Wells Fargo Bank, National Association v. Lake of the Torches Economic Development Corporation

Filing 75

ORDER granting 50 Motion to Amend Complaint. On or before 12/2/2011, Wells Fargo should file an amended complaint that is consistent with the mandate of the Seventh Circuit. The Court must resolve the issues of standing and waiver before this matte r can proceed to the merits. The parties should confer and submit a proposed briefing schedule for the resolution of these issues. If the parties cannot come to an agreement, the parties may file separate position statements on how they wish to proceed. These submissions should be filed on or before 12/09/2011. Signed by District Judge Rudolph T. Randa on 11/22/2011. (Koll, Jacki)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WISCONSIN

WELLS FARGO BANK, N.A.,
as Trustee,
Plaintiff,
Case No. 09-CV-768
-vsLAKE OF THE TORCHES ECONOMIC
DEVELOPMENT CORPORATION,
Defendant.

DECISION AND ORDER

This matter comes before the Court on remand from the Seventh Circuit. On appeal,
the Seventh Circuit upheld the Court’s determination that the trust indenture “constitutes an
unapproved management contract within the meaning of the [Indian Gaming Regulation Act]
and is therefore void. Consequently, Lake of the Torches’ waiver of sovereign immunity
contained in that document is also void and cannot serve as a predicate for the district court’s
jurisdiction.” Wells Fargo v. Lake of the Torches, 658 F.3d 684, 685 (7th Cir. 2011).
However, the Seventh Circuit also held that the Court “should have permitted Wells Fargo
leave to file an amended complaint to the extent that it presented claims for legal and
equitable relief in connection with the bond transaction on its own behalf and on behalf of
the bondholder.” Id. at 702. Therefore, Wells Fargo’s motion for leave to file an amended
complaint [D. 50] is GRANTED. On or before December 2, 2011, Wells Fargo should file
an amended complaint that is consistent with the mandate of the Seventh Circuit.

The Seventh Circuit further held that upon the filing of an amended complaint, “the
district court should address the issue of whether, now that the Indenture has been
determined to be void, Wells Fargo has standing to litigate claims on behalf of the
bondholder. The court also must determine whether the collateral documents, when read
separately or together, waive the sovereign immunity of the Corporation with respect to any
such claims. If such a waiver is found, the court may proceed to determine the merits of
those claims.” Wells Fargo at 702. Accordingly, the Court must resolve the issues of
standing and waiver before this matter can proceed to the merits. The parties should confer
and submit a proposed briefing schedule for the resolution of these issues. If the parties
cannot come to an agreement, the parties may file separate position statements on how they
wish to proceed. These submissions should be filed on or before December 9, 2011.
Dated at Milwaukee, Wisconsin, this 22nd day of November, 2011.
BY THE COURT:

__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge

-2-