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George ENGASSER, Plaintiff, v. TETRA TECH, INC., et al., Defendants.
Tetra Tech, Inc., Third-Party Plaintiff, v. Mechoopda Cultural Resource Preservation Enterprise, Third-Party Defendant.
ORDER GRANTING THIRD-PARTY DEFENDANT'S MOTION TO DISMISS 
Before the Court is Third-Party Defendant Mechoopda Cultural Resource Preservation Enterprise's Motion to Dismiss for lack of jurisdiction (“Motion”). (Mot., ECF No. 34.) For the reasons discussed below, the Motion is GRANTED.1
In February 2019, Tetra Tech, Inc. entered into an agreement with the California Department of Resources Recycling and Recovery to coordinate the abatement and removal of debris resulting from California's Camp Fire in Butte County. (Tetra Tech's Am. Third-Party Compl. (“TT Compl.”) ¶ 6, ECF No. 31.) Much of the property burned by the Camp Fire included the ancestral land of the Mechoopda Indian Tribe of Chico Rancheria, California (the “Tribe”). (Opp'n to Mot. 4, ECF No. 36.) Accordingly, in March 2019, Tetra Tech entered into a Professional Services Agreement (“PSA”) with Mechoopda Cultural Resource Preservation Enterprise (“Mechoopda”) to provide tribal monitoring for the cleanup. (TT Compl. ¶ 8, Ex. A (“PSA”).) Mechoopda is a wholly owned, unincorporated entity of the Tribe whose purpose is to protect tribal cultural resources and further the economic operation and resources of the Tribe. (Mot. 6 (citing Decl. of Robyn Forristel (“Forristel Decl.”) ¶ 5, Ex. B, ECF No. 34-4).) Under the PSA, tribal monitors provided protection and treatment of tribal cultural resources and artifacts unearthed during the cleanup. (See PSA § I; Reply 4, ECF No. 37.)
Tetra Tech asserts that, under the PSA, Mechoopda had sole responsibility for tribal monitors and Tetra Tech had no ability to control the pay and work conditions of Mechoopda's employees. (TT Compl. ¶ 17.) The parties agreed in the PSA to indemnify and defend each other against “losses, damages, liabilities, fines, fees, penalties and claims” caused by the other's “intentional misconduct and sole negligence [sic] acts or omissions.” (PSA § II.B.) The PSA also includes a Dispute Resolution provision that provides, “[p]rior to commencing litigation,” a party seeking relief must meet and confer with the other in a good faith attempt to resolve “all claims, disputes, and other matters in controversy ․ arising out of or in any way related to” the PSA. (Id. § IV.F.) The Dispute Resolution provision states that “[a]ny court with competent jurisdiction shall have the authority to enforce this provision and to determine if the meet and confer process has been satisfied.” (Id.)
The PSA expressly acknowledges that Mechoopda is an instrumentality of the Tribe, which is federally recognized and a sovereign government. (Id., Preamble.) The PSA states, “Nothing herein shall be construed as a waiver of sovereign immunity.” (Id. § IV.D.)
Plaintiff George Engasser performed work as tribal monitor employed by Mechoopda under the PSA. (See TT Compl. ¶ 20; Compl. ¶¶ 4, 12, ECF No. 1.) On September 13, 2019, Engasser filed this action solely against Tetra Tech, on behalf of himself and a putative class of tribal monitors. (See Compl.) He asserts wage-and-hour violations under the Fair Labor Standards Act [29 U.S.C.A. § 201 et seq.]and California law. (See Compl.; Opp'n 8.) Tetra Tech demanded that Mechoopda defend and indemnify Tetra Tech against Engasser's suit. (TT Compl. ¶¶ 24–25.) When Mechoopda failed to agree, Tetra Tech filed a Third-Party Complaint against Mechoopda seeking indemnity, contribution, and restitution. (Id. ¶¶ 26, 29–55.)
Mechoopda now moves to dismiss Tetra Tech's Third-Party Complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of jurisdiction on the grounds that Mechoopda has not waived its tribal sovereign immunity and is therefore immune from Tetra Tech's suit. (Mot. 4, 8.)2
III. LEGAL STANDARD
A party may move to dismiss a case for lack of subject matter jurisdiction pursuant to Rule 12(b)(1). Fed. R. Civ. P. 12(b)(1). “A Rule 12(b)(1) jurisdictional attack may be facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). A Rule 12(b)(1) motion based on sovereign immunity is a challenge to the factual existence of subject matter jurisdiction. Pistor v. Garcia, 791 F.3d 1104, 1111 (9th Cir. 2015). “[I]n a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air for Everyone, 373 F.3d at 1039. Thus, in resolving a factual attack, the court need not presume the truthfulness of the plaintiff's allegations and “may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment.” Id. Once a party has moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the opposing party bears the burden of establishing the court's jurisdiction. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010).
Mechoopda contends the Court lacks subject matter jurisdiction over Tetra Tech's Third-Party Complaint because Mechoopda enjoys tribal sovereign immunity, which it has not waived. (Mot. 8–14.) Tetra Tech does not dispute that Mechoopda is entitled to tribal sovereign immunity. (See Opp'n 10.) Rather, Tetra Tech argues Mechoopda waived its immunity by executing the PSA, specifically the Dispute Resolution provision. (Id. at 10–16.)
A. Tribal Sovereign Immunity
“The Supreme Court has repeatedly declared a presumption favoring tribal sovereign immunity.” Demontiney v. U.S. ex rel. Dep't of Interior, Bureau of Indian Affs., 255 F.3d 801, 811 (9th Cir. 2001). “As a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity.” See Kiowa Tribe of Okla. v. Mfg. Techs., 523 U.S. 751, 754, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998); Okla. Tax Comm'n v. Citizen Band Potawatomi Indian Tribe of Okla., 498 U.S. 505, 509, 111 S.Ct. 905, 112 L.Ed.2d 1112 (1991). Tribal sovereign immunity thus precludes subject matter jurisdiction in an action against a federally recognized tribe. Alvarado v. Table Mountain Rancheria, 509 F.3d 1008, 1015–16 (9th Cir. 2007). “Inclusion of a tribe on the Federal Register list of recognized tribes is generally sufficient to establish entitlement to sovereign immunity.” Larimer v. Konocti Vista Casino Resort, Marina & RV Park, 814 F. Supp. 2d 952, 955 (N.D. Cal. 2011) (citing Ingrassia v. Chicken Ranch Bingo & Casino, 676 F. Supp. 2d 953, 957 (E.D. Cal. 2009)). The sovereign immunity of a tribe extends to its economic and governmental activities, so long as the acting entity “functions as an arm of the tribe.” Allen v. Gold Country Casino, 464 F.3d 1044, 1046–48 (9th Cir. 2006); White v. Univ. of Cal., 765 F.3d 1010, 1025 (9th Cir. 2014) (articulating factors for determining whether an entity is an arm of the tribe).
Tribes protected by sovereign immunity may waive immunity by contract. See Am. Vantage Cos. v. Table Mountain Rancheria, 292 F.3d 1091, 1099 (9th Cir. 2002). However, there is a strong presumption against waiver of tribal sovereign immunity. Demontiney, 255 F.3d at 811. “[W]aivers of tribal sovereign immunity may not be implied,” but must be clear and unequivocal. Allen, 464 F.3d at 1047; C & L Enters. v. Citizen Band Potawatomi Indian Tribe of Okla., 532 U.S. 411, 418–19, 121 S.Ct. 1589, 149 L.Ed.2d 623 (2001); Maxwell v. Cnty. of San. Diego, 708 F.3d 1075, 1087 (9th Cir. 2013). The plaintiff bears the burden to show waiver. Ingrassia, 676 F. Supp. 2d at 956.
The parties do not dispute that Mechoopda is entitled to tribal sovereign immunity as an arm of the Tribe. (See Mot. 9; Opp'n 10.) Further, the undisputed evidence supports this conclusion, that Mechoopda is a wholly owned, unincorporated entity of the Tribe, operating as an arm and on behalf of the Tribe. Thus, Mechoopda is immune from suit absent waiver.3 See Allen, 464 F.3d at 1046–47 (finding casino entitled to sovereign immunity where it was wholly owned and operated by, and acting as arm of, the tribe); Larimer, 814 F. Supp. 2d at 955 (same).
Tetra Tech contends Mechoopda waived its sovereign immunity by agreeing to the Dispute Resolution provision of the PSA, which Tetra Tech interprets as creating a right to sue Mechoopda. (Opp'n 10–14.) For support, Tetra Tech relies on C & L Enterprises, 532 U.S. 411, 121 S.Ct. 1589, 149 L.Ed.2d 623. (Id.)
In C & L, the Supreme Court held the Potawatomi Tribe clearly waived its sovereign immunity in a contractual arbitration provision. 532 U.S. at 418–20, 121 S.Ct. 1589. In the arbitration provision in C & L, the tribe expressly agreed to submit disputes under the contract to final and binding arbitration, to be conducted in accordance with the American Arbitration Association's (“AAA”) procedures. Id. at 415, 121 S.Ct. 1589. The tribe explicitly consented to judicial enforcement of any resulting arbitration award “and judgment ․ entered upon it.” Id. Additionally, the applicable AAA rules provided that the parties to an arbitration “shall be deemed to have consented that judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof.” Id. The tribe also agreed to a choice-of-law provision designating Oklahoma law as the governing law, which law provided that “an agreement ․ providing for arbitration in this state confers jurisdiction on the court to enforce the agreement ․ and to enter judgment on an award thereunder.” Id. (emphasis added).
The Supreme Court found these provisions together established a clear waiver of tribal sovereign immunity. Id. at 418, 121 S.Ct. 1589. “There is nothing ambiguous about the language of the arbitration clause. The tribe agree[d] to submit disputes arising under the contract to arbitration, to be bound by the arbitration award, and to have its submission and the award enforced in a court of law.” Id. at 420, 121 S.Ct. 1589 (brackets omitted) (quoting Sokaogon Gaming Enter. Corp. v. Tushie-Montgomery Assocs., Inc., 86 F.3d 656, 659 (7th Cir. 1996)) (noting Sokaogon concerned “an arbitration clause essentially indistinguishable from” the one in C & L). The tribe chose Oklahoma law to govern, which conferred jurisdiction in Oklahoma courts. Id. Thus, the tribe clearly consented to binding arbitration and “to the enforcement of arbitral awards in Oklahoma state court,” and the Court found the tribe had waived its immunity from C & L's suit. Id. at 423, 121 S.Ct. 1589.
Applying C & L, the Ninth Circuit has found contractual provisions did not waive immunity where the dispute resolution procedure was not binding, the tribe did not unequivocally submit to a court's jurisdiction, or the tribe expressly retained its sovereign immunity. See Miller v. Wright, 705 F.3d 919, 925 (9th Cir. 2013); Demontiney, 255 F.3d at 812–13. For instance, in Miller, the Ninth Circuit found that the tribe did not waive its sovereign immunity in a non-binding mediation provision that did not reflect an intent to submit to adjudication. 705 F.3d at 925. The court distinguished C & L, finding the contract at issue in Miller contained none “of the provisions, including subjecting itself to the jurisdiction of the state, that formed the basis for the waiver in C & L.” Id. at 925–26.
Similarly, in Demontiney, the Ninth Circuit found the tribe did not waive its sovereign immunity where the contract addressed such mundane issues as indemnity and insurance, and, significantly, expressly retained tribal sovereign immunity. 255 F.3d at 812–13. The Demontiney court also distinguished C & L, explaining that the dispute resolution clause in Demontiney did not incorporate procedures that provided jurisdiction in non-tribal courts or include a choice-of-law clause contemplating any law other than that of the tribe. Id. Where the “only express discussion of sovereign immunity ․ indicates that the [t]ribe did not intend to waive its sovereign immunity,” and “[n]one of the other clauses adduced” showed the tribe's waiver, the court concluded that the tribe did not clearly waive its immunity. Id. at 813.
The facts here are more akin to Miller and Demontiney than to those in C & L. Mechoopda expressly retained its sovereign immunity in the PSA. Just two lines above the Dispute Resolution provision, the PSA states unequivocally, “Nothing herein shall be construed as a waiver of sovereign immunity.” (PSA § IV.D.) As in Demontiney, this is the only express discussion of sovereign immunity in the PSA to which the parties direct the Court,4 and it makes it abundantly clear that Mechoopda did not intend to waive its sovereign immunity. See Demontiney, 255 F.3d at 812–13. Tetra Tech's attempts to dismiss Mechoopda's express and unequivocal retention of immunity as “boilerplate,” in need of the Court's reconciliation to avoid waiver, are unpersuasive. (See Opp'n 2.) The Court may not “resolve any ambiguity” as Tetra Tech suggests—a waiver of sovereign immunity must be clear and unequivocal. Kiowa, 523 U.S. at 758–59, 118 S.Ct. 1700; Maxwell, 708 F.3d at 1087; Miller, 705 F.3d at 923. Thus, the need to “resolve any ambiguity” defeats Tetra Tech's suggestion of waiver.
Further, as in Miller and Demontiney, none of the other provisions present in C & L that amounted to clear waiver are present here. Mechoopda agreed to “meet and confer ․ to try to arrive at a mutually agreeable resolution of the dispute.” (PSA § IV.F.) The Dispute Resolution provides the timing and procedures to effectuate that goal and to maintain the confidentiality of any settlement discussions. Unlike C & L, the provision here does not contemplate arbitration at all, let alone binding arbitration, judicial enforcement of a final arbitration award, or entry of judgment thereon. Nor does it reflect an unequivocal intent to submit to the jurisdiction of a particular court. The Dispute Resolution provision falls far short of the clear waiver in C & L.
None of the language Tetra Tech artfully highlights alters this conclusion. (See Opp'n 1, 6–7.) Tetra Tech emphasizes that the meet and confer process would occur “[p]rior to commencing litigation”; and “[a]ny court of competent jurisdiction shall have the authority to enforce this provision and to determine if the meet and confer process has been satisfied.” (Id. at 1; PSA § IV.F.) Tetra Tech also offers testimony from a Mechoopda representative that the provision was meant to provide an alternative to “having to go to court.” (Opp'n 7.) Tetra Tech contends this indicates Mechoopda's consent to suit. (See id. at 10–11.) But these clauses and testimony could just as easily suggest Mechoopda's possible future decision to waive its immunity and go to court as they could Mechoopda's consent to court jurisdiction under the PSA. Tetra Tech points to nothing that clearly and unequivocally confers jurisdiction on a particular court. At best, the clauses and testimony adduced are ambiguous and therefore insufficient to effect a clear waiver of sovereign immunity.
In sum, as in Miller, the absence of any of the provisions present in C & L that amounted to waiver leads the Court to conclude that the Dispute Resolution provision is not a clear, unambiguous, and unequivocal waiver of Mechoopda's tribal sovereign immunity. See 705 F.3d at 925–26. As in Demontiney, Mechoopda's express retention of immunity in the PSA clearly indicates that Mechoopda did not waive its sovereign immunity when it executed the PSA. See 255 F.3d at 812–13. In light of the strong presumption against waiver, the lack of clear waiver in the PSA, and Mechoopda's express retention of sovereign immunity, the Court finds Mechoopda is immune from Tetra Tech's suit and the Court lacks jurisdiction.5
B. Jurisdictional Discovery
Tetra Tech requests leave to conduct additional jurisdictional discovery, “in the event this Court is not fully satisfied that it has subject matter jurisdiction.” (Opp'n 19–20.)
“A district court is vested with broad discretion to permit or deny discovery.” Laub v. U.S. Dep't of Interior, 342 F.3d 1080, 1093 (9th Cir. 2003). “Discovery may be appropriately granted where pertinent facts bearing on the question of jurisdiction are controverted or where a more satisfactory showing of the facts is necessary.” Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008) (internal quotations and citation omitted). On the other hand, a request for discovery may be denied where it is “based on little more than a hunch that it might yield jurisdictionally relevant facts,” id. (citing Butcher's Union Local No. 498 v. SDC Inv., Inc., 788 F.2d 535, 540 (9th Cir. 1986)), or “when it is clear that further discovery would not demonstrate facts sufficient to constitute a basis for jurisdiction,” Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406, 430 n.24 (9th Cir. 1977). “[T]he burden is on the party seeking to conduct additional discovery to put forth sufficient facts to show that the evidence sought exists.” Dichter-Mad Fam. Partners, LLP v. U.S., 709 F.3d 749, 751 (9th Cir. 2013) (quoting Gager v. United States, 149 F.3d 918, 922 (9th Cir. 1998)).
Tetra Tech has had a meaningful opportunity to conduct discovery and develop evidence related to jurisdiction. The parties stipulated to conduct jurisdictional discovery and Mechoopda responded to Tetra Tech's Interrogatories, Requests for Production of Documents, and produced a witness for a Rule 30(b)(6) Deposition. (See Opp'n 8 n.3; Decl. of Brian M. Noh ¶¶ 3–7, Exs. A–C, ECF No. 36-1; Reply 10–11.) The parties submitted ample evidence related to the Court's jurisdiction and, despite the benefit of this early discovery, Tetra Tech has failed to demonstrate or persuade the Court that Mechoopda clearly waived its sovereign immunity. Tetra Tech does not offer so much as a “hunch” that additional evidence actually exists that might yield jurisdictionally relevant facts. Nor does Tetra Tech identify what further evidence it would seek. Rather, it merely repeats the same argument rejected above, that the Dispute Resolution provision constitutes a waiver of sovereign immunity. (See Opp'n 20 (“As stated above, the DRP constitutes an effective waiver of [Mechoopda]’s sovereign immunity.”).) This is plainly insufficient to satisfy Tetra Tech's burden here. See Boschetto, 539 F.3d at 1020 (affirming denial of request for jurisdictional discovery that “was based on little more than a hunch”); Klein v. Williams, 714 F. App'x 631, 634 (9th Cir. 2017) (affirming denial of discovery where plaintiff “failed to explain what he sought to discover”).
In light of the evidence supporting Mechoopda's clear retention of sovereign immunity and lack of clear waiver, as well as Tetra Tech's failure to explain what additional evidence it hopes to discover, the Court sees no benefit to additional discovery on the issue. As such, the Court denies Tetra Tech's request for additional jurisdictional discovery.
For the reasons discussed above, the Court GRANTS Mechoopda's Motion to Dismiss. (ECF No. 34.)
IT IS SO ORDERED.
1. Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15.
2. Mechoopda also moves to dismiss for lack of personal jurisdiction under Rule 12(b)(2). (Mot. 8.) In light of the Court's conclusion that it lacks subject matter jurisdiction because Mechoopda has not waived its tribal sovereign immunity, the Court does not reach Mechoopda's additional arguments.
3. Tetra Tech does not argue that Congress has abrogated Mechoopda's tribal sovereign immunity with respect to its claims. As such, the Court does not contemplate congressional abrogation.
4. (See Mot. 13; Opp'n 15.) The Court notes that the Tribal Monitor Scope of Work, Exhibit A to the PSA, also includes a provision that states “nothing herein shall be construed as a waiver of ․ the Tribe's ․ sovereign rights as a federally recognized Indian Tribe.” (PSA Ex. A, Scope of Work.) However, neither party raises this provision, so the Court does not consider it.
5. As the Court finds Mechoopda has not waived tribal sovereign immunity, the Court need not reach Mechoopda's other arguments concerning the Court's jurisdiction and declines to do so.
OTIS D. WRIGHT, II, UNITED STATES DISTRICT JUDGE
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Docket No: Case No: 2:19-CV-07973-ODW (PLAx)
Decided: February 09, 2021
Court: United States District Court, C.D. California.
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