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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

WILLIAM CROSS, JR.,

Plaintiff

V C.A. No. 2:19cv11326-AJT-SDD

KEWADIN CASINOS GAMING

AUTHORITY, a political subdivision of HON. ARTHUR J. TARNOW

the SAULT STE. MARIE TRIBE OF

CHIPPEWA INDIANS, a/k/a MAG. JUDGE STEPHANIE

SAULT STE. MARIE TRIBAL DAWKINS DAVIS

GAMING AUTHORITY,

Defendant.

__________________________________/

MEMORANDUM OF LAW IN SUPPORT OF

DEFENDANT KEWADIN CASINOS GAMING AUTHORITY’S

MOTION TO DISMISS PLAINTIFF’S COMPLAINT

DIANE M. SOUBLY (P32005)

BUTZEL LONG, a professional corporation

Counsel for Defendant Kewadin Casinos

Gaming Commission

301 E. Liberty Street, Suite 500

Ann Arbor, MI 48104

T: (734) 213-3625

F: (734) 995-1777

[email protected]

Dated: May 7, 2019

Case 2:19-cv-11326-AJT-SDD ECF No. 2-1 filed 05/07/19 PageID.127 Page 1 of 35

mailto:[email protected]

i

STATEMENT OF ISSUES PRESENTED

1. Without waiving sovereign immunity, Defendant Kewadin Casinos Gaming

Authority (the “Authority”) contends that this Court has sufficient

jurisdiction to determine whether it should dismiss Plaintiff’s Complaint

with prejudice for want of subject matter jurisdiction, pursuant to Fed. R.

Civ. P. 12(b)(1), where the Complaint rests upon a purported contract

subject to federal law, i.e., in part the Indian Gaming Regulatory Act, 25

U.S.C. § 2701 et seq. (IGRA”), and the content of which is governed under

Tribe’s Gaming Ordinance, a tribal ordinance federally approved by the

National Indian Gaming Commission (“NIGC”) under IGRA, which

incorporates provisions of the Gaming Authority Charter and other tribal

ordinances.

2. Without waiving sovereign immunity, the Authority contends that this

Court should dismiss Plaintiff’s Complaint with prejudice for want of

subject matter jurisdiction, pursuant to Rule 12(b)(1) of the Federal Rules of

Civil Procedure, on any or all of the following separate and independent

grounds for holding that Plaintiff’s lawsuit is barred:

a) the subject contract contains an express and overriding reservation

of sovereign immunity of the Sault Ste. Marie Tribe of Chippewa


ii

Indians (the “Tribe”) and its governmental instrumentality, the

Authority;

b) the subject contract contains no clear and unequivocal waiver of

sovereign immunity or jurisdiction by the Boards of the Authority or

the Tribe, as required under federal and tribal law; and/or

c) the subject contract is clearly insufficient to waive sovereign

immunity or jurisdiction or venue because any purported waivers do

not comply with the required specifics for such waivers required

under tribal law or the manner in which such waivers are to be duly

adopted (by formal Board resolution), or the requirement that such

waivers must be attached to contracts in order to become a vested

contractual right.

3. Without waiving sovereign immunity, the Authority also contends that this

Court should dismiss Plaintiff’s Complaint with prejudice, pursuant to Rule

12(b)(6) of the Federal Rules of Civil Procedure, because it fails to state a

plausible claim for relief under the Twombly/Igbal standard.


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TABLE OF CONTENTS

STATEMENT OF ISSUES PRESENTED i

CONTROLLING OR SIGNIFICANT AUTHORITY v

TABLE OF AUTHORITIES vii

INTRODUCTION 1

I. STATEMENT OF FACTS 4

A. Plaintiff’s Complaint and Purported Contract 4

B. The Authority’s Oversight of Federally Regulated

Gaming Activities Consistent with Its Federally

Approved Charter and Tribal Ordinances 8

C. The Sole Contractual Section Plaintiff Identifies 9

D. Plaintiff’s Failure to Date, Initial, or Comply

With the Purported Contract 10

II. ARGUMENT 11

A. The Court Has Jurisdiction to Rule on the Motions 11

B. Separate and Independent Grounds Exist to Dismiss

the Complaint Pursuant to Rule 12(b)(1) 12

1. This Court May Construe the Gaming-Related Contract

As Invalid or Ineffective under Federal Law 14

2. This Court May, As a Matter of Law, Find the Lawsuit

Barred by an Ineffective Waiver of Tribal Sovereignty 16


iv

C. As A Separate and Independent Ground for Dismissal

Under Rule 12(b)(6), Plaintiff Fails to State a Plausible

Claim for Relief 21

CONCLUSION 25


v

CONTROLLING OR SIGNIFICANT AUTHORITY

Ashcroft v. Iqbal, 556 U.S. 662 (2009)

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007)

Bryan v. Itasca Cty., Minn., 426 U.S. 373 (1976)

California v. Cabazon Band of Mission Indians,

480 U.S. 202 (1987)

C & L Enterprises v. Citizen Band, Potawatomi Indian Tribe

of Okla., 532 U.S. 411 (2001)

Contour Spa at the Hard Rock, Inc. v. Seminole Tribe

of Florida, 692 F.3d 1200 (11th Cir. 2012)

Kiowa Tribe of Okla. v. Mfg. Techs., Inc.,

523 U.S. 751 (1998)

New Mexico v. Mescalero Apache Tribe,

462 U.S. 324 (1983)

Okla. Tax Comm’n v. Citizen Band of Potawatomi Indian Tribe

of Okla., 498 U.S. 505 (1991)

South Dakota v. Yankton Sioux Tribe, 522 U.S. 329 (1989)

United States v. Ruiz, 532 U.S. 622 (2002)

Chapter 42: Gaming Ordinance

Chapter 44: Waiver of Tribal Immunities Ordinance

Chapter 44: Waiver of Tribal Immunities Ordinance (2009)

Chapter 94: Gaming Authority Charter


vi

Indian Regulatory Gaming Act, 25 U.S.C. § 2701 et seq.

Fed. R. Civ. P. 12(b)(1)

Fed. R. Civ. P. 12(b)(6)


vii

TABLE OF AUTHORITIES

Cases:

Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio,

502 F.3d 545 (6th Cir. 2007) 21

Ashcroft v. Iqbal, 556 U.S. 662 (2009) 4, 22

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007) 4, 21

Bryan v. Itasca Cty., Minn., 426 U.S. 373 (1976) 18

California v. Cabazon Band of Mission Indians,

480 U.S. 202 (1987) 11-12, 14

Cartwright v. Garner, 751 F.3d 752 (6th Cir. 2014) 13

C & L Enterprises v. Citizen Band, Potawatomi Indian Tribe

of Okla., 532 U.S. 411 (2001) 19

Contour Spa at the Hard Rock, Inc. v. Seminole Tribe

of Florida, 692 F.3d 1200 (11th Cir. 2012) 18

Gentek Building Products, Inc. v. Sherwin Williams Co.,

491 F. 320 (6th Cir. 2007) 12

Kiowa Tribe of Okla. v. Mfg. Techs., Inc.,

523 U.S. 751 (1998) 17, 19

New England Health Care Employees Pension Fund

v. Ernst & Young, LLP, 336 F.3d 495 (6th Cir. 2003) 8

New Mexico v. Mescalero Apache Tribe,

462 U.S. 324 (1983) 14

Okla. Tax Comm’n v. Citizen Band of Potawatomi Indian Tribe

of Okla., 498 U.S. 505 (1991) 17, 19


viii

Palkow v. CSX Transp., Inc., 431 F.3d 543 (6th Cir. 2005) 12

Sam Han v. Univ. of Dayton, 541 F. App’x 622 (6th Cir. 2013) 21

South Dakota v. Yankton Sioux Tribe, 522 U.S. 329 (1989) 17

United States v. Ruiz, 532 U.S. 622 (2002) 11

Statutes:

Indian Regulatory Gaming Act, 25 U.S.C. § 2701 et seq. 1, 8, 11, 15

Tribal Law:

Chapter 42: Gaming Ordinance 8, 15

Chapter 44: Waiver of Tribal Immunities Ordinance 9, 10, 14, 18, 19-20

Chapter 44: Waiver of Tribal Immunities Ordinance (2009) 8, 14, 18, 19

Chapter 94: Gaming Authority Charter 8-9, 10, 12, 15-16, 18, 20

Court Rules:

Fed. R. Civ. P. 12(b)(1) 1 et passim

Fed. R. Civ. P. 12(b)(6) 1 et passim

L.R. 7.1 1

Other:

S. Rep. No. 446, 100th Cong. 2d sess. 5-6 (1988),

reprinted in 1988 U.S.C.C.A.N. 3071, 3075-76 11-12


1

INTRODUCTION

Pursuant to Rules 12(b)(1) and (6) of the Federal Rules of Civil Procedure

and LR 7.1 of the Local Rules of the United States District Court for the Eastern

District of Michigan, Defendant Kewadin Casinos Gaming Authority (the

“Authority”), a governmental instrumentality of the Sault Ste. Marie Tribe of

Chippewa Indians (the “Tribe”), through its undersigned counsel, respectfully

requests that this Court dismiss Plaintiff’s Complaint with prejudice for want of

subject matter jurisdiction and for failure to state a plausible claim for relief under

the Twombly/Igbal standard, as more fully discussed in this Memorandum of Law.

Plaintiff’s purported gaming-related contract1 with the Authority, which

oversees the Tribe’s gaming activities, is governed with reference to federal law,

i.e., the Indian Regulatory Gaming Act, 25 U.S.C. § 2701 et seq. (“IGRA”) and the

tribal Gaming Ordinance federally approved thereunder, among other tribal code

provisions. His Complaint does not acknowledge, as Plaintiff apparently attempts

to plead in avoidance of federal law, that the purported contract which he appends

as Exhibit A to his Complaint also specifically references that he will provide

professional consulting services relating to financing and capitalization of projects

by the Authority, including participation in a consortium with other owned casinos

1 Plaintiff attaches only an incomplete contract as Exhibit A to his Complaint. That

exhibit is lacking its own Exhibit A, alleged to identify “Finance Parties” in the

Second “Whereas” provision (See Ex. A to Pl. Compl., Doc 1, Ex. A, Pg ID 21).


2

(See Section 3 of Ex. A to Pl. Compl., Doc 1, Ex. A, Pg ID 21). Accordingly, this

Court has sufficient jurisdiction to determine its subject matter jurisdiction.

As a separate and independent ground for dismissal with prejudice under

Fed. R. Civ. P. 12(b)(1), the Authority contends that it, along with the Tribe, has

expressly reserved sovereign immunity within Plaintiff’s purported contract.

Section 11 of the purported contract expressly preserves the sovereign immunity of

the Authority and the Tribe (See Section 11 of Ex. A to Pl. Compl., Doc 1, Ex. A,

Pg ID 23). For this reason alone, Plaintiff’s lawsuit against the Authority is barred.

To the extent that Plaintiff attempts to interpret venue and choice of law

provisions and the unclear sentence on jurisdiction (which appears to omit words)

in Section 11 of the purported contract as some sort of implied waiver of sovereign

immunity, Plaintiff conflates jurisdiction with sovereign immunity. Additionally,

even if the venue provision, the choice of laws provision, and the unclear

jurisdiction provision in Section 11 were deemed to somehow affect sovereign

immunity, the final sentence in Section 11 clearly and unmistakably provides that

Section 11’s express reservation of sovereign immunity overrides any

interpretation of Section 11 as an implied waiver of sovereign immunity (Id.).

Federal law also requires a clear and unequivocal (and not an implied)

waiver of tribal sovereign immunity. Plaintiff’s purported contract is clearly

insufficient to waive the sovereign immunity of the Authority or the Tribe. For an


3

effective waiver, the Code requires a formal Board resolution, adopted in

conformity with Tribal Code requirements for a clear and unequivocal waiver of

the Authority’s sovereign immunity from suit. Plaintiff’s purported contract,

attached as Exhibit A to the Complaint, neither references nor contains such a

formal Board resolution. Waivers of venue and jurisdiction also require

compliance with Code requirements for specificity and a formal Board resolution.

Lacking such formal Board resolutions, the purported contract is ineffective to

waive the sovereign immunity of the Authority and to waive jurisdiction or venue;

and this Court should dismiss the Complaint with prejudice, pursuant to Fed. R.

Civ. P. 12(b)(1), for want of subject matter jurisdiction.

Additionally, the Tribal Code provides that such formal Board resolutions

must also be incorporated into a purported contract in order for any waiver of

sovereign immunity or jurisdiction to become a vested contractual right. No Board

resolutions appear in Exhibit A. For each and every one of these additional

separate and independent reasons, Plaintiff’s purported contract is not effective to

waive the sovereign immunity of the Authority or the Tribe or to waive

jurisdiction. Accordingly, Plaintiff’s lawsuit is barred, and this Court should

dismiss the Complaint with prejudice, pursuant to Fed. R. Civ. P. 12(b)(1) for want

of subject matter jurisdiction.

As yet another a separate and independent ground for dismissal of the


4

Complaint with prejudice, pursuant to Fed. R. Civ. P. 12(b)(6), Plaintiff’s

Complaint fails to state a plausible claim for relief under the Twombly/Iqbal

standard. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007); Ashcroft v. Iqbal,

556 U.S. 662 (2009). On its face, the purported contract supplied by Plaintiff is

incomplete: it is missing its Exhibit A identifying the “Finance Parties.” Plaintiff

failed to date his signature so that he cannot demonstrate the “Effective Date” of

the contract. Plaintiff does not allege that he has fulfilled conditions precedent to

payment. He fails to allege that, over the course of a decade, he gave any notice

whatsoever to the Authority about the identity of any “Finance Party” that

provided investment funds to the Authority for gaming-related purposes, casino-

related projects or future projects, or any other purpose. He also fails to allege that

he ever made any demands or claims for payment to Authority relating to specific

investors, documenting the amount of the claim and demonstrating that he was the

sole reason a Finance Party provided investment funds to the Authority.

I. STATEMENT OF FACTS

A. Plaintiff’s Complaint and Purported Contract

On April 9, 2019, Plaintiff William Cross Jr. (“Plaintiff”) filed a complaint

against the defendant Authority in the Third Circuit Court of Wayne County,

Michigan (see Exhibit A, Pl. Complaint, Doc 1, Notice of Removal with state court

pleadings, Pg ID 16-26). Without waiving sovereign immunity for itself or for the


5

Tribe, the Authority timely removed that Complaint to this Court, based on federal

question jurisdiction, within 30 days of its service (along with discovery requests)

on April 15, 2019 (see Exhibit B. Doc 1).

Plaintiff asserts two claims against the Authority in the Complaint: a breach

of contract claim that seeks fees based upon investment funds for financing and

capitalization of gaming-related projects of the Authority, including a “consortium

with other owned casinos” (See Pl. Compl., Count I, Doc 1, Pg ID 18 and 23) and

a declaratory judgment claim seeking an expedited declaration of the enforceability

of the contract and plaintiff’s right to relief from the Authority’s revenues (See Pl.

Compl., Count II, Pg ID 18-19).

Plaintiff alleges that he had cultivated unspecified relationships with various

unidentified entities interested in investing, including “Finance Parties”

purportedly identified on an exhibit to the contract (an exhibit that is not included

with the purported contract attached to Plaintiff’s Complaint (See Ex. A to Pl.

Compl., Doc 1, Ex. A, Pg ID 21, 2nd “Whereas” provision), and that Plaintiff was

to receive a consulting fee for investment funding “generated via Consultant’s

services under this Agreement from a Finance Party” (Doc 1, Ex. A, Pl. Compl.,

⁋ 7, Pg. ID 17-18). Plaintiff further alleges that, during the term of the contract, the

Authority “received investment funding of at least $6,078,504.16,” but that the

Authority failed to remit the compensation due him under the alleged contract, and


6

that any non-payment of the consulting fee on each disbursement of investment

funding would result in an 8% default interest rate” (Doc 1, Ex. A, Pl. Compl.,

⁋⁋ 8-9 and 11, Pg ID 18; see also, Ex. A to Pl. Compl. §§ 4 and 9(b), Pg ID 22-23).

The purported contract calls for Plaintiff to provide professional advice

relating to financing and capitalization of projects by the Authority, including

participation in a consortium with other owned casinos (See Section 3 of Ex. A to

Pl. Compl., Doc 1, Ex. A, Pg ID 21).

The purported contract requires that notices of demands and claims must be

in writing and sent via certified mail, return receipt requested and postage prepaid

(Ex. A to Pl. Compl., § 13(e), Doc 1, Ex. A, Pg ID 25). The Complaint fails to

allege that Plaintiff ever provided any such notices to the Authority, documenting

the Finance Parties that supplied “Investment Funds" to the Authority solely

because of his efforts. The contract further provides that the rule of contra

preferentem does not apply (Ex. A to Pl. Compl., § 13(g), Doc 1, Ex. A, Pg ID 25),

and that the Effective Date of the alleged contract “shall be the date of the last

signature to this Agreement,” with signatures permitted to be made in counterparts

(Ex. A to Pl. Compl., §§13(l) and 13(c), respectively, Doc 1, Ex. A, Pg ID 26 and

24, respectively). The “Counterparts” section, taken together with the “Effective

Date” section, requires two dated signatures, the later of which will provide the

“Effective Date.” However, Plaintiff’s signature does not bear a title or a date (Ex.


7

A to Pl. Compl., p. 6, Doc 1, Ex. A, Pg ID 29). Nor did Plaintiff signify his

agreement to a change in the finder’s fee by affixing his initials to the hand-written

change (Ex. A to Pl. Compl., next to § 4, Doc 1, Ex. A, Pg ID 22).

The alleged contract contains no limited, definite duration term (Ex. A to Pl.

Compl., § 2, Doc. 1, Ex. A, Pg ID 21; and Plaintiff alleges that the contract

purportedly continues in effect “as neither party has terminated it in writing in

accordance with [its] Paragraph 7” (Doc 1, Ex. A, Pl. Compl., ⁋ 13, Pg ID 18).

The purported contract contains a provision (Section 11) entitled

“Jurisdiction” purportedly delineating a venue provision and a governing laws

provision, but failing to contain a clear and unequivocal waiver of the defendant’s

right of removal or of sovereign immunity (Ex. A to Pl. Compl., § 11, Doc 1, Ex.

A, Pg ID 23). Section 11 contains no clear and unequivocal waiver of the

sovereign immunity of the Authority (described as the “Client”) and the Tribe

(Id.). To the contrary, Section 11 in fact contains an express and completely clear

reservation of the sovereignty and sovereign immunity of the Authority and the

Tribe: “Nothing contained herein shall be construed to be a waiver of the Client’s,

or Client’s parent’s governmental entity’s, sovereign immunity.” (Id.).


8

B. The Authority’s Oversight of Federally Regulated Gaming

Activities Consistent with Its Federally Approved Charter

and Tribal Ordinances

The Tribe created the Authority as a governmental instrumentality of the

Tribe with an autonomous existence for the purpose of overseeing licensed gaming

activities regulated under IGRA, and consistent with federal law, as demonstrated

in the Gaming Authority Charter (Chapter 94, attached as Exhibit B (“Charter”),

§§ 94.101, 94.105(1)), and the Tribe’s federally approved Gaming Ordinance

(Chapter 42, attached as Exhibit C (“Gaming Ordinance”), §§42.103, 42.104(2),

42.216, 42.713 (authorized under IGRA and the Tribe’s constitution and to be

administered in compliance with IGRA and federal regulations).2 The Gaming

Ordinance is to be liberally construed in favor of the Tribe (Ex. C, § 42.104(1)).

Under the Charter, the Authority is not empowered to waive the sovereign

immunity of the Tribe (Ex. B, Charter, § 94.111(1)). No purported waiver of

sovereign immunity of the Authority is effective unless it is made by express

2 Tribal ordinances, available on the Tribe’s Web site at www.saulttribe.com,

describe the Authority, the sovereign immunity of the Authority and the Tribe, the

prescribed limitations on any purported waiver of sovereign immunity or of

jurisdiction in order for the waiver to be effective, the specifics and requirements

of each waiver, and the manner in which any purported waiver of sovereign

immunity or jurisdiction must be passed by the Board. The Court may take

judicial notice of these publicly available documents for a Rule 12(b)(1) or (6)

motion without converting the motion into a Rule 56 summary judgment motion.

New England Health Care Employees Pension Fund v. Ernst & Young, LLP, 336

F.3d 495, 501 (6th Cir. 2003).


http://www.saulttribe.com/

9

resolution to waive sovereign immunity by the Management Board of the

Authority (Ex. B, Charter § 94.111(2)). Even if a Board resolution were to supply

such a waiver (which is, of course, not the case here), such a waiver by required

express Board resolution does not become a vested contractual right unless it is

attached to the subject contract. (Chapter 44, Waiver of Tribal Immunities

Ordinance (“Tribal Immunities Ordinance”) attached as Exhibit D, § 44.110).3

C. The Sole Contractual Section Plaintiff Identifies

The Complaint seeks damages from, and injunctive relief in the form of a

declaratory judgment against, the Authority, a governmental instrumentality of the

Tribe. Plaintiff’s Complaint points to a single section - Section 11 of his purported

contract -- and characterizes that Section as an agreement to cabin the Authority to

state court under state law. On its face Section 11 contains an express reservation

of sovereign immunity of the Authority and the Tribe in a final sentence that

expressly overrides any other provision to the contrary in Section 11 (Ex. A to Pl.

Compl., § 11, Doc 1, Ex. A, Pg ID 23). Moreover, Section 11 does not conform to

3 In 2009, the Tribal Immunities Ordinance contained a § 44.108, since repealed.

(See Exhibit E, 2009 Tribal Immunities Ordinance, § 44.108). However, § 44.110

remained the same and provided for no vested contractual right regarding a waiver

of sovereign immunity or jurisdiction if a contract did not incorporate the Board

resolution waiving sovereign immunity or jurisdiction (Exhibit E, § 44.110).

Because there is no Board resolution waiving the sovereign immunity of the

Authority or waiving jurisdiction attached to Plaintiff’s purported contract as

required in § 44.110 in order to Plaintiff to have a vested contractual right in the

waiver, the current ordinance applies, sans § 44.108.


10

Tribal Code requirement for waivers of sovereign immunity or jurisdiction.

The other alleged party to the purported contract, i.e., the Authority through

its then Chair, was not empowered to waive the sovereign immunity of the Tribe

(Ex. B, Charter, § 94.111(1)). Under the Gaming Charter, no purported waiver of

sovereign immunity of the Authority is effective except by formal resolution to

waive sovereign immunity adopted by the Management Board of the Authority

(Ex. B, Charter § 94.111(2)). Again, such a purported waiver does not become a

vested contractual right unless the Board resolution is attached to the subject

contract (Ex., D, Tribal Immunities Ordinance, § 44.110).

D. Plaintiff’s Failure to Date, Initial or Comply with the Purported

Contract

The purported incomplete contract which Plaintiff attaches to his Complaint

lacks a dated signature to provide an “Effective Date” under its counterparts

provision, does not bear Plaintiff’s initials next to a reduced finder’s fee, and does

not reference or contain any Board resolution waiving the sovereign immunity of

the Authority or the Tribe (See, generally, Pl. Compl., Ex. A, Doc 1, Ex. A). The

purported contract does contain a notice provision for any demands or claims

under the contract, and Plaintiff does not allege that he has ever once complied

with the notice provision since 2009, by identifying any Finance Party, any amount

invested, or any date by which he should have paid. For over a decade, Plaintiff

remained silent, allowing a purported interest rate to collect. (See, generally, Pl.


11

Compl., Ex. A, Doc 1, Ex. A). Plaintiff alleges nothing more than an aggregate

total of supposed investment funds in Paragraph 8 of his Complaint (Pl. Compl. ⁋

8, Doc. 1, Ex. A, Pg ID 18), but not once anywhere in his Complaint does he allege

that he apprised the Authority which Finance Parties supplied which investment

funds and when those funds were supplied and in what amounts. He never alleges

that he ever documented for the Authority whether his services alone brought the

Finances Parties to invest in gaming-related projects of the Authority or the Tribe.

In short, Plaintiff fails to allege any facts that he followed the notice provision of

the purported contract at any time.

II. ARGUMENT

A. The Court Has Sufficient Jurisdiction To Rule on the Motions

This Court may exercise sufficient federal question jurisdiction for the

limited purpose of ascertaining its own jurisdiction. United States v. Ruiz, 532

U.S. 622, 628 (2002). Plaintiff appears to attempt to plead in avoidance of federal

law, where his purported contract calls for Plaintiff to provide professional advice

relating to financing and capitalization of projects by the Authority, including

participation in a consortium with other owned casinos (See Section 3 of Ex. A

attached to Pl. Compl., Doc 1, Ex. A, Pg ID 21). Adopted one year after

California v. Cabuzon Band of Mission Indians, 480 U.S. 202 (1987), “[IGRA]

expressly preempt[s] the field of the governance of gaming activities on Indian


12

lands.” S. Rep. No. 446, 100th Cong. 2d sess. 5-6 (1988), reprinted in 1988

U.S.C.C.A.N. 3071, 3075-76. Field preemption permits removal under the

corollary (sometimes called an exception) to the well-pleaded complaint rule that

the state-law claim pled is necessarily federal in character.

Under such circumstances, the Court has sufficient jurisdiction to determine

whether it must dismiss Plaintiff’s claims for want of subject matter jurisdiction.

B. Separate and Independent Grounds Exist to Dismiss the

Complaint Pursuant to Rule 12(b)(1)

Fed. R. Civ. P. 12(b)(1) provides for dismissal of an action for “lack of

subject matter jurisdiction.” A Rule 12(b)(1) motion can challenge the sufficiency

of the pleadings to establish jurisdiction (facial attack), or a lack of any factual

support for subject matter jurisdiction despite the pleading’s sufficiency (factual

attack). Gentek Building Products, Inc. v. Sherwin Williams Co., 491 F. 320, 330

(6th Cir. 2007) (citing Palkow v. CSX Transp., Inc., 431 F.3d 543, 552 (6th Cir.

2005)). For a facial attack, all allegations are accepted as true. For a factual attack,

evidence outside the pleadings needed to resolve factual disputes as to jurisdiction

may be considered. Id. Here, the Authority presents a factual attack, i.e., that the

Authority and the Tribe enjoy sovereign immunity from suit under federal law

(with which the Tribe’s charters and ordinances are consistent), that the subject

contract expressly and clearly reserves their sovereign immunity, and that the

ambiguous remainder of Section 11 does not constitute a clear and unequivocal


13

waiver of sovereign immunity or jurisdiction. The Court may go beyond the face

of the complaint and consider evidence presented by the parties. See Cartwright v.

Garner, 751 F.3d 752, 759 (6th Cir. 2014) (on motion to dismiss based on factual

lack of jurisdiction, a court has “broad discretion with respect to what evidence to

consider in deciding whether subject matter jurisdiction exists, including evidence

outside the pleadings, and has the power to weigh the evidence and determine the

effect of that evidence on the court's authority to hear the case.”).

This Court should dismiss Plaintiff’s Complaint, pursuant to Fed. R. Civ. P.

12(b)(1), for want of subject matter jurisdiction for the following separate and

independent reasons:

1) the contract is ineffective to waive sovereign immunity of the

Authority or the Tribe under federal law, including but not limited to the

federally approved Gaming Ordinance, which incorporates limitations of the

Gaming Authority Charter and other tribal ordinances;

2) the Authority and the Tribe have expressly retained sovereign

immunity in Section 11 of the purported contract;

3) that sole section upon which Plaintiff relies for an agreement to

confer jurisdiction on the state court does not contain a clear and

unequivocal waiver of sovereign immunity or jurisdiction;

4) the purported contract does not incorporate any formal Board


14

resolution waiving the Authority’s or the Tribe’s sovereign immunity or any

waiver of jurisdiction (Ex. D, Tribal Immunity Ordinance, § 44.110; Ex. E,

2009 Tribal Immunity Ordinance, § 44.110) (both requiring attachment to

contract to vest contractual right); and/or

5) the purported waiver of sovereign immunity does not conform to

the limitations on such a waiver in the Tribal Immunity Ordinance.

1. This Court May Construe the Gaming-Related Contract as Invalid

or Ineffective under Federal Law

In Cabazon Band of Mission Indians, 480 U.S. at 216, a pre-IGRA case, the

Supreme Court held that “[s]tate jurisdiction is pre-empted [sic] by the operation of

federal law if it interferes or is incompatible with federal and tribal interests

reflected in federal law, unless the state interests at stake are sufficient to justify

the assertion of state authority.” (citing New Mexico v. Mescalero Apache Tribe,

462 U.S. 324, 334 (1983)). Applying that standard to Indian gaming, the Court

concluded, pre-IGRA, that even a state’s interests in preventing the infiltration of

organized crime did “not justify state regulation of the tribal bingo enterprises in

light of the compelling federal and tribal interest supporting [tribal enterprise].”

480 U.S. at 221-22. Those compelling federal and tribal interests included

promotion of tribal self-government and economic development by tribal and

federal regulation of gaming activity on Indian lands exclusive of the state,


15

including tribal development and implementation of federally approved tribal

ordinances regulating Indian gaming activities. Id. at 216-19.

Here, Plaintiff attaches an incomplete consulting agreement with the

Authority, but one which states that he was apparently to provide consulting

services relating to capitalization and financing of projects undertaken by the

Authority, including participation in a consortium with other owned casinos (See

Section 3 of Ex. A attached to Pl. Compl., Ex. A). Under such circumstances,

Plaintiff’s purported contract is gaming-related and may be subject to IGRA. The

Tribe, a federally recognized tribe, formed the Authority to oversee its gaming

activities, regulated in part under IGRA and under federally approved tribal

ordinances relating to gaming, such as the Gaming Ordinance, which in § 42.304

incorporates the requirements and limitations of the Gaming Authority Charter (see

Ex. C, Gaming Ordinance, §§ 42.103 and 42.104 indicating its relationship with

IGRA and §42.303(2), expressing limiting the powers of the Authority (including

the power to contract or to waive sovereignty to be “[w]ithin the limitations

imposed by the Gaming Authority Charter and other tribal ordinances”). Those

requirements include the attachment of a Management Board Resolution to any

contract which purports to waive the sovereign immunity of the Authority (Ex. B,

Charter, § 94.111(1) and (2)). In addition, the Gaming Authority Charter clearly

prevents the Authority from waiving sovereign immunity of the Tribe itself (Ex. B,


16

Charter, § 94.111(1).4 The Waiver of Tribal Immunities Ordinance requires the

same for a waiver of jurisdiction (Ex. D, Tribal Immunity Ordinance, § 44.109).

Plaintiff’s purported contract itself contains on its face a clear and express

reservation of the sovereign immunity of the Tribe and the Authority (Ex. A to Pl.

Compl., § 11, final sentence, Doc 1, Ex. A, Pg ID 21). Thus, on its very face the

purported contract necessarily implicates the federal common-law of tribal

sovereign immunity. The Authority contends that, consistent with federal law and

with federally approved tribal laws, the final sentence of Section 11 in Plaintiff’s

purported gaming-related contract expressly states that the Authority and the Tribe

have not waived sovereign immunity, and that the final express sentence precludes

implying a waiver of sovereign immunity based on all other terms of that

provision, including the venue provision, the governing law provision, and the

unclear sentence on jurisdiction (Id.). In short, the express reservation of sovereign

immunity by the Authority and the Tribe in Section 11 in Plaintiff’s purported

contract is consistent with federal law.

2. This Court May, As a Matter of Law, Find the Lawsuit Barred by an

Ineffective Waiver of Tribal Sovereignty

On its face, Plaintiff’s purported contract raises the issue of sovereign

4 Presumably, in reviewing and approving the Gaming Ordinance, the NIGC Chair

also reviewed the Gaming Authority Charter and the Waiver of Immunities

Ordinance as a result of the incorporation of the limitations into the Gaming

Ordinance.


17

immunity. As federal courts have recognized, tribal immunity is a matter of

purely federal law. Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 759

(1998); South Dakota v. Yankton Sioux Tribe, 522 U.S. 329, 343 (1989). Indian

tribes have an interest in a national uniform body of federal law relating to

sovereign immunity.

The Tribe and its instrumentalities are only subject to suit only where

Congress or the tribe (or its instrumentalities as authorized by and in conformity

with tribal ordinances) has expressly, clearly and unequivocally waived the tribe’s

sovereign immunity. Failing such a clear waiver, lawsuits against a tribe or its

governmental instrumentalities are barred.

Suits against Indian tribes are barred by sovereign immunity absent a clear

and unequivocally expressed waiver of immunity by the tribe or by congressional

abrogation. Kiowa Tribe, 523 U.S. 754; Okla. Tax Comm’n v. Citizen Band

Potawatomi Indian Tribe of Okla., 498 U.S. 505, 509 (1991) (“Indian tribes are

domestic dependent nations that exercise inherent sovereign authority over their

members and territories. Suits against Indian tribes are thus barred by sovereign

immunity absent a clear waiver by the tribe or congressional abrogation.” (internal

quotation marks and citation omitted)). Nor is immunity from suit confined to

transactions on reservations and to governmental activities. Kiowa Tribe, 523 U.S.

at 755. Any doubt of any intent to abrogate sovereign immunity must be resolved


18

in favor of Indian tribes. Bryan v. Itasca Cty., Minn., 426 U.S. 373, 392 (1976).

Sovereign immunity is a matter of purely federal law, Yankton Sioux Tribe,

522 U.S. at 343, and “[m]uch like foreign sovereigns, Indian tribes have an interest

in a uniform body of federal law in this area.” Contour Spa at the Hard Rock, Inc.

v. Seminole Tribe of Florida, 692 F.3d 1200, 1202, 1206-07 (11th Cir. 2012).

The purported contract does not contain, reference, incorporate or attach

any Board resolutions waiving sovereign immunity or jurisdiction by the

Management Board of the Authority and the Board of Directors of the Tribe, as

mandated in order to rise to the level of a vested, contractual right. As a result, the

contract is ineffective to waive such immunity or jurisdiction under tribal law.

(Ex. B, Charter, §§ 94.111(1) and (2) (requiring duly adopted waiver resolutions

by the Management Board and preserving the sovereign immunity of the Tribe in

adopting the Charter); Ex. D, Tribal Immunity Ordinance, § 44.110; Ex. E, 2009

Tribal Immunity Ordinance, § 44.110) (both providing that, to rise to level of

vested contractual right, any Board resolution waiving sovereign immunity or

jurisdiction must be attached to the commercial contract).

The language upon which the Plaintiff appears to rely in Section 11, i.e., its

venue provision, its governing law provision, and an unclear sentence pertaining to

jurisdiction, do not constitute the clear and unequivocal waiver of sovereign

immunity that federal law requires. As the Supreme Court has noted, similar to the


19

Congressional abrogation of tribal sovereign immunity, “to relinquish its

immunity, a tribe’s waiver of sovereign immunity must be clear,” C & L

Enterprises v. Citizen Band, Potawatomi Indian Tribe of Okla., 532 U.S. 411, 418

(2001) (quoting Okla. Tax Comm’n, 498 U.S. at 509. In C & L Enterprises, as in

Kiowa, the Supreme Court held that a tribe’s sovereign immunity extended to suits

on off-reservation commercial contracts.

The final sentence of Section 11 clearly provides that the other sentences in

the provision cannot be construed to waive the express sovereign immunity of the

Authority or of the Tribe. The other sentences are also clearly insufficient to waive

jurisdiction. At best, those provisions appear to allow a plaintiff to begin a lawsuit

in state court, subject to the Tribe’s right of removal (which is not waived in

Section 11) under state-court procedures. As a matter of law, nothing in Section

11constitutes a clear and unequivocal waiver of the sovereign immunity of the

Authority or of the Tribe or of jurisdiction.

Finally, given the indefinite duration of the purported contract in question,

which Plaintiff contends has extended for ten years and continues in effect, the

purported contract is incompatible with the very limited nature of a waiver of

sovereign immunity or jurisdiction in the Tribe’s Waiver of Tribal Immunities

Ordinance (see Ex. D, §§ 44.107 and 44.109 (waivers of sovereign immunity and

jurisdiction must be specific and limited as to duration, transaction, property or


20

funds of the Tribal entity subject to the waiver, and specific as to jurisdiction and

applicable law; moreover, neither a “sue and be sued clause”5 nor a Board

resolution waiving immunity or jurisdiction may be deemed to consent to a

judgment against the Tribal entity). The alleged contract contains no limited,

definite duration term (Ex. A to Pl. Compl., § 2, Doc. 1, Ex. A, Pg ID 21); and

Plaintiff alleges that the contract purportedly continues in effect “as neither party

has terminated it in writing in accordance with [its] Paragraph 7” (Doc 1, Ex. A, Pl.

Compl., ⁋ 13, Pg ID 18). Plaintiff in essence alleges, anomalously, that the

Authority and he agreed that he could sue the Authority over an indefinite period

of time without any specificity of the identity of the Finance Party, the amount and

timing of investment funds, or the scope of his role in bringing those funds to the

Authority, even though the Management Board of the Authority could not waive

its or the Tribe’s sovereign immunity from a lawsuit on, or tribal jurisdiction over,

a gaming-related contract for anything but a limited duration in time.

* * * * *

For any or all of these separate and independent reasons (i.e., that the

purported contract expressly reserves the Authority’s and the Tribe’s sovereign

5 It should be noted that the “sue and be sued” clause in the Gaming Authority

Charter expressly requires a formal Management Board resolution: “The

Authority’s ability to sue and be sued and to waive its immunity from suit shall at

all times remain with the Management Board to be granted by duly adopted

resolution.” (Ex. B, Charter, § 94.111(1), final sentence, p. 94-6).


21

immunity, is ineffective to waive sovereign immunity or jurisdiction without

requisite formal Board resolutions, lacks a clear and unequivocal waiver of

sovereign immunity or of jurisdiction in Section 11, and/or conforms to federal law

and tribal ordinances circumscribing the specifics and manner of waivers of

sovereign immunity or jurisdiction, this Court should dismiss Plaintiff’s Complaint

with prejudice, pursuant to Rule 12(b)(1), for want of subject matter jurisdiction.

C. As a Separate and Independent Ground for Dismissal under Rule

12(b)(6), Plaintiff Fails to Pleads A Plausible Claim for Relief.

Under Rule 12(b)(6), a court must dismiss a pleading that fails to state a

claim on which relief may be granted. Fed. R. Civ. P. 12(b)(6). A claim must

“possess enough heft to show that the pleader is entitled to relief,” Twombly, 550

U.S. at 557, and a court should dismiss an action where a plaintiff fails to allege

“enough facts to state a claim to relief that is plausible on its face.” Id. at 555 n.3,

570. A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) tests a complaint’s

sufficiency. To survive a Rule 12(b)(6) motion to dismiss, the complaint's “factual

allegations must be enough to raise a right to relief above the speculative level on

the assumption that all of the allegations in the complaint are true.” Twombly, 550

U.S. at 545. See also Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio,

502 F.3d 545, 548 (6th Cir. 2007).

Conclusory allegations or legal conclusions masquerading as factual

allegations will not suffice. Sam Han v. Univ. of Dayton, 541 F. App’x 622, 625


22

(6th Cir. 2013). The court is “not bound to accept as true a legal conclusion

couched as a factual allegation.” Ashcroft, 556 U.S. at 662 (internal quotation

marks and citation omitted). Moreover, “[o]nly a complaint that states a plausible

claim for relief survives a motion to dismiss.” Id. Thus, “a court considering a

motion to dismiss can choose to begin by identifying pleadings that, because they

are no more than conclusions, are not entitled to the assumption of truth.”

“While legal conclusions can provide the framework of a complaint, they

must be supported by factual allegations. When there are well-pleaded factual

allegations, a court should assume their veracity and then determine whether they

plausibly give rise to an entitlement to relief.” Id. In sum, “[t]o survive a motion

to dismiss, a complaint must contain sufficient factual matter, accepted as true, to

state a claim for relief that is plausible on its face." Id. at 1949 (internal quotation

marks and citation omitted).

Plaintiff’s Complaint fails to articulate material factual allegations

supporting a plausible claim for relief under the Twombly/Igbal standard.

Plaintiff’s allegations are general, non-specific, and conclusory. Plaintiff alleges

nothing more than a total of the alleged investment funding, but not once anywhere

in his Complaint does he allege which Finance Parties supplied such funds, or

whether his services alone brought the Finance Parties to invest in projects of the

Authority or the Tribe. Further, Plaintiff fails to allege that he followed the notice


23

provision of the purported contract at any time. Plaintiff alleges that he had

cultivated unspecified relationships with various unidentified entities interested in

investing, including “Finance Parties” purportedly identified on an unsupplied

Exhibit A to his purported contract (See Ex. A to Pl. Compl., Doc 1, Ex. A, Pg ID

21, 2nd “Whereas” provision), and that Plaintiff was to receive a consulting fee for

investment funding “generated via Consultant’s services under this Agreement

from a Finance Party” (Doc 1, Ex. A, Pl. Compl., ⁋ 7, Pg. ID 17-18).

The purported contract requires that notices of demands and claims must be

in writing and sent via certified mail, return receipt requested and postage prepaid

(Ex. A to Pl. Compl., § 13(e), Doc 1, Ex. A, Pg ID 25). The Complaint fails to

allege that Plaintiff ever provided any such notices to the Authority, documenting

the Finance Parties that supplied “Investment Funds" to the Authority solely

because of his efforts.

The contract further provides that the Effective Date of the alleged contract

“shall be the date of the last signature to this Agreement,” with signatures

permitted to be made in counterparts (Ex. A to Pl. Compl., §§13(l) and 13(c),

respectively, Doc 1, Ex. A, Pg ID 26 and 24, respectively). The “Counterparts”

section, taken together with the “Effective Date” section, requires two dated

signatures, the later of which will provide the “Effective Date.” However,

Plaintiff’s signature does not bear a title or a date (Ex. A to Pl. Compl., p. 6, Doc 1,


24

Ex. A, Pg ID 29). Plaintiff also failed to signify his agreement to a change in the

finder’s fee by affixing his initials to the hand-written change (Ex. A to Pl. Compl.,

next to § 4, Doc 1, Ex. A, Pg ID 22).

In short, Plaintiff’s complaint fails to allege a plausible claim for relief,

where he has not provided a complete contract, where he has not identified any

specific “Finance Parties” who provided investment funds to the Authority solely

because of Plaintiff’s efforts, where he has not specified the dates of the purported

“Closings,” and where he has failed to allege that he even followed the notice

provisions of the purported contract to make a demand or claim for payments.

Even more significantly, Plaintiff’s complaint fails to allege a plausible claim for

relief because the contract, on its face, preserves the Authority’s and the Tribe’s

sovereignty immunity and lacks any provision incorporating Board resolutions

waiving, through a clear and unequivocal waiver, the sovereign immunity of the

Authority and of the Tribe or jurisdiction. This Court should conclude that

Plaintiff’s complaint cannot, and could not by any amendment given the

insufficiency of the purported contract provided, state a plausible claim for relief;

thus, the Authority is also entitled to dismissal with prejudice, pursuant to Rule

12(b)(6), for failure to state a claim.


25

CONCLUSION

For the above-discussed reasons, Defendant Kewadin Casinos Gaming

Authority, a governmental instrumentality of the Sault Ste. Marie Tribe of

Chippewa Indians, respectfully requests that this Honorable Court grant this

Motion and dismiss Plaintiff’s Complaint with prejudice, pursuant to Fed. R. Civ.

P. 12(b)(1) and (6), and award the Authority its reasonable attorneys’ fees and

costs incurred in bringing this Motion.

Dated: May 7, 2019 Respectfully submitted,

KEWADIN CASINOS GAMING AUTHORITY,

a governmental instrumentality of the SAULT

STE. MARIE TRIBE OF CHIPPEWA INDIANS,

a/k/a SAULT STE. MARIE TRIBAL GAMING

AUTHORITY

/s/ Diane M. Soubly

Diane M. Soubly (P32005)

Butzel Long, a professional corporation

301 E. Liberty Street, Suite 500

Ann Arbor, Michigan 48104

T: (734) 213-3625

F: (734) 995-1777

[email protected]

Counsel for Defendant Kewadin Casinos

Gaming Authority



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CERTIFICATE OF SERVICE

The undersigned certifies that, on May 7, 2019, she caused to be served on

the following counsel for Plaintiff the foregoing Defendant’s Motion to Dismiss

Plaintiff’s Complaint, Memorandum in Support of the Motion, and exhibits

thereto, via email to [email protected] and via first-class mail, pre-addressed and

postage prepaid and the following address:

Andrew J. Broder

PAYNE, BRODER & FOSSEE, P.C.

32100 Telegraph Road, Suite 200

Bingham Farms, MI 48025-2454

/s/ Diane M. Soubly

Diane M. Soubly (P32005)



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