Shoshone-Bannock Tribes v. Vanir Constr. Mgmt.

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SHOSHONE-BANNOCK TRIBES, and FORT HALL BUSINESS COUNCIL, Plaintiffs, v. VANIR CONSTRUCTION MANAGEMENT, INC., Defendant.

No. 4:23-cv-00160-REP

United States District Court, D. Idaho

July 24, 2023

MEMORANDUM DECISION AND ORDER ON PLAINTIFFS' MOTION FOR REMAND

(DKT. 7)

Before the Court is Plaintiffs Shoshone-Bannock Tribes and Fort Hall Business Council's Motion for Remand (Dkt. 7). All parties have consented to the exercise of jurisdiction by a United States Magistrate Judge. (Dkt. 18). Having reviewed the parties' briefing, heard oral argument on the Motion and otherwise being fully advised, the Court issues the following order.

BACKGROUND

This is a breach of contract action. In 2015, Defendant and Plaintiffs executed an agreement for Defendant to oversee the design and construction of a casino expansion project within the boundaries of the Fort Hall Reservation. Compl. ¶ 8 (Dkt. 1-2).^[1] That contract contained a clause placing exclusive jurisdiction over all disputes arising from the contract in the Shoshone-Bannock Tribal Court. Contract § 14.3 (Dkt. 1-7). Further, the contract disclaimed any waiver of tribal sovereign immunity. Id. § 14.2.

Pursuant to the contract, Defendant acted as Plaintiff's owner-representative during the design and construction process of “phase II” of the on-reservation casino expansion project. Compl. ¶ 9 (Dkt. 1-2). Suffice to say, the project was plagued with difficulties. Id. ¶¶ 10-14. Relevant here, significant disputes arose between Defendant and the project's general contractor, Ormund Builders, Inc. (“OBI”). Id. ¶ 14. These disputes culminated in Defendant recommending that Plaintiffs terminate OBI, which they did in April of 2018. Id. ¶ 15. Around that same time, OBI filed three arbitration demands against Plaintiffs relating to Defendant's alleged mismanagement of the project. Id. ¶¶ 17-18. The arbitration panel eventually found in OBI's favor, awarding it $2,937,622.42 against Plaintiffs on October 30, 2019. Id. ¶ 19.

In December 2019, the parties amended the contract (“Amendment 8” or “the Amendment”) to remove Plaintiffs and substitute the Shoshone-Bannock Tribal Attorney's Office (“TAO”) as a party to the contract. Amendment 8 (Dkt. 6-16). Amendment 8 indicated that it was effective as of the date signed - December 9, 2019 - but that “all terms and conditions of the Agreement including any prior amendments . . . shall remain in full force and effect.” Id.

Plaintiffs subsequently filed a complaint against Defendant in Shoshone-Bannock Tribal Court in May of 2020, seeking to recover damages allegedly caused by Defendant's negligence and breach of the underlying contract for construction management services. Id. ¶ 24. However, the parties agreed to voluntarily dismiss the lawsuit to participate in non-binding mediation. Id. When mediation failed, Plaintiffs refiled this lawsuit in tribal court on February 27, 2023. Id. Defendant was served with the Complaint on March 2, 2023, and moved to dismiss in tribal court on March 27, 2023. Dec. of Service (Dkt. 8-1); Mot. to Dismiss (Dkt. 3).

Defendant then filed a Notice of Removal with this Court on April 7 2023. NOR (Dkt. 1). Defendant alleges that removal is proper because this Court has diversity jurisdiction under 28 U.S.C. § 1332. Id. ¶ 4. Shortly after removing this action, Defendant renewed its Motion to Dismiss (Dkt. 3) and filed a Motion to Disqualify Counsel (Dkt. 6). Plaintiffs then filed a timely Motion for Remand and requested that their responses to Defendant's Motions be stayed until the Court resolved the jurisdictional issue of remand. Mot. for Remand at 11-12 (Dkt. 7). The Court granted that request on May 11, 2023. (Dkt. 14). The Court heard oral argument on the Motion for Remand on July 18, 2018. (Dkt. 19).

LEGAL STANDARD

Section 1441(a) of Title 28 provides: “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a) (“the removal statute” or “§ 1441”). The removal statute is strictly construed against removal and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper.” Id. (citing Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n.12 (9th Cir. 1990)).

DISCUSSION

Plaintiffs argue that this matter should be remanded to Tribal Court for four reasons: (i) the removal statute does not apply to civil actions brought in tribal court; (ii) even if the action could be removed, Defendant did not timely do so; (iii) this Court lacks jurisdiction over Plaintiffs because of tribal sovereign immunity; and (iv) notwithstanding any of the above, longstanding principles of comity require Defendant to exhaust its remedies in tribal court before challenging tribal jurisdiction here. Mot. for Remand at 1 (Dkt. 7). Defendant's Response by- and-large relies on Amendment 8, arguing that removal is proper because (i) Plaintiffs are not the real parties in interest, (ii) the TAO is the real party in interest, and (iii) because the TAO is not an arm of the tribe, the tribal court lacks jurisdiction. Mem. in Opp'n to Mot. for Remand at 2 (Dkt. 16).

A. The removal statute is inapplicable to civil actions initiated in tribal courts.

The power of removal is purely statutory. Bundy v. St. Lukes Health Sys. Ltd., Case No. 1:23-cv-00212-DCN, 2023 WL 3572315, at *2 (D. Idaho May 19, 2023). Therefore, the “scope and terms” of removal are “entirely dependent” on the language of the statute being invoked to remove the case. Id. Here, Defendant seeks to remove this action under § 1441.^[2] NOR (Dkt. 1). In pertinent part, the removal statute states that “any civil action brought in a State court” may be removed to federal district court. 28 U.S.C. § 1441(a) (emphasis added). The plain language of the removal statute, then, does not reference tribal courts. Nor does the legislative history of the statute. See H.R. REP. NO. 80-308, at 133-34 (1947); H.R. REP. NO. 79-2646, at 128-29 (1946).

Defendant cites no case - and the Court has found none - in which a court has held that an action was removable from a tribal court under § 1441. Indeed, although not many courts have addressed the question, those that have uniformly hold that actions initiated in tribal court are not within the ambit of the removal statute. See, e.g., Williams-Willis v. Carmel Fin. Corp., 139 F.Supp.2d 773, 775-76 (S.D.Miss. 2001) (collecting cases and law review articles); accord Becenti v. Vigil, 902 F.2d 777, 780 (10th Cir. 1990) (holding that “State court” as that term is used in 28 U.S.C. § 1442, a removal statute similar to § 1441, did not include an action commenced in tribal court). The Court will not stray from settled law in this field and joins other courts in holding that the plain language of § 1441 does not allow removal of civil actions from tribal courts. See Williams-Willis, 139 F.Supp.2d at 775-76; Weso v. Menominee Indian Sch. Dist., 915 F.Supp. 73, 76 (E.D. Wis. 1995); Gourneau v. Love, 915 F.Supp. 150, 152-53 (D.N.D. 1994); White Tail Prudential Ins. Co. of Am., 915 F.Supp. 153, 154-55 (D.N.D. 1995); see also Philip Morris USA, Inc. v. King Mountain Tobacco Co., 569 F.3d 932, 939 (9th Cir. 2009) (explaining that “the federal removal statute d[oes] not provide for removal from tribal court”).

Defendant offers only one argument to rebut this conclusion, contending that § 1441 implicitly allows removal from tribal courts.^[3] Mem. in Opp'n to Mot. for Remand at 14-15 (Dkt. 16). Defendant relies on El Paso Natural Gas v. Neztsosie, 526 U.S. 473 (1999) for this novel argument. In El Paso, two members of the Navajo Nation sued various energy companies in Navajo tribal court, raising tort claims related to uranium mining on the Navajo Reservation. 526 U.S. at 477-78. The energy companies moved to enjoin the tribal court proceedings in the United States District Court for the District of Arizona. Id. at 478. They argued that the tribal court lacked jurisdiction because the plaintiffs' claims were governed by a unique federal law, the Price-Anderson Act, which controlled “public liability actions” relating to “nuclear incidents.” Id. The district court denied the energy companies' request for a preliminary injunction. Id. It reasoned that the companies were required to exhaust their tribal remedies before seeking relief in federal court and that the question of whether the Price-Anderson Act applied to the plaintiffs' claims should be reserved for the tribal court in the first instance.^[4] Id.

The Supreme Court ultimately reversed, holding that the tribal exhaustion doctrine did not apply to the defendants' jurisdictional challenges. Id. at 483-84. The Court looked to various provisions of the Price-Anderson Act including a provision that allowed removal from state courts, and reasoned that “Congress . . . expressed an unmistakable preference for a federal forum, at the behest of the defending party, both for litigating a Price-Anderson claim on the merits and for determining whether a claim falls under Price-Anderson when removal is contested.” Id. at 484-85. Finding that comity principles underlying the tribal exhaustion doctrine were overridden by the clear congressional intent to consolidate liability claims relating to nuclear incidents in federal court, the Court held that the district court should have decided whether the...