MMMG, LLC v. Seminole Tribe of Fla., Inc.

196 So.3d 438

MMMG, LLC and Mobile Mike Promotions, Inc., Appellants,

v.SEMINOLE TRIBE OF FLORIDA, INC., d/b/a Tribe, Inc., Tony Sanchez, Jr., individually, Larry Howard, individually, Sally Tommie, individually, Andrew Bowers, individually, Mike Ulizio, individually, Steven Osceola, individually and Chris Osceola, individually, Appellees.

No. 4D15–235.

District Court of Appeal of Florida, Fourth District.

June 15, 2016.

Gary S. Phillips and Jeffrey B. Shalek of Phillips, Cantor, Shalek, Rubin & Pfister, P.A., Hollywood, for appellant.

Edward G. Guedes and Alicia H. Welch of Weiss Serota Helfman Cole & Bierman, P.L., Coral Gables for appellee, Seminole Tribe of Florida, Inc. d/b/a Tribe, Inc.

GROSS, J.

MMMG, LLC and Mobile Mike Promotions, Inc. appeal the involuntary dismissal of their complaint against a federal tribal corporation affiliated with the Seminole Tribe. We affirm the dismissal because the tribal corporation enjoyed sovereign immunity from suit, which was not effectively waived according to the procedure required in the corporation's charter and bylaws.

Given the long history of exploitation of Native Americans, Congress has enacted statutes designed to protect tribes and tribal corporations. These statutes have been construed by federal and Florida courts as placing the onus on the non-tribal party to ensure that any waiver of sovereign immunity be executed in strict compliance with applicable tribal operating documents; common law doctrines such as apparent authority do not override the protection provided by federal law.

The History Between Mobile Mike and The Seminole Tribe of Florida, Inc.

Mobile Mike, a South Florida radio personality, owns Mobile Mike Promotions, Inc. (the “Production Company”). In 2011, the Production Company and the Seminole Tribe of Florida, Inc. (“STOFI”), a corporate entity of the Seminole Tribe (the “Tribe”), entered into an advertising joint venture called MMMG, LLC (the “Joint Venture”). STOFI later broke the Joint Venture agreement. The Production Company and the Joint Venture together filed a ten-count complaint against STOFI and other tribal members individually (collectively the “Defendants”). STOFI moved to dismiss, asserting the trial court lacked jurisdiction due to STOFI's sovereign immunity. After a five-day evidentiary hearing, the trial court found that STOFI was protected by sovereign immunity, which it had not waived pursuant to STOFI's charter and bylaws, and dismissed STOFI as a party.

The Seminole Tribe and STOFI

The Tribe is a federally recognized Native American tribe governed by a Tribal Council, which is duly chartered and recognized by the U.S. Department of the Interior, pursuant to section 16¹ of the Indian Reorganization Act of 1934 (“the Act”).² STOFI is a tribal corporation, also chartered and approved by the U.S. Department of the Interior, pursuant to section 17 of the Act.³ STOFI's purpose is to engage in commercial enterprises for the economic betterment of its tribal members. However, STOFI has no control over any aspect of the Tribe's other endeavors, including Seminole Gaming, the Tribe's gaming operations.

STOFI's ownership is vested in the approximately 4,000 registered members of the Tribe and a board of directors controls its operations. With respect to STOFI's sovereign immunity, STOFI's Charter had previously contained “sue and be sued” language which was removed in 1996 and replaced with Article VI, Section 9, which allows a waiver of STOFI's

sovereign immunity from suit, but only if expressly stated by contract that such is the case and that such waiver shall not be deemed a consent by the said corporation or the United States to the levy of any judgment, lien or attachment upon the property of [STOFI], other than income or chattels especially pledged or assigned pursuant to such contract.

Pursuant to STOFI's Bylaws, any delegation of authority to an officer, such as waiving sovereign immunity, must be effected by a written Board resolution and must specify the nature of the authority granted and any imposed limitations. Additionally, in matters that have not been specifically ordered by the Board, the president should call these matters to the Board's attention so that it has the opportunity to decide the issues, set the policy, or establish the procedure the corporation is to follow.

While the Tribe and its Council are a separate entity from STOFI, the rules governing how the Tribe waives sovereign immunity are relevant to issues raised in this appeal. The Tribe enacted a 1995 Ordinance addressing how immunity could lawfully be waived on behalf of the Tribe and “its subordinate economic and governmental units, its tribal officials, employees and authorized agents.” To waive immunity, the Ordinance requires clear, express and unequivocal consent by the Tribe or the United States Congress. While STOFI does not claim on appeal that the Ordinance applies to STOFI's process for waiving sovereign immunity, it would apply to any waiver on the part of the Tribe or Seminole Gaming, and the contract at issue purports to grant rights belonging to those entities.

The Joint Venture

In late 2011, STOFI entered into a non-binding Letter of Intent with the Production Company to create the Joint Venture, which would provide promotional, advertising, and marketing services. Although STOFI did not have authority to contract for advertising rights with respect to the Tribe or Seminole Gaming, STOFI did agree to make a good faith effort to have the Joint Venture designated as the agency of record not just for STOFI but also, subject to the Tribe's approval, the Tribe and “all other Seminole related entities.” The Letter of Intent would be reduced to a “Definitive Agreement” after approval was obtained from STOFI's Board. The Agreement would be governed by the laws of the State of Florida and the venue would be in Broward County, Florida. The Letter of Intent was signed by STOFI's board president and Mobile Mike.

The Board passed a resolution in December 2011, which ratified the Letter of Intent. The resolution states the purpose of the Joint Venture is to provide promotional activities “to Tribal entities and events as well as to parties not affiliated with [STOFI].” The resolution reiterated the Letter of Intent's essential terms and stated that STOFI's “sole financial exposure will be to contribute the organizational expenses of the venture.” STOFI's president was authorized to take all necessary steps to execute the Definitive Agreement.

Neither the Letter of Intent nor the Board's Resolution addressed waiver of sovereign immunity.

In January 2012, the Production Company and STOFI entered into a Regulations and Operating Agreement for the Joint Venture, which was signed by STOFI's president and Mobile Mike. Article VIII, Section 1 of the Agreement is the only provision relevant to this appeal. It confirms that the Operating Agreement is governed by the laws of the State of Florida, without regard to conflict of law principles.

The parties submitted two different versions of the Agreement to the trial court. Mobile Mike's version states that “[t]he parties waive any rights pursuant to any available sovereign or governmental immunity.” STOFI's version contained no such immunity waiver.

The Complaint

Mobile Mike, on behalf of the Production Company and the Joint Venture, filed a ten-count complaint against STOFI and individual tribal members involved with the Agreement, asking for injunctive relief and damages.

Mobile Mike claimed to have invested hundreds of thousands of dollars into the Joint Venture. By July 2012, Mobile Mike asserted that STOFI, the Tribe, and Seminole Gaming had ceased sending work to the Joint Venture, diverting the work to a tribal member who owned a competing advertising agency. No further payments pursuant to the Operating Agreement were made to the Joint Venture and in June 2013 Mobile Mike was officially “advised” that the Operating Agreement would not be honored.

The Motion to Dismiss

The Defendants moved to dismiss the complaint for lack of subject matter jurisdiction, asserting the claims were barred by sovereign immunity, pursuant to section 17 of the Act. According to the motion, the sovereign immunity waiver found in Mobile Mike's version of the Operating Agreement was a “single boilerplate sentence that Mobile Mike fraudulently introduced into the Agreement after execution and without STOFI's or [the president's] knowledge.”

In the alternative, the motion contended that any waiver of immunity was “unauthorized and ineffectual” because the Board had not expressly waived immunity. The motion pointed out that during the current president's tenure, STOFI had never waived immunity in connection with any commercial dealing without a Board resolution, which must be enacted at a public Board meeting and specify the nature and scope of the waiver. The motion claimed the Board did not authorize the president to execute an agreement waiving immunity.

Motion to Dismiss Hearing and Circuit Court Order

A five-day evidentiary hearing was held on STOFI's Motion to Dismiss. Much of the testimony focused on which version of the Operating Agreement was authentic. This testimony is largely irrelevant to this appeal because the trial court treated Mobile Mike's version of the Operating Agreement as true. The trial court decided the case as a matter of law, focusing on whether the waiver in Mobile Mike's version was sufficient to eliminate STOFI's sovereign immunity.

The trial court issued an extensive order granting in part STOFI's motion to dismiss. The order noted that the trial court could properly consider evidence outside the four corners of the complaint when considering a motion to dismiss on sovereign immunity grounds. As conclusions of fact, the trial court found that STOFI's Charter and Bylaws provide that the Board alone can waive sovereign immunity and the president does not have authority to waive [immunity], absent explicit authorization...