United States District Court, W.D. Oklahoma
FSS DEVELOPMENT CO., LLC, a Delaware limited liability company, Plaintiff,
APACHE TRIBE OF OKLAHOMA, a federally recognized Indian tribe, et al., Defendants.
L. RUSSELL, UNITED STATES DISTRICT JUDGE.
the Court are Defendants' Motion to Stay Pending
Exhaustion of Tribal Court Remedies (Doc. 21) and
Defendants' Motion to Dismiss (Doc. 22). Plaintiff FSS
alleges that on December 20, 2010, it (1) entered into an
agreement with Defendant Apache Tribe of Oklahoma (“the
Tribe”) to develop a casino called the Red River
Project on Apache land, and (2) loaned the Tribe $2.2 million
to cover development expenses in exchange for a promissory
note. In the summer of 2017, Plaintiff sued the Tribe, the
Apache Business Committee (“ABC”) that allegedly
negotiated the contracts for the Tribe, four individual ABC
members, and a Tribe consultant for tortious interference
with contract, breach of contract, and declaratory judgment.
The Tribe then sued FSS in Apache tribal court for
declaratory judgment that the agreements are void under
federal and tribal law and, alternatively, for breach of
contract. The Court, concerned about subject matter
jurisdiction, ordered a hearing on three issues to determine
whether to dismiss or stay the case.
main issue is complete preemption initiated by
Defendants' Indian Gaming Regulatory Act
(“IGRA”) defenses-the parties agree that the
Tribe defeats diversity jurisdiction, but dispute whether the
IGRA's completely preemptive scope provides the Court
with federal question jurisdiction. For the following
reasons, the Court dismisses Plaintiff's claims against
the Tribe and ABC and stays Plaintiff's tortious
interference claim against the individual Defendants pending
exhaustion of tribal remedies.
Court takes as true the following allegations contained in
the Amended Complaint, Doc. 8. The Apache Tribe vested the
ABC with authority to engage FSS to assist the Tribe in
developing the Red River Project, a Class II and III gaming
facility on Apache land near the Oklahoma-Texas border. Doc.
8, at 3-4; Doc. 8-3. On December 20, 2010, FSS allegedly
entered into a development agreement (Doc. 8-1) and executed
a promissory note (Doc. 8-2) with the Tribe through its
representative, ABC Chairman Louis Maynahonah. Doc. 8-3, at
development agreement provided FSS with exclusive development
rights, a “Construction Management Fee” equal to
4% of the total amount of the Red River Project's
construction and development costs, and 12% of the net
winnings from the Project, among other benefits. See
Doc. 8-1, at 19-20. In return, FSS promised to make an
interim loan of $2.2 million and to “obtain financing
for the design, development, construction and initial
equipping of the Gaming Facility, and to furnish technical
experience and expertise . . . .” Id. at 2.
The agreement contained a limited waiver of sovereign
immunity, consent to jurisdiction in the U.S. District Court
for the Western District of Oklahoma, and guarantee that the
Tribe will not revoke or limit its sovereign immunity waiver.
Id. at 30-32. It also contained various
representations, warranties, and covenants intended to ensure
enforceability of the contract under tribal and federal law.
See generally Id. One provision states that the
agreement “shall not be construed as a management
contract” under the IGRA and the parties agree that
nothing in the agreement “is intended to grant”
FSS “management authority or responsibilities”
with respect to the Red River Project. Id. at 9. The
parties also “agree[d] that nothing [in the development
agreement or interim promissory note] is intended to grant or
may be construed to grant [FSS] . . . any proprietary
interest whatsoever” in the Project. Id. at 9.
to say, the agreement did not work out as planned. After
allegedly devoting substantial resources to successfully
meeting its development obligations, FSS claims that
Defendants failed to obtain required approval for title and
heirship issues, submit a lease to the Bureau of Indian
Affairs, or review term sheets for financing. Doc. 8, at
9-11. The dispute appears to originate from turnover in ABC
leadership and an agreement between a third-party management
group and individual members of the ABC, Defendants herein,
to sabotage the Red River Project for the benefit of a
competing gaming venture. Id. at 10- 14; Doc. 8-5,
at 1-2. On October 4, 2016, a lawyer for the Tribe wrote to
FSS, claiming that the development agreement is invalid and
unenforceable and, alternatively, providing notice of
FSS's default per the agreement's terms. Doc. 8-4
(citing Doc. 8-1, at 25-26). FSS responded in kind later that
month with notice of the Tribe's default. Doc. 8-5
(citing Doc. 8-1, at 23-25).
16, 2017, Plaintiff FSS sued Defendants the Tribe, the ABC,
and Bobby Komardley, an ABC member, in this court. Doc. 1.
Plaintiff amended its complaint on September 5 to add ABC
members Cheryl Wetselline, Justus Perry, and Donald
Komardley, as well as Tom Julian, a consultant for the Tribe.
Doc. 8. The Amended Complaint alleges:
•Count 1: Defendants Julian and individual ABC members
tortiously interfered with the development
• Count 2: FSS is entitled to declaratory judgment that:
• (a) the development agreement is valid and
• (b) FSS is not in default of the agreement;
• (c) the development agreement can only be rescinded in
accordance with its terms;
• (d) the Tribe and the ABC are contractually prohibited
from taking action, except as prescribed by the development
agreement, that directly or indirectly modifies or terminates
• (e) the Tribe and the ABC are contractually required
to “take all actions necessary to ensure that [the]
Agreement shall remain in full force and effect at all
• Count 3: the Tribe breached the development agreement
Id. at 14-19.
September 25, 2017, the Tribe sued FSS in the Court of Indian
Offenses for the Apache Tribe of Oklahoma in Anadarko,
Oklahoma (“Tribal Court”). Doc. 21-1. The
Tribe seeks a declaratory judgment from the Tribal Court that
the development agreement is void or unenforceable because
(1) the Tribe did not validly waive sovereign immunity or
delegate authority to execute the agreement under the Apache
Tribe Constitution, nor did Chairman Maynahonah actually sign
the development agreement; (2) the U.S. Secretary of the
Interior did not approve the development agreement as
required under federal law; (3) the development agreement is
an unapproved management contract under the IGRA; (4) the
development agreement violates the IGRA's requirement
that the Tribe retain sole proprietary interest in any gaming
facility; (5) FSS has not and cannot obtain a gaming license
from the Apache Gaming Commission. Id. at 5-11.
Alternatively, if the Tribal Court does find the agreement
valid under federal and tribal law, the Tribe claims that FSS
breached the contract. Id. at 12.
move to dismiss Plaintiffs suit under Federal Rules of Civil
Procedure 12(b)(1) (for lack of subject matter jurisdiction),
12(b)(6) (for failure to state a claim), and 12(b)(7) (for
failure to join a party who cannot be joined). Doc. 22.
Alternatively, if the Court finds there is subject matter
jurisdiction, Defendants move to dismiss or stay ...