVINGS FUND SOCIETY,

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Plaintiff,

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ORDER GRANTING
TULALIP TRIBES’
MOTION TO DISMISS

v.
COREY FRYBERG, et al.,

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Case No. C17-1196RSL

Defendants.

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This matter comes before the Court on “Defendant Tulalip Tribes’ Motion to

17 Dismiss for Lack of Subject Matter Jurisdiction.” Dkt. # 15. Having reviewed the
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memoranda submitted by the parties and the remainder of the record, the Court finds as

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BACKGROUND
Plaintiff Wilmington Savings Fund Society brings this foreclosure action against

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24 defendant Corey Fryberg. Corey Fryberg is a member of the Tulalip Tribes, a federally
25 recognized Indian tribe, and the property at issue is trust land within the Tulalip Indian
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Reservation. Dkt. # 8 ⁋⁋ 2.1, 3.2. The Tulalip Tribes is also a named defendant for having

28 a possible interest in the property.
ORDER GRANTING
TULALIP TRIBES’
MOTION TO DISMISS - 1

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Plaintiff’s initial complaint was filed on August 8, 2017. Dkt. # 1. On August 17,

2 2017, the Court sua sponte issued an Order to Show Cause for plaintiff’s failure to
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provide the citizenship of the parties to establish diversity jurisdiction. Dkt. # 6. On
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5 August 25, 2017, plaintiff filed an amended complaint (Dkt. # 8), and on September 28,
6 2017, the Court vacated the Order to Show Cause. Dkt. # 14. Now, defendant Tulalip
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Tribes moves to dismiss the case pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject
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9 matter jurisdiction.
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DISCUSSION
“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins.

13 Co. of Am., 511 U.S. 375, 377 (1994). “Unless the jurisdictional issue is inextricable
14 from the merits of a case, the court may determine jurisdiction on a motion to dismiss for
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lack of jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure. . . . Once
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17 challenged, the party asserting subject matter jurisdiction has the burden of proving its
18 existence.” Robinson v. United States, 586 F.3d 683, 685 (9th Cir. 2009) (internal
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citations and quotations omitted). Here, the Tulalip Tribes argues that dismissal is
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21 appropriate because diversity jurisdiction is lacking, the Tulalip Tribes is immune from
22 suit, and plaintiff failed to exhaust tribal remedies. The Court addresses each of these
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arguments below.
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A. Diversity Jurisdiction
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Plaintiff asserts that this Court has jurisdiction pursuant to 28 U.S.C. § 1332. The
diversity statute applies when the amount in controversy exceeds $75,000 and when the
ORDER GRANTING
TULALIP TRIBES’
MOTION TO DISMISS - 2

1 action is between “citizens of different States” or “citizens of a State and citizens or
2 subjects of a foreign state[.]” 28 U.S.C. § 1332(a)(1), (2). As a threshold matter, the
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Tulalip Tribes is not a foreign state. See Stock West, Inc. v. Confederated Tribes of the
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5 Colville Reservation, 873 F.2d 1221, 1226 (9th Cir. 1989) (citing Cherokee Nation v.
6 Georgia, 30 U.S. 1 (1831)). Therefore, diversity jurisdiction only exists if the Tulalip
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Tribes is a “citizen” of Washington state within the meaning of § 1332. 1
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The Ninth Circuit recognizes that “unincorporated Indian tribes cannot sue or be
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10 sued in diversity because they are not citizens of any state.” Am. Vantage Cos. v. Table
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Mountain Rancheria, 292 F.3d 1091, 1095 (9th Cir. 2002); see also Cohen’s Handbook of
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13 Federal Indian Law § 7.04 (2012 ed.). Because the Tulalip Tribes is not a citizen of
14 Washington or any other state, complete diversity is lacking, and this Court has no
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subject matter jurisdiction. 2 To hold otherwise would not accord with the Tulalip Tribes’
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17 status as a “domestic dependent nation” exercising inherent sovereign authority over
18 members and territories. See Okla. Tax Comm’n v. Citizen Band of Potawatomi Indian
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Tribe, 498 U.S. 505, 509 (1991).
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B. Sovereign Immunity
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The Tulalip Tribes also argues that plaintiff’s lawsuit is barred by tribal sovereign
immunity. The Tulalip Tribes possesses “inherent powers of a limited sovereignty which

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Except for defendant Tulalip Tribes, there appears to be complete diversity between the parties.
See Dkt. # 8 ⁋⁋ 1.2-2.5.

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Plaintiff’s amended complaint merely posits that “[o]n information and belief Tulalip Tribes of
28 Washington is a sovereign tribal nation located in Washington.” Dkt. # 8 ⁋ 2.5.
ORDER GRANTING
TULALIP TRIBES’
MOTION TO DISMISS - 3

1 has never been extinguished.” United States v. Wheeler, 435 U.S. 313, 322 (1978)
2 (internal citations and quotations omitted) (superseded by statute as recognized in United
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States v. Lara, 541 U.S. 193 (2004)). “The common law sovereign immunity possessed
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5 by the Tribe is a necessary corollary to Indian sovereignty and self-governance.” Three
6 Affiliated Tribes of the Fort Berthold Reservation v. Wold Eng’g, 476 U.S. 877, 890
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(1986). “As a matter of federal law, an Indian tribe is subject to suit only where Congress
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9 has authorized the suit or the tribe has waived its immunity.” Kiowa Tribe of Okla. v.
10 Mfg. Techs., Inc., 523 U.S. 751, 754 (1998). “[A] waiver of sovereign immunity cannot
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be implied but must be unequivocally expressed.” Santa Clara Pueblo v. Martinez, 436
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13 U.S. 49, 58 (1978) (internal citations and quotations omitted). “In the context of a Rule
14 12(b)(1) motion to dismiss on the basis of tribal sovereign immunity, the party asserting
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subject matter jurisdiction has the burden of proving its existence, i.e. that immunity does
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17 not bar the suit.” Pistor v. Garcia, 791 F.3d 1104, 1111 (9th Cir. 2015) (internal citations
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Plaintiff concedes that the Tulalip Tribes has not waived immunity. Dkt. # 21 at 2.
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21 Further, plaintiff does not point to any source indicating that Congress has authorized this
22 lawsuit against the Tulalip Tribes. Therefore, the Court lacks jurisdiction because the
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Tulalip Tribes is entitled to sovereign immunity.
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C. Exhaustion
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“Principles of comity require federal courts to dismiss or to abstain from deciding
claims over which tribal court jurisdiction is colorable, provided that there is no evidence
ORDER GRANTING
TULALIP TRIBES’
MOTION TO DISMISS - 4

1 of bad faith or harassment. Exhaustion of tribal remedies is mandatory.” Marceau v.
2 Blackfeet Hous. Auth., 540 F.3d 916, 920 (9th Cir. 2008) (internal citations and
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quotations omitted). “Tribal courts play a vital role in tribal self-government, and the
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5 Federal Government has consistently encouraged their development.” Iowa Mut. Ins. Co.
6 v. LaPlante, 480 U.S. 9, 14-15 (1987) (internal citations omitted). The exhaustion
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requirement applies even if no tribal court proceedings are pending. Marceau, 540 F.3d at
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The Tulalip Tribal Court meets the requirement of having colorable jurisdiction
over this action: defendant Corey Fryberg is a tribal member, the Tulalip Tribes is a

13 named party, and the land at issue lies within the Tulalip Indian Reservation and is held
14 in trust by the United States for the benefit of the Tulalip Tribes. 3 Further, plaintiff’s
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initial complaint seems to acknowledge the jurisdiction of the Tulalip Tribal Court. See
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17 Dkt. # 1 ⁋ 3.2 (“Normally, actions are to be commenced in Tulalip Tribal Court when the
18 subject property is located within Tulalip Indian Reservation[.]”). Plaintiff has not
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alleged that the exhaustion requirement is being asserted in bad faith or to harass. 4 Out of
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The Tulalip Tribal Court’s jurisdiction extends to “(a) all persons natural and legal of any kind
and to (b) all subject matters which, now and in the future, are permitted to be within the
jurisdiction of any Tribal Court of a sovereign Indian tribe or nation recognized by the United
States of America and to (c) all matters having to do with rights in or encumbrances to lands
within or without the Tulalip Indian Reservation held by the United States in trust for the Tulalip
Tribes or its members, in restricted fee by the Tulalip Tribes, or lands held in fee by members of
the Tulalip Tribes located within the Tulalip Reservation[.]” Tulalip Tribal Code Section
2.05.020(1).

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In addition to instances of bad faith and harassment, the Supreme Court has noted that
exhaustion of tribal remedies is also not required “where the action is patently violative of
28 express jurisdictional prohibitions, or where exhaustion would be futile because of the lack of an
ORDER GRANTING
TULALIP TRIBES’
MOTION TO DISMISS - 5

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1 respect for the Tulalip Tribes’ sovereignty, and recognizing the jurisdiction of the Tulalip
2 Tribal Court to adjudicate this dispute, the case is DISMISSED for failure to exhaust
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tribal remedies.
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CONCLUSION
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Each of defendant’s arguments independently supports dismissal: there is no
complete diversity between the parties; the Tulalip Tribes is immune from suit; and

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9 plaintiff failed to exhaust tribal remedies. For all of the foregoing reasons, defendant’s

10 motion (Dkt. # 15) is GRANTED. The case is DISMISSED.
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DATED this 12th day of December, 2017.

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A
Robert S. Lasnik
United States District Judge

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adequate opportunity to challenge the court’s jurisdiction.” Nat’l Farmers Union Ins. Cos. v.

25 Crow Tribe of Indians, 471 U.S. 845, 856 n.21 (1985). These exceptions do not apply.
26 5 Plaintiff suggests that to cure the issues related to diversity jurisdiction and tribal sovereign
immunity, the Court can simply dismiss the Tulalip Tribes as a party and let the action proceed.
Dkt. # 21 at 3. This does not resolve the issue of exhaustion of tribal remedies, however, and the
28 Court declines to adopt this suggestion.
ORDER GRANTING
TULALIP TRIBES’
MOTION TO DISMISS - 6

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