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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1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 WILMINGTON SAVINGS FUND SOCIETY, 10 Plaintiff, 11 12 ORDER GRANTING TULALIP TRIBES’ MOTION TO DISMISS v. COREY FRYBERG, et al., 13 Case No. C17-1196RSL Defendants. 14 15 16 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 18 memoranda submitted by the parties and the remainder of the record, the Court finds as 19 20 follows: 21 22 BACKGROUND Plaintiff Wilmington Savings Fund Society brings this foreclosure action against 23 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 26 27 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 1 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 3 provide the citizenship of the parties to establish diversity jurisdiction. Dkt. # 6. On 4 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 7 Tribes moves to dismiss the case pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject 8 9 matter jurisdiction. 10 11 12 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 15 lack of jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure. . . . Once 16 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 19 citations and quotations omitted). Here, the Tulalip Tribes argues that dismissal is 20 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 23 arguments below. 24 A. Diversity Jurisdiction 25 26 27 28 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 3 Tulalip Tribes is not a foreign state. See Stock West, Inc. v. Confederated Tribes of the 4 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 7 Tribes is a “citizen” of Washington state within the meaning of § 1332. 1 8 The Ninth Circuit recognizes that “unincorporated Indian tribes cannot sue or be 9 10 sued in diversity because they are not citizens of any state.” Am. Vantage Cos. v. Table 11 Mountain Rancheria, 292 F.3d 1091, 1095 (9th Cir. 2002); see also Cohen’s Handbook of 12 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 15 subject matter jurisdiction. 2 To hold otherwise would not accord with the Tulalip Tribes’ 16 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 19 Tribe, 498 U.S. 505, 509 (1991). 20 B. Sovereign Immunity 21 22 23 24 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 25 26 27 1 Except for defendant Tulalip Tribes, there appears to be complete diversity between the parties. See Dkt. # 8 ⁋⁋ 1.2-2.5. 2 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 3 States v. Lara, 541 U.S. 193 (2004)). “The common law sovereign immunity possessed 4 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 7 (1986). “As a matter of federal law, an Indian tribe is subject to suit only where Congress 8 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 11 be implied but must be unequivocally expressed.” Santa Clara Pueblo v. Martinez, 436 12 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 15 subject matter jurisdiction has the burden of proving its existence, i.e. that immunity does 16 17 not bar the suit.” Pistor v. Garcia, 791 F.3d 1104, 1111 (9th Cir. 2015) (internal citations 18 and quotations omitted). 19 Plaintiff concedes that the Tulalip Tribes has not waived immunity. Dkt. # 21 at 2. 20 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 23 Tulalip Tribes is entitled to sovereign immunity. 24 C. Exhaustion 25 26 27 28 “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 3 quotations omitted). “Tribal courts play a vital role in tribal self-government, and the 4 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 7 requirement applies even if no tribal court proceedings are pending. Marceau, 540 F.3d at 8 9 921. 10 11 12 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 15 initial complaint seems to acknowledge the jurisdiction of the Tulalip Tribal Court. See 16 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 19 alleged that the exhaustion requirement is being asserted in bad faith or to harass. 4 Out of 20 21 22 23 24 25 26 3 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). 4 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 27 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 3 tribal remedies. 4 CONCLUSION 5 6 7 8 Each of defendant’s arguments independently supports dismissal: there is no complete diversity between the parties; the Tulalip Tribes is immune from suit; and 5 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. 11 12 13 DATED this 12th day of December, 2017. 14 15 16 17 18 19 A Robert S. Lasnik United States District Judge 20 21 22 23 24 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 27

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