United States District Court, D. New Mexico
D. Maldegen Comeau, Maldegen, Templeman & Indall, L.L.P.
Santa Fe, New Mexico and Andrew D. Zaron Ellen Ross Belfer
Jeremy L. Kahn León Cosgrove LLP Coral Gables, Florida
Attorneys for the Plaintiff.
J. Van Amberg C. Bryant Rogers VanAmberg, Rogers, Yepa,
Abeita & Gomez, LLP Santa Fe, New Mexico Attorneys for
MEMORANDUM OPINION AND ORDER
MATTER comes before the Court on Defendant Nambe
Pueblo Development Corporation's Motion to Dismiss, filed
October 1, 2018 (Doc. 14)(“Motion”). The Court
held a hearing on December 21, 2018. The primary issues are:
(i) whether the Court has subject matter jurisdiction over
the case, wherein Plaintiff World Fuel Services, Inc. -- a
non-Indian party --asserts claims against Defendant Nambe
Pueblo Development Corporation (“Nambe Corp.”),
an Indian party; (ii) whether the Court should consider the
Motion as a rule 12(b)(1) or a rule 12(b)(6) of the Federal
Rules of Civil Procedure motion and, based on the appropriate
rule, whether the Court may consider an affidavit and other
documents affixed to the Motion; (iii) whether Nambe Corp.
and Nambe Pueblo are entitled to, or have waived, Tribal
sovereign immunity; and (iv) whether World Fuel, who entered
a Motor Fuel Supply Agreement (dated May 17, 2017), filed
September 11, 2018 (Doc. 9-1)(“Agreement”), with
an Indian party, Nambe Corp., regarding fuel sales on Nambe
Pueblo lands, must exhaust Tribal remedies before seeking
relief in federal district court on its demand for
arbitration of a dispute arising from the Agreement, when its
claim arises under the Federal Arbitration Act, 9 U.S.C.
§§ 1-16 (“FAA”), but there is no
intra-Tribal dispute and there is no attempt to circumvent a
pending parallel proceeding in Nambe Pueblo Tribal Court. The
Court concludes that: (i) the Court has subject matter
jurisdiction based on diversity; (ii) the Court considers the
Motion under rule 12(b)(6) and, accordingly, does not rely on
the documents affixed to the Motion, but does consider the
documents attached to and referenced by the Complaint; (iii)
both Nambe Corp. and Nambe Pueblo are entitled to Tribal
sovereign immunity and Nambe Corp., but not Nambe Pueblo,
waived Tribal sovereign immunity for the purposes of
arbitration; and (iv) World Fuel must exhaust Tribal remedies
before seeking relief in federal district court on its demand
for arbitration, although there is no intra-Tribal dispute
and there is no attempt to circumvent a pending parallel
proceeding in Tribal Court, because no exceptions to the
Tribal exhaustion doctrine's application apply and the
Nambe Pueblo Tribal Court has colorable jurisdiction over the
case. Accordingly, the Court stays the case pending World
Fuel's exhaustion of Tribal Court remedies.
Court draws its facts from World Fuel's Petition to
Compel Arbitration Pursuant to Section 4 of the Federal
Arbitration Act, filed August 31, 2018 (Doc.
1)(“Complaint”). World Fuel then filed a Notice
of Errata, in which World Fuel “respectfully notifies
the Court and all parties that the Petition to Compel
Arbitration Pursuant to Section 4 of the Federal Arbitration
Act, filed electronically on August 31, 2018 and served on
September 6, 2018, was inadvertently filed and served without
Exhibits 1, 2 and 3.” Notice of Errata at 1, filed
September 11, 2018 (Doc. 9). Exhibit 1 is the Agreement,
see Agreement at 1; Exhibit 2 is the Federal
Corporate Charter Issued By the United States of America
Department of the Interior Bureau of Indian Affairs to the
Pueblo of Nambe for Nambe Pueblo Development Corporation at 6
(dated May 29, 1996), filed September 11, 2018 (Doc.
9-2)(“Federal Charter”), and Exhibit 3 is a
letter from World Fuel to Nambe Corp., addressed to Carlos
Vigil (“C. Vigil”),  in which World Fuel notifies
Nambe Corp. of a dispute based on unpaid taxes Nambe Corp.
allegedly owes to Alta Fuels under the Agreement, notifies
Nambe Corp. of a demand letter Alta Fuels sent to Nambe Corp.
demanding payment, and notifies Nambe Corp. of World
Fuel's demand that the parties use binding arbitration to
resolve the dispute. See Letter from Tim Bohall,
Vice President, Credit & Risk, World Fuel Services, Inc.,
to Carlos Vigil, Nambe Pueblo Development Corporation (dated
Aug. 8, 2018), filed September 11, 2018 (Doc.
9-3)(“Aug. 8, 2018 Letter”).
Court accepts World Fuel's factual allegations in the
Complaint, the Agreement, the Federal Charter, and the Aug.
8, 2018 Letter, as true for the limited purpose of deciding
the Motion. See Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009)(“Iqbal”)(clarifying the
“tenet that a court must accept as true all of the
[factual] allegations contained in a complaint”)(citing
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007)); Archuleta v. Wagner, 523 F.3d 1278, 1283
(10th Cir. 2008)(concluding that, in the motion to dismiss
posture, a court must “accept as true all well-pleaded
facts, as distinguished from conclusory allegations”).
Generally, a complaint's sufficiency must rest on its
contents alone. See Casanova v. Ulibarri, 595 F.3d
1120, 1125 (10th Cir. 2010); Gossett v. Barnhart,
139 Fed.Appx. 24');">139 Fed.Appx. 24, 25 (10th Cir. 2005)(unpublished)(“In
ruling on a motion to dismiss, the district court is limited
to the facts pled in the complaint.”). Emphasizing this
point, the United States Court of Appeals for the Tenth
Circuit, in Carter v. Daniels, 91 Fed.Appx. 83');">91 Fed.Appx. 83 (10th
Cir. 2004)(unpublished), states: “When ruling on a Rule
12(b)(6) motion, the district court must examine only the
plaintiff's complaint. The district court must determine
if the complaint alone is sufficient to state a claim; the
district court cannot review matters outside of the
complaint.” 91 Fed.Appx. at 85. There are three limited
exceptions to this general principle: (i) documents that the
complaint incorporates by reference, see Tellabs, Inc. v.
Makor Issues & Rights, Ltd., 551 U.S. 308, 322
(2007); (ii) “documents referred to in the complaint if
the documents are central to the plaintiff's claim and
the parties do not dispute the documents' authenticity,
” Jacobsen v. Deseret Book Co., 287 F.3d 936,
941 (10th Cir. 2002); and (iii) “matters of which a
court may take judicial notice, ” Tellabs, Inc. v.
Makor Issues & Rights, Ltd., 551 U.S. at 322.
See Brokers' Choice of Am., Inc. v. NBC Universal,
Inc., 861 F.3d at 1103 (holding that the district court
did not err by reviewing a seminar recording and a television
episode on a rule 12(b)(6) motion, which were “attached
to or referenced in the amended complaint, ” central to
the plaintiff's claim, and “undisputed as to their
accuracy and authenticity”). The Tenth Circuit has held
that written documents attached to a complaint as exhibits
are “considered part of the complaint and may be
considered in a Rule 12(b)(6) dismissal, ” unless the
documents are affidavits. Hall v. Bellmon, 935 F.2d
1106, 1112 (10th Cir. 1991)(citations omitted). The
Agreement, the Federal Charter, and the Aug. 8, 2018 Letter
are all attached to the Complaint as exhibits and none are
affidavits. See Notice of Errata at 1. World Fuel
does not dispute the authenticity of the Agreement, Federal
Charter,  or Aug. 8, 2018 Letter, and the Complaint
refers to all three. See Complaint ¶¶ 7,
10, 13, at 2-3. Following Hall v. Bellmon, the
Agreement, the Federal Charter, and the Aug. 8, 2018 Letter
are considered part of the Complaint and the Court may
consider them in deciding the Motion.
that understanding, World Fuel is a corporation organized and
existing under the laws of the State of Texas, qualified to
do business in the State of New Mexico, and with its
principal place of business in the County of Miami-Dade,
State of Florida. See Complaint ¶ 1, at 1.
Nambe Corp. is a “federally chartered corporation
organized under the laws of the United States, pursuant to 25
U.S.C. § 477, with its principal place of business
located in Santa Fe, New Mexico.” Complaint ¶ 3,
at 1. Nambe Pueblo wholly owns Nambe Corp. See
Federal Charter at 2 (“The Pueblo of Nambe is the sole
shareholder and no physical shares [of Nambe Corp.] are
issued.”). The amount in controversy exceeds $75,
000.00. See Aug. 8, 2018 Letter at 1 (stating that
Nambe Corp. owes World Fuel unpaid taxes of $1, 929, 486.18).
The Court has jurisdiction over the Complaint based on
diversity, pursuant to 28 U.S.C. § 1332(a)(1),
“because (a) the matter in controversy exceeds the sum
or value of $75, 000.00, exclusive of interest and costs, and
(b) World Fuel is a citizen of the States of Texas and
Florida, and [Nambe Corp.] is a citizen of the State of New
Mexico.” Complaint ¶ 5, at 2. Venue is proper
pursuant to 28 U.S.C. § 1391(b)(1), because Nambe Corp.
resides in New Mexico and the events giving rise to the
Complaint occurred in New Mexico. See Complaint
¶ 6, at 2.
Fuel is engaged in, among other things, supplying petroleum
fuel to distributors. See Complaint ¶ 2, at 1.
Nambe Corp. is engaged in the tourism and gasoline business,
and operates the Nambe Falls Travel Center, where Nambe Corp.
operates a gasoline station. See Complaint ¶ 4,
at 2. World Fuel and Nambe Corp. entered into a ten-year
contractual relationship with a term from May 17, 2017,
through May 16, 2027, providing that Nambe Corp. would
purchase World Fuel branded and unbranded fuels, including
alternative or biofuels (collectively, “Motor
Fuel”) from World Fuel, for its Nambe Falls Travel
Center gasoline station, located on Tribal lands. Complaint
¶ 7, at 2; Agreement ¶ A, at 1. The parties
memorialized the contractual agreement in the Agreement,
which contains an arbitration provision, Agreement ¶
18(a), at 7, and a sovereign immunity waiver, Agreement
¶ 18(b), at 8. See Complaint ¶¶ 8-9,
arbitration provision states in relevant part:
If any dispute arises between the parties over or in
connection with this Agreement and the parties, after good
faith efforts, are unable to resolve the dispute between
themselves, either party may serve notice in writing to the
other of such dispute and demand that it be resolved through
binding arbitration, giving the other party the name of an
arbitrator of the noticing party's choice.
¶ 18(a), at 7. See Complaint ¶ 8, at 2.
The sovereign immunity waiver provision states, in relevant
Nothing in this Agreement is or shall be deemed to be a
waiver of the Pueblo's sovereign immunity from suit,
provided however, that Customer [Nambe Corp.] agrees to waive
its immunity protection for the limited and sole purposes of
compelling arbitration or enforcing any binding arbitration
decision rendered pursuant to the terms and conditions of
this Agreement by any court having jurisdiction over the
parties and the subject matter and for purposes of any such
¶ 18(b), at 8. See Complaint ¶ 9, at 2-3.
The Federal Charter contains a “sue and be sued”
clause, providing that Nambe Corp. is expressly authorized
and empowered “[t]o sue and be sued in its Corporate
name in courts of competent jurisdiction within the United
States.” Complaint ¶ 10, at 3 (quoting Federal
Charter § 3.01(b), at 2).
about May, 2018, “a dispute arose between World Fuel
and [Nambe Corp.] regarding unpaid taxes owed by [Nambe
Corp.] to World Fuel pursuant to the Agreement.”
Complaint ¶ 11, Agreement ¶ A, at 1. at 3. On July
27, 2018, World Fuel issued an invoice for the unpaid taxes,
and Nambe Corp. refused to pay. See Complaint ¶
12, at 3. On August 8, 2018, World Fuel provided Nambe Corp.
formal notice of the dispute and a demand that, pursuant to
the Agreement, the dispute be resolved through binding
arbitration. See Aug. 8, 2018 Letter at 1. The Aug.
8, 2018 Letter states, in relevant part:
In accordance with section 18(a) of the Agreement, Alta gives
[Nambe Corp.] formal notice of the above-mentioned dispute
and demands that the dispute be resolved through binding
arbitration. As one of the three arbitrators to hear and
decide the dispute, Alta selects the Honorable Bruce D.
Black, the former United States District Judge for the
District of New Mexico. Under the terms of the Agreement,
[Nambe Corp.] must select a second arbitrator within ten days
of the receipt of this notice, and then Judge Black and
[Nambe Corp.]'s selected arbitrator will jointly appoint
a third person to serve on the arbitration panel. The panel
shall convene as soon as practicable, and hear and decide the
dispute within 60 days of this notice to arbitrate.
Aug. 8, 2018 Letter at 1. See Complaint ¶ 13,
at 3 (internal quotation marks omitted)(quoting Aug. 8, 2018
Letter at 1, and stating that, to date, Nambe Corp. has not
responded to the Aug. 8, 2018 Letter).
Fuel's Complaint raises a single claim for relief against
Nambe Corp. See Complaint ¶ 14, at 3. World
Fuel alleges that the Agreement is valid and enforceable, and
that Nambe Corp. agreed to its terms -- including the
arbitration provision. See Complaint ¶¶
15-16, at 3. World Fuel alleges that the parties' dispute
is “over or in connection with [the] Agreement, ”
and falls within the arbitration provision's scope.
Complaint ¶ 17, at 3 (quoting Agreement ¶ 18(a), at
7). World Fuel alleges that “[a]ll conditions precedent
to the maintenance of this [Complaint] have been performed,
have been waived, or have occurred.” Complaint ¶
18, at 4. World Fuel alleges that, pursuant to § 4 of
the FAA, the Court has the authority to compel Nambe Corp. to
arbitrate the parties' dispute, and World Fuel requests
that the Court issue an Order compelling arbitration pursuant
to the Agreement's terms. See Complaint ¶
19, at 4.
Corp. moves the Court to dismiss the case, alleging that
World Fuel “is required to exhaust its tribal remedies
in the Nambe Tribal Courts, including its designated
appellate court, the Southwest InterTribal Court of
Appeals.” Motion at 1. Nambe Corp. alleges that, when
required to answer in the “appropriate court, ”
it will deny many of World Fuel's allegations, will
otherwise show that its actions were justified, and will
raise other dispositive defenses, including “Nambe
Corp.'s unwaived sovereign immunity.” Motion at 2.
Nambe Corp. contends that, under the Tribal exhaustion
doctrine, “the proper forum for addressing
Plaintiff's demand for arbitration and Nambe Corp.'s
legal defenses (and the merits of Plaintiff's claims) in
the first instance is the Nambe Tribal Courts.” Motion
The R. Vigil Aff.
Motion, Nambe Corp. affixes the R. Vigil Aff. See
Affidavit of Randy Vigil, ¶ 1, at 1 (dated Sept. 27,
2018), filed October 1, 2018 (Doc. 14-1)(“R. Vigil
Aff.”). R. Vigil states that he is an enrolled member
of Nambe Pueblo and is currently the Operations Manager of
the Los Alamos National Laboratory's Utilities
Department, a position that he has held since August, 2008.
R. Vigil Aff. ¶ 1, at 1. R. Vigil states that he has
been a member of Nambe Corp.'s Board of Directors since
2002 and served as the Board's Secretary for many years.
See R. Vigil Aff. ¶ 2, at 1. R. Vigil states
that, since 2002, he has served as the Board's acting
Secretary, and currently serves as a Board member and as the
Board's Treasurer. See R. Vigil Aff. ¶ 2,
at 1. R. Vigil states that, as Board Secretary, he is the
custodian of the Board's records, prepares and maintains
the agendas and minutes of the Board's meetings, and
maintains copies of Nambe Corp.'s corporate charter and
of Board-adopted resolutions. See R. Vigil Aff.
¶ 3, at 1. R. Vigil asserts that the version of Nambe
Corp.'s federal charter, which the Secretary of the
Interior approved and the Nambe Pueblo Tribal Council
ratified, and which World Fuel attaches to the Complaint, is
the 1994 charter and that R. Vigil attaches the charter
currently in force, the 2007 charter, to his affidavit.
See R. Vigil Aff. ¶ 5, at 2.
Vigil states that fuel sales transactions between Alta
Fuels/World Fuel and Nambe Corp. related to the Nambe Travel
Center have continued from 2009 until the present.
See R. Vigil Aff. ¶ 11, at 3. R. Vigil states
that, on November 10, 2008, the Board approved a contract
with Alta Fuels for fuel sales at the Nambe Travel Center.
See R. Vigil Aff. ¶ 6, at 2. On April 8, 2009,
Alta Fuels entered into that valid and binding contract with
Nambe Corp., which Herbert Yates, Nambe Corp.'s Chief
Executive Officer, executed. See R. Vigil Aff.
¶ 6, at 2. R. Vigil attests that the Board understood
§§ 301(e) and 701 of the Federal Charter to require
its approval of the contract. See R. Vigil Aff.
¶ 6, at 2. R. Vigil states that, on March 12, 2012, upon
the 2009 contract's expiration, Alta Fuels entered into
another contract for fuel sales with Nambe Corp., which Yates
signed, but which the Board did not approve. See R.
Vigil Aff. ¶ 7, at 2. R. Vigil asserts that the Board
“has never recognized” the 2012 contract as
binding on Nambe Corp. R. Vigil Aff. ¶ 7, at 2. When the
2012 contract expired in 2017, World Fuel -- having acquired
Alta Fuels -- entered into another contract, dated May 17,
2017, for fuel sales with Nambe Corp., this time which Nambe
Board President C. Vigil signed. See R. Vigil Aff.
¶ 8, at 3. R. Vigil attests that this 2017 contract, on
which World Fuel bases its arbitration demand, “was
also done without the knowledge or approval of the [Nambe
Corp.] Board.” R. Vigil Aff. ¶ 8, at 3. R. Vigil
states that the Board delegated no authority to C. Vigil to
execute the Agreement, and that C. Vigil signed without Board
approval. See R. Vigil Aff. ¶ 9, at 3. R. Vigil
asserts that, based on his own knowledge and review of Board
records and documents, C. Vigil never presented the Agreement
to the Board for consideration or approval, and, when the
Board first reviewed the Agreement in 2018, after the excise
tax dispute with World Fuel arose,  the Board expressly
repudiated it. See R. Vigil Aff. ¶ 10, at 3.
Vigil attests that World Fuel sent Nambe Corp. an arbitration
demand in the Aug. 8, 2018 Letter attached to the Complaint.
See R. Vigil Aff. ¶ 16, at 4. R. Vigil states
that, although the Complaint's ¶ 13 states
otherwise, Nambe Corp. authorized a response to the Complaint
and sent it by letter on August 9, 2018. See R.
Vigil Aff. ¶ 17, at 4.
Memorandum in Support of the Motion to Dismiss, filed October
1, 2018 (Doc. 15)(“Memo.”), Nambe Corp. states
the facts which the R. Vigil Aff. describes. See
Memo. at 1-5. Nambe Corp. asserts that two triggers for
Montana v. United States, 450 U.S. 544
(1981)(“Montana”) jurisdiction exist:
first, that each fuel transaction “between Alta
Fuels/World Fuel and NPDC which has occurred at the Travel
Center on Nambe Indian Reservation” is “a
voluntary commercial consensual relationship . . . even in
the absence of any separate written contracts between the
parties, ” and second, that “disputes arising
after the expiration of a written voluntary consensual
relationship involving commercial use of (and activity on)
tribal land will independently anchor tribal
jurisdiction.” Memo. at 5. Nambe Corp. cites to
Water Wheel Camp Recreational Area, Inc. v. LaRance,
642 F.3d 802, 805, 817-19 (9th Cir. 2011), in which the
United States Court of Appeals for the Ninth Circuit held
that a Tribal Court had Montana jurisdiction
“to adjudicate tort claims against non-Indian corporate
lessor and its owner/manager seeking money damages, ”
based on their “consensual relationship evidenced by
[an] expired land lease and subsequent disputes . . .
.” Memo. at 5 (alteration in original)(internal
quotation marks omitted)(quoting Water Wheel Camp Rec.
Area, Inc. v. LaRance, 642 F.3d at 805, 817-19).
Corp. asserts that, under the Williams v. Lee, 358
U.S. 217 (1959), test, because World Fuel, the non-Indian
party, is the Plaintiff and not the Defendant, the Nambe
Pueblo Tribal Court and the Southwest InterTribal Court of
Appeals are the appropriate forums for adjudication of
disputes between World Fuel and Nambe Corp. based on fuel
sales at the Nambe Travel Center. See Memo. at 5.
Nambe Corp. asserts that the Tenth Circuit has adopted the
Williams v. Lee rule that “absent
Congressional authorization Tribal Courts rather than state
courts have jurisdiction to adjudicate suits filed by
non-Indians against Indian parties regarding disputes arising
from the Indian party's conduct within their Indian
Country.” Memo. at 5 (citing Navajo Nation v.
Dalley, 896 F.3d 1196, 1204-05 (10th Cir. 2018)). Nambe
Corp. asserts that the Williams v. Lee test is
independent of the Montana test, as the Honorable
Curtis LeRoy Hansen, Senior United States District Judge for
the District of New Mexico explained in Fine Consulting,
v. Rivera, 915 F.Supp.2d 1212, 1224 (D.N.M.
2013)(Hansen, J.). According to Nambe Corp., Montana
applies only when the non-Indian party is or would be a
Tribal Court defendant. See Memo. at 6. Nambe Corp.
contends that, “if Montana were otherwise
applicable, . . . the exercise of tribal jurisdiction over
this dispute would also be appropriate under that
test.” Memo. at 6.
Corp. argues that the Court must dismiss or stay World
Fuel's suit because of World Fuel's failure to
exhaust Tribal remedies. See Memo. at 6. Nambe Corp.
contends that National Farmers Union v. Crow Tribe of
Indians, 471 U.S. 845 (1985)(“National
Farmers”), and Iowa Mutual Insurance v.
LaPlante, 480 U.S. 9 (1987)(“Iowa
Mutual”), hold, subject to certain exceptions
which Nambe Corp. describes in a footnote but contends are
where a party seeks to secure a federal court ruling on a
civil cause of action arising on lands constituting a
federally recognized Tribe's Indian Country based on
voluntary transactions or other commercial relationships
between one of the parties to the dispute and a tribal
member, tribe or tribal entity of that tribe (or Pueblo), the
federal court must dismiss (or stay) the federal suit until
plaintiff has exhausted its tribal remedies -- so long as
there exist colorable Tribal Court jurisdiction over the
claims pled under Montana . . . and/or Williams
v. Lee . . . In this case, the tribal entity sued is
at 6-7. Nambe Corp. argues that the Supreme Court of the
United States has repeatedly reaffirmed the requirement that,
where there is at least a colorable claim that the federal
requirements for exercising Tribal jurisdiction over a
non-Indian party are met, the parties must exhaust Tribal
remedies as National Farmers and Iowa
Mutual require. See Memo. at 7 (citing
Atkinson Trading Co. v. Shirley, 532 U.S. 645
(2001); Strate v. A-1 Contractors, 520 U.S. 438
(1997)). Nambe Corp. contends that the Tenth Circuit has
reaffirmed the same Tribal exhaustion doctrine. See
Memo. at 7-8 (citing Norton v. Ute Indian Tribe of the
Uintah & Ouray Reservation, 862 F.3d 1236 (10th Cir.
2017); Valenzuela v. Silversmith, 699 F.3d 1199
(10th Cir. 2012); Crowe & Dunlevy, P.C. v.
Stidham, 640 F.3d 1140, 1149 (10th Cir. 2011);
Hartman v. Kickapoo Tribe Gaming Comm'n, 319
F.3d 1230, 1233 (10th Cir. 2003); Smith v. Moffett,
947 F.3d 442, 446 (10th Cir. 1991)). Nambe Corp. contends
that the Ninth Circuit, and the United States Courts of
Appeals for the First and Fifth Circuits have also reaffirmed
the Tribal exhaustion requirement. See Memo. at 8
(citing Stock W. Corp. v. Taylor, 964 F.2d 912, 920
(9th Cir. 1992) TTEA Corp. v. Ysleta Del Sur Pueblo,
181 F.3d 676 (5th Cir. 1999); Ninigret Dev. Corp. v.
Narragansett Indian Wetuomuck Hous. Auth., 207 F.3d 21,
31 (1st Cir. 2000)(“Ninigret”)).
Corp. contends that, even when a plaintiff seeks to compel
arbitration under the FAA or based on a binding arbitration
clause in an allegedly binding contract, the plaintiff must
still exhaust Tribal remedies. See Memo. at 9. Nambe
Corp. cites to several cases from other federal district
courts and Courts of Appeals, and in particular references
Bank One N.A. v. Shumake, 281 F.3d 507 (5th Cir.
2002)(“Bank One”). Nambe Corp. contends
that, in Bank One, the Fifth Circuit concluded that
the district court's duty to bar the plaintiff from
proceeding in district court based on diversity jurisdiction
until the plaintiff exhausted its Tribal remedies superseded
the court's duty to compel arbitration under the FAA.
See Memo. at 10. In Bank One, the Fifth
Circuit also concluded that, in accordance with Tribal law, a
Tribal court had to decide whether the parties involved had
actually approved and agreed to be bound by a contract
amendment which allegedly added a binding arbitration clause.
See Memo. at 10 (citing Bank One, 281 F.3d
Corp. asserts that, to satisfy its duty to exhaust Tribal
remedies, World Fuel must seek adjudication of all legal
questions bearing on its dispute with Nambe Corp. in the
Nambe Pueblo Tribal Court, including appellate review by the
Southwest InterTribal Court of Appeals. See Memo. at
10. Nambe Corp. contends that questions for the Nambe Pueblo
Tribal Court include “whether the 2017 contract
document upon which World Fuel bases its demand for
arbitration was lawfully executed and became a binding
contract under Nambe law and the terms of [Nambe Corp.]'s
corporate charter, ” and “whether the limited
waiver of immunity set out at § 301(b) of that charter
is applicable to the 2017 contract document [-- the Agreement
--] here at issue.” Memo. at 11. Nambe Corp. alleges
that § 301(b) does not apply to the Agreement, even if
the Agreement is valid, binding, and Board-approved, because
the Agreement contains no language involving “property
or income of the Corporation . . . specifically mortgaged,
pledged or assigned as collateral for particular corporate
debts or liabilities, ” Memo. at 11 (quoting Federal
Charter § 301(b)), and § 301(b) “only applies
to such contacts, ” Memo. at 11.
Corp. contends that the Nambe Pueblo Tribal Court must also
address whether “the unauthorized execution of
contracts containing immunity waivers by officials or
employees of a tribe or a § 477
corporation are not effective to create an
enforceable waiver of the tribe's or § 477
corporation's sovereign immunity.” Memo. at 12.
Nambe Corp. alleges that, if the 2017 contract “was
lawfully executed and became binding on [Nambe Corp.],
” then its arbitration and sovereign immunity waiver
provisions are also legally binding. Memo. at 13. Nambe Corp.
contends that, if, however, §§ 301(e) and 701 of
the Federal Charter require the Board to authorize and
approve the contract, and if the Board did not properly do
so, then the 2017 contract and its provisions are not binding
on Nambe Corp., and have never been effective. See
Memo. at 13. Nambe Corp. contends that the Nambe Pueblo
Tribal Court must address this issue first, before the Court.
See Memo. at 13.
Corp. next argues that the “Plaintiff's duty to
exhaust tribal remedies did not go away just because”
World Fuel brought its suit in federal court before Nambe
Corp. had an opportunity to raise a claim in the Nambe Pueblo
Tribal Court. Memo. at 14. Nambe Corp. contends that a
plaintiff's duty to exhaust Tribal remedies exists even
when no Tribal lawsuit is pending “at the time a
federal action is commenced.” Memo. at 14. Nambe Corp.
avers that this duty to exhaust exists especially where, as
here, “the party seeking to evade tribal jurisdiction
is a non-Indian Plaintiff seeking judicial relief against a
tribal entity for causes of action arising within that
Tribe's Indian Country, as to which it has long been
settled that Tribal Courts are the appropriate forums for
resolving such disputes.” Memo. at 14.
Corp. next avers that the Nambe Pueblo Tribal Court and the
Southwest InterTribal Court of Appeals have colorable
jurisdiction to adjudicate all of World Fuel's claims.
See Memo. at 14. Nambe Corp. states, in support of
this assertion, that its headquarters and travel center are
located on Nambe Pueblo lands, that all actions of which
World Fuel complains occurred on Nambe Pueblo lands, and that
the Nambe Tribal Code confers jurisdiction on Nambe Pueblo
Tribal Courts to hear and decide civil disputes arising from
Nambe Corp.'s actions or inactions occurring on Nambe
Pueblo lands. See Memo. at 15. Nambe Corp. contends:
Under Williams v. Lee, where a cause of action
arises on lands constituting a tribe's Indian country and
involves a non-member plaintiff suing a tribal defendant,
based on alleged civil wrongs committed by the Indian
defendant on the reservation in derogation of the rights of
the non-Indian plaintiff, the propriety of Tribal Court
jurisdiction to adjudicate such claim under federal law is
at 16. Nambe Corp. contends that in Nevada v. Hicks,
533 U.S. 353, 357 n.2 (2001)(“Hicks”),
the Supreme Court noted that “the typical case in which
the court has addressed and upheld the exercise of tribal
jurisdiction” has involved claims against Tribal
defendants. Memo. at 17. Nambe Corp. contends that, while
Hicks ruled that Tribal Court “could not
adjudicate” tort or 42 U.S.C. § 1983 claims
against state officers in cases “filed by tribal
members against those officers based on their on-reservation
conduct carried out while on duty, ” Hicks did
not otherwise undermine “the existence of Tribal Court
jurisdiction to adjudicate civil claims filed by non-members
against tribal defendants” under the Williams v.
Lee test. Memo. at 17.
Corp. argues that, after Plains Commerce Bank v. Long
Family Land & Cattle Co., 554 U.S. 316 (2008),
see Memo. at 18, the “Montana
analysis is controlling in tribal jurisdiction cases, with
party alignment in the Tribal Court action as the most
important factor to be weighed in determining the application
of Montana's rule and exceptions to the case at
hand, ” Memo. at 20. Nambe Corp. contends that, where
the non-Indian party is the plaintiff, Williams v.
Lee controls in lieu of Montana. See
Memo. at 20. Nambe Corp. argues that, under the Williams
v. Lee test, Nambe Pueblo Tribal Courts have colorable
jurisdiction over all of World Fuel's claims. Moreover,
according to Nambe Corp., even if Nambe Corp. were the
plaintiff, under the Montana test, the Nambe Pueblo
Tribal Court has colorable jurisdiction over all of World
Fuel's claims. Memo. at 20-21. Nambe Corp. also argues
that National Farmers and Iowa Mutual
require World Fuel to pursue their claims in the Nambe Pueblo
Tribal Court, “thereby exhausting their tribal remedies
and this Court is required to dismiss or stay Plaintiffs'
action in this Court.” Memo. at 20-21.
Fuel responds. See Petitioner's Opposition to
Respondents Motion to Dismiss, filed October 29, 2018 (Doc.
22)(“Response”). World Fuel begins by asserting
that, in enacting the FAA, Congress sought to “control
the procedures employed by a federal court, and thus ensure
that petitions to compel arbitration would be expeditious
summary proceedings.” Response at 1. World Fuel argues
that, by insisting on Tribal exhaustion, Nambe Corp.,
contrary to Congress' intent in enacting the FAA,
“seeks to drag out the litigation regarding the
preliminary question of whether to enforce the parties'
arbitration agreement in at least two tiers of Tribal Courts
before World Fuel may seek enforcement in this Court.”
Response at 1-2. World Fuel contends that Congress has
empowered only federal courts to hear petitions under the
FAA's § 4, and that the 2017 contract's
arbitration clause contemplates resolving disputes in a
non-Tribal forum. See Response at 2. World Fuel
contends that arbitration agreements with Tribes and Tribal
entities would be meaningless if it were the law “that
every time a party and a tribal corporation contractually
agree to arbitration, the tribal corporation has a virtual
veto power over the contractually-agreed-to forum through
invocation of the tribal exhaustion doctrine.” Response
Fuel avers that the Court should deny the Motion for several
reasons. See Response at 2. First, World Fuel argues
that two threshold issues bar the Court from considering the
exhaustion argument: (i) arbitrators, not a court, should
determine whether World Fuel has satisfied conditions
precedent to arbitration, including Tribal exhaustion, and
whether the parties' agreement is valid; and (ii) the
Motion “improperly relies on matters extrinsic to World
Fuel's petition and allegations contrary to World
Fuel's factual allegations.” Response at 2. World
Fuel asserts that, even if the Court reaches the merits of
Nambe Corp.'s Tribal exhaustion argument, it must deny
the Motion, because: (i) “especially” where a
petition's filing is not “an attempt to circumvent
the tribal entity's invocation of a parallel proceeding
in Tribal Court and the underlying controversy is not an
intra-tribal dispute, ” the Tribal exhaustion doctrine
is inapplicable to petitions to compel arbitration under the
FAA's § 4; (ii) the parties' arbitration clause
waives any otherwise applicable Tribal exhaustion rule; and
(iii) there is no pending proceeding in the Nambe Tribal
Courts, rendering the Tribal exhaustion doctrine
inapplicable. Response at 3.
Fuel describes the arbitration clause, which states:
If any dispute arises between the parties over or in
accordance with this Agreement and the parties, after good
faith efforts, are unable to resolve the dispute between
themselves, either party may serve notice in writing to the
other of such dispute and demand that it be resolved through
at 2 (quoting Agreement ¶ 18(a), at 7). World Fuel
states that the arbitration clause “provides that the
arbitration panel ‘shall convene as soon as
practicable' and that the panel ‘shall hear and
decide the dispute within sixty (60) days of the notice to
arbitrate'” “based on the laws of the State
of New Mexico.” Response at 3-4 (quoting Agreement
¶ 18(a), at 7).
Fuel contends that the arbitration provision expressly waives
Nambe Corp.'s immunity from suit “for the limited
and sole purposes of compelling arbitration or enforcing any
binding arbitration decision . . . by any court
having jurisdiction over the parties and the subject matter
and for purposes of any such arbitration provisions.”
Response at 3 (emphasis in Response)(quoting Agreement ¶
18(b), at 7). World Fuel also notes that the Federal Charter
contains a “sue and be sued” clause, stating that
Nambe Corp. “is expressly authorized and empowered . .
. [t]o sue and be sued in its Corporate name in courts of
competent jurisdiction within the United States.”
Response at 4 (quoting Federal Charter § 3.01(b), at 2).
World Fuel contends that the Federal Charter waives Nambe
Corp.'s immunity “independently of the contractual
waiver of sovereign immunity in the Agreement.”
Response at 4 n.1 (“The narrower waiver in the
Agreement does not negate the general waiver of immunity in
the sue and be sued clause of Nambe's corporate charter
-- each waiver operates independently.”).
Fuel asserts that it provided Nambe Corp. formal notice of
the dispute regarding unpaid taxes that Nambe Corp. owes to
World Fuel, after Nambe Corp. refused to pay an invoice for
amounts owed and demanded arbitration pursuant to the
Agreement. See Response at 4. World Fuel asserts
that Nambe Corp. “has not selected a second arbitrator
within ten days of its receipt of the notice as required by
the Agreement, and has refused to proceed to
arbitration.” Response at 4-5. World Fuel avers that,
on August 31, 2018, it “filed a petition in this Court
to compel arbitration pursuant to Section 4 of the
FAA.” Response at 5. World Fuel contends that,
according to Nambe Corp.,
before World Fuel may avail itself of the summary procedures
afforded under Section 4 of the FAA, which apply only to
federal courts, it must bring its FAA claim in the Nambe
Tribal Courts and engage in the exact type of protracted
litigation about venue that the FAA was enacted to curb.
at 5. World Fuel argues that arbitrators, and not a court,
must decide the exhaustion argument, because it is a
procedural question regarding grievance procedure.
See Response at 5. World Fuel asserts that
arbitrators, and not a court, must determine the
Agreement's validity, because the Supreme Court has held
that, “unless the challenge is to the arbitration
clause itself, the issue of the contract's validity is
considered by the arbitrator in the first instance.”
Response at 5-6 (quoting Buckeye Check Cashing, Inc. v.
Cardegna, 546 U.S. 440, 445-46 (2006)). World Fuel avers
that, because Nambe Corp. challenges the 2017 contract's
validity as a whole, arbitrators must decide the issue.
See Response at 6.
World Fuel argues that, even if Nambe Corp.'s issues were
for the Court to decide, “a district court generally
may not consider matters outside the four corners of the
complaint on a motion to dismiss, and certainly may not
consider matters directly contrary to the allegations in the
complaint.” Response at 6. World Fuel argues that the
Court must disregard the R. Vigil Aff. See Response
at 6-7. World Fuel contends that motions to dismiss for lack
of jurisdiction may be based on extrinsic evidence, but that
Nambe Corp.'s Motion is not based on a lack of
jurisdiction, because the Supreme Court “has made clear
that, when applicable, the tribal exhaustion doctrine
‘is required as a matter comity, not as a
jurisdictional prerequisite.'” Response at 7
(emphasis in Response)(quoting Iowa Mutual, 480 U.S.
at 16 n.8).
World Fuel avers that it “undoubtedly states a claim
under Section 4 of the FAA” where World Fuel alleges
that it and Nambe Corp. entered into a written contract
containing an arbitration clause, and Nambe Corp. failed to
arbitrate a dispute within the scope of the clause, despite
the occurrence, waiver, or performance of all conditions
precedent. Response at 7. World Fuel argues, accordingly,
that “[a]ny counterfactual arguments that NPDC seeks to
present, ” including regarding the Agreement's
validity and the Tribal exhaustion requirement, “must
be made at trial, not on a motion to dismiss[, ]”
because the FAA requires that where factual issues exist,
courts shall proceed summarily to trial. Response at 7
(quoting 9 U.S.C. § 4). World Fuel argues that a
“court reversibly errs by summarily denying a petition
to compel arbitration in the face of a factual dispute
instead of proceeding to trial as required by the FAA's
express terms.” Response at 7.
Fuel argues that the FAA supersedes the Tribal exhaustion
doctrine, which is “merely a judicially-created,
non-jurisdictional rule.” Response at 8. World Fuel
argues that the Tribal exhaustion doctrine's purpose is
to serve the congressional policy of promoting Tribal
self-governance, and that it does not apply where Congress
has expressed an “unmistakable preference for a federal
forum” or applying the doctrine would “frustrate
a ‘congressional policy of immediate access to federal
forums.'” Response at 8 (quoting El Paso Nat.
Gas Co. v. Neztsosie, 526 U.S. 473, 484-86
(1999)(“El Paso”)). World Fuel argues
that, in Hicks, the Supreme Court also held that
“the tribal exhaustion doctrine does not apply in cases
where it is clear that the Tribal Court lacks jurisdiction
and that the exhaustion requirement would serve ‘no
purpose other than delay.'” Response at 8 (quoting
Hicks, 533 U.S. at 369). World Fuel contends that
the FAA expresses Congress' requirement -- not just
preference -- that district courts hear FAA § 4
petitions. See Response at 8. World Fuel contends
that the FAA's provisions applying the Federal Rules of
Civil Procedure confirm Congress' requirement that
district courts -- a federal forum -- hear FAA petitions.
See Response at 9. World Fuel notes that FAA §
4's title reads: “[f]ailure to arbitrate under
agreement; petition to United States court having
jurisdiction for order to compel arbitration; notice and
service thereof, hearing and determination.” Response
at 9 n.2 (quoting 9 U.S.C. § 4)).
Fuel argues that the Supreme Court has “strongly
doubted that Section 4 applies to courts other than federal
courts.” Response at 9-10. World Fuel argues that
§ 4's language is mandatory and that, under the FAA,
a district court “must exercise its
jurisdiction when confronted with a petition to compel
arbitration.” Response at 10 (emphasis in Response).
World Fuel argues that “[a]pplying an exhaustion
doctrine would mean that a party could never take
advantage of the quick resolution offered by Section 4 of the
FAA, as satisfying the exhaustion requirement would always
add delay.” Response at 12 (emphasis in Response).
Fuel analogizes its dispute to those in El Paso and
Preston v. Ferrer, 552 U.S. 346 (2008), and argues
that El Paso “makes clear that the rationales
for federal displacement of state-court proceedings are
equally applicable to displacement of tribal proceedings,
” Response at 15 (citing El Paso, 526 U.S. at
484-86), and Preston v. Ferrer “rejected a
proposed distinction between judicial and administrative
proceedings, and opted for an expansive view of the FAA . .
., ” Response at 15 (citing Preston v. Ferrer,
552 U.S. at 359). World Fuel argues that “there is no
reason to single out tribal exhaustion as an unwritten
exception to Congress's policy of speedy resolution of
Section 4 petitions.” Response at 15.
World Fuel argues that the cases which Nambe Corp. cites are
distinguishable or do not address World Fuel's arguments,
and that, because the Tenth Circuit has never ruled on
“the issue of tribal exhaustion in the context of a
petition under Section 4 of the FAA, ” the Court need
not follow blindly cases from other circuits with
distinguishable circumstances and considering different
arguments than those raised here. Response at 16. World Fuel
argues that “each case Nambe relies on for the
proposition that tribal exhaustion is required when a
plaintiff seeks to compel arbitration was animated by the
fact that the plaintiff filed a suit to compel arbitration
only in response to the tribe or tribal member already filing
suit in Tribal Court.” Response at 18. World Fuel
concedes that the Tenth Circuit has held that a parallel
Tribal proceeding is not required for Tribal exhaustion to
apply but contends that the Tenth Circuit “has not held
that the absence of such a parallel proceeding is irrelevant
to the analysis.” Response at 19. World Fuel argues
that several factors demonstrate that comity concerns are at
their lowest here: (i) there is no pending Tribal proceeding;
(ii) the parties' contract requires its interpretation in
accordance with New Mexico state law; (iii) the FAA requires
applying federal substantive law regarding arbitration; (iv)
the parties' dispute is not intra-Tribal; (v) the
Agreement provides for “any court having
jurisdiction” to hear a petition to compel arbitration;
(vi) the arbitration clause selects a non-Tribal forum for
adjudication; and (vii) the Agreement prioritizes rapid
adjudication by providing that the arbitration should
conclude within sixty days of the formal arbitration demand.
Response at 19-20. World Fuel contends that the cases that
Nambe Corp. cites do not address FAA § 4's plain
text or Preston v. Ferrer's holding that delays
caused by exhaustion requirements are inconsistent with
Congress' policy, in enacting the FAA, of encouraging
speedy resolution of disputes. See Response at 20.
Fuel argues that Nambe Corp. waived the Tribal exhaustion
requirement by allowing any court of competent jurisdiction
to preside over an action to compel arbitration. See
Response at 21. World Fuel contends that that Nambe Corp. did
not expressly refer to exhaustion of Tribal proceedings
“does not mean that Nambe did not waive an exhaustion
defense” and that the Court must consider the
real-world consequences of the Agreement's language.
Response at 22. World Fuel contends that, in stating that any
court could preside over an action to compel arbitration,
Nambe Corp. could not have intended that only the Nambe
Pueblo Tribal Court preside. See Response at 22.
World Fuel contends that the Tribal exhaustion requirement
does not apply where there are no pending parallel
proceedings in Tribal Court and that, even though the Tenth
Circuit has not spoken on the issue, there is “a
pending petition for a writ of certiorari for which the
Supreme Court has entered an order calling for the views of
the Solicitor General (CVSG)” on the issue. Response at
23 n.8 (citing Petition for Writ of Certiorari, Harvey v.
Ute Indian Tribe of Uintah ab Ouray Reservation, Case
No. 17-1301 (dated March 7, 2018)). World Fuel avers that
this case is not about jurisdiction; rather, it is about the
right to arbitrate a contractual dispute between parties.
See Response at 23-24. World Fuel argues that, for
the foregoing reasons, the Court should deny Nambe
Corp.'s Motion. See Response at 24.
Corp. begins by arguing that whether a contract ever came
into existence is a matter for a court and not an arbitrator
to decide. See Defendant's Reply in Support of
Motion to Dismiss at 1-2, filed December 10, 2018 (Doc.
27)(“Reply”). Nambe Corp. concedes that, where
execution of a contract is undisputed and there is no
separate challenge to an arbitration clause's validity -
- distinct from a challenge to the overall contract's
validity, arbitrators and not courts must determine the
contract's validity. See Reply at 2. Nambe Corp.
contends, however, that the Supreme Court “expressly
excluded from this rule situations in which the party
resisting arbitration claims it never entered into the
contract containing the arbitration clause.” Reply at
2. Nambe Corp. contends that “it is well settled that
no party can be compelled to engage in arbitration unless
they have agreed to do so, ” Reply at 4, and that World
Fuel, as the party seeking to compel arbitration, bears the
burden to prove in court that an agreement to arbitrate was
formed, see Reply at 4.
Corp. asserts that the Motion's core issue is its
“contention that because of Plaintiff's duty to
exhaust tribal remedies, the proper court to rule on the
contract formation question (and all related arbitration and
contract questions . . ., most of which require
interpretation of NPDC's Charter is the Nambe Tribal
Court, not this Court.” Reply at 4-5. Nambe Corp. next
turns to World Fuel's contention that wording in the
arbitration clause allowing any court with competent
jurisdiction to enforce any binding arbitration decision and
referring to a limited sovereign immunity waiver associated
with the arbitration clause, “implicitly waived World
Fuels' [sic] duty to exhaust its tribal remedies.”
Reply at 5.
Corp. argues that World Fuel cannot rely on words in a
contract instrument to which Nambe Corp. is not a party to
excuse itself from the Tribal exhaustion requirement.
See Reply at 5. Nambe Corp. avers that “it is
well-settled in this Circuit that the duty to exhaust tribal
remedies applies even if the party seeking to compel
arbitration claims the Tribal party has waived its
immunity.” Reply at 6. Nambe Corp. contends that waiver
of sovereign immunity and Tribal remedy exhaustion are two
separate issues. See Reply at 6. Nambe Corp. argues
that pursuant to federal policy, in the Tenth Circuit, a
party may not waive the Tribal exhaustion requirement through
contract, even with explicit waiver language. See
Reply at 6.
Nambe Corp. asserts that, in the Tenth Circuit, “the
duty to exhaust tribal remedies exists and must be enforced
even if no parallel Tribal Court proceedings are
ongoing.” Reply at 7. Nambe Corp. argues that,
“no matter whether the tribal or federal case is filed
first” the risk of creating competition between Tribal
and federal court proceedings exists and, “if the
absence of a Tribal Court case excused exhaustion, parallel
Tribal Court proceedings would be routinely filed in every
case following a federal court filing, thus giving rise to
the very inter-court conflict the exhaustion doctrine is
intended to avoid.” Reply at 7.
Corp. argues that World Fuel's assumption that Tribal
resolution of its contract and arbitration dispute will take
longer than dispute resolution in federal court is erroneous,
and that “any delay World Fuels [sic] suffers from
initially filing in the wrong court is a self-inflicted
wound.” Reply at 8. Nambe Corp. contends that, after
Tribal remedies are exhausted, the only post-Tribal Court
proceedings permitted would be to challenge the Nambe Pueblo
Tribal Courts' jurisdiction, because res judicata would
bar relitigation of the Nambe Pueblo Tribal Court's
rulings. See Reply at 8. Nambe Corp. avers that
“even persons detained by tribal governments who seek
to invoke the speedy statutory habeas corpus remedy
to obtain their release under 25 U.S.C. § 1303 must
first exhaust their tribal remedies before seeking federal
court relief . . . .” Reply at 8. Nambe Corp. contends
that “[s]ecuring a speedy arbitration remedy is
certainly of no greater import than seeking a speedy release
from unlawful tribal custody.” Reply at 8. Nambe Corp.
contends that World Fuel improperly relies upon Preston
v. Ferrer to evade exhaustion of Tribal remedies,
because, according to Nambe Corp., Preston v. Ferrer
considers a situation where the formation of a binding
arbitration agreement is undisputed. See Reply at 9.
Corp. contends that, contrary to World Fuel's assertion
that federal courts are the only courts which may hear FAA
claims, state courts “routinely rule on motions to
compel arbitration in contract or tort cases that come before
them.” Reply at 10. Nambe Corp. contends that federal
courts have also “required non-Indian parties to first
present their arbitration demands in Tribal Courts where the
dispute giving rise to the arbitration demand arose from
on-reservation transactions . . . .” Reply at 10. Nambe
Corp. avers that the FAA's § 4
merely provides that the party seeking to compel arbitration
“may” choose to seek that relief in a U.S.
District Court -- and provides the further restriction that a
party can seek that relief only in circumstances where the
federal court would otherwise have jurisdiction to adjudicate
the underlying dispute between the parties.
Reply at 10 (quoting 9 U.S.C. § 4). Nambe Corp. argues
that the FAA is unlike exclusive federal forum statutes and
that federal courts are not the exclusive forums for
adjudication of FAA disputes. See Reply at 10-11.
Corp. avers that, in El Paso, the Supreme Court held
that cases involving ordinary questions of federal law are
subject to the Tribal exhaustion requirement unless the Tribe
lacks jurisdiction under Montana or one of the
exceptions to exhaustion under National Farmers is
invoked. See Reply at 11. Nambe Corp. avers that, in
El Paso, the Supreme Court also distinguished cases
filed in Tribal Court but involving claims which fall within
exclusively federal court jurisdiction based either on a
completely preemptive statute or on a statute evidencing
unmistakable congressional preference for a federal forum, as
in the Price Anderson Act, 42 U.S.C. § 2210
(“PAA”). Reply at 12. Nambe Corp. asserts that,
“[u]nlike the PAA, the FAA does not confer exclusive or
even concurrent jurisdiction upon the federal courts . . .
.” Reply at 13. Nambe Corp. argues that, “the FAA
neither expects nor requires uniformity in the answer to the
question whether a valid arbitration agreement exists,
instead leaving this to be determined by the non-federal
contract law of the jurisdiction in which the dispute arose .
. . .” Reply at 13 (citing 9 U.S.C. § 2). Nambe
Corp. avers that only once a valid arbitration provision to
which both parties agree is found to exist do federal law
standards governing what issues are arbitrable come into
play. See Reply at 14. Nambe Corp. argues that World
Fuel “overlooks a critical aspect of the tribal
exhaustion doctrine -- the (non-jurisdictional) duty to
exhaust tribal remedies only exists in a federal
court where there otherwise exists a federal court duty to
exercise its jurisdiction to decide the claim
presented.” Reply at 14 (emphasis in Reply).
Nambe Corp. argues that it did not improperly rely on
materials outside the Complaint, but that, under D.N.M.
LR-Civ. 7.3(b), the factual allegations which Nambe Corp.
needs to ground its Motion for a failure to exhaust Tribal
remedies require the support of an affidavit or of other
admissible evidence. See Reply at 16. Nambe Corp.
states that it filed and referenced the R. Vigil Aff. in its
Motion. See Reply at 17. Nambe Corp. asserts that
World Fuel “has not controverted any of the factual
allegations supported by the R. Vigil Aff. or the other
exhibits attached to” the Motion. Reply at 17. Finally,
Nambe Corp. asserts that
the rule that would normally require this Court when handling
a Section 4 petition (Resp., p. 6) to “proceed
summarily to the trial” of contract formation issues in
the face of factual disputes bearing on that issue, or to
otherwise rule on that issue without a trial if no disputed
facts are involved, is not applicable.
Reply at 17 (quoting Response at 6).
Court held a hearing. See Draft Transcript of Motion
Hearing at 1:10-11 (December 21,
2018)(Court)(“Tr.”). The Court began by asking
whether Nambe Corp. knows of any caselaw suggesting the Court
should dismiss the case rather than stay it, as is normally
done in cases in which a party files a motion to arbitrate.
See Tr. at 3:8-18 (Court). Nambe Corp. responded
that no Tenth Circuit case directly addresses the interplay
of a motion to dismiss for failure to exhaust Tribal remedies
and a motion to compel arbitration. See Tr. at
3:19-23 (Rogers). Nambe Corp. averred that, in other Courts
of Appeals, the party required to exhaust Tribal remedies
files another action, if they want to return to federal court
and challenge the Tribal Court's jurisdiction after
exhausting Tribal Court remedies. See Tr. at
3:24-4:2 (Rogers). The Court replied that other Courts of
Appeals are also more liberal than the Tenth Circuit
“about dismissing cases in which there is a motion to
arbitrate as well.” Tr. at 4:3-6 (Court). The Court
stated that the Tenth Circuit says that a court should stay
rather than dismiss. See Tr. at 4:7-8 (Court). Nambe
Corp. replied that there is no practical impact on Nambe
Corp. either way, because, Nambe Corp. avers, if the Court
stays for World Fuel to exhaust Tribal remedies, Nambe Corp.
averred that the Nambe Pueblo Tribal Court will decide
whether there is a binding contract and binding arbitration
clause. See Tr. at 4:9-14 (Rogers). Nambe Corp.
stated that if the Nambe Pueblo Tribal Court determines that
there is a binding contract, World Fuel will likely argue for
the Nambe Pueblo Tribal Court to compel arbitration, and if
the Nambe Pueblo Tribal Court determines that there is no
binding contract, then Nambe Corp. will not agree to
arbitration, because it will argue that its sovereign
immunity is not waived. See Tr. at 4:14-19 (Rogers).
Nambe Corp. averred that either way, there might be an appeal
in the Tribal Court context, “but again, the plaintiffs
have the right to come back and challenge the underlying
Tribal Court jurisdiction after that process is
completed.” Tr. at 4:19-23 (Rogers).
Corp. stated that National Farmers and Iowa
Mutual provide the basis for Nambe Corp.'s motion
for dismissal or for a stay. See Tr. at 4:24-5:1
(Rogers). Nambe Corp. stated that the Tenth Circuit
interprets these cases to establish an inflexible bar
“that prohibits this Court from reaching the
merits” of World Fuel's petition. Tr. at 5:1-4
(Rogers). Nambe Corp. stated that the Tenth Circuit repeats
the inflexible bar holding in so many cases that “there
is really no discretion here in regard to [World Fuel's]
duty to exhaust Tribal remedies before asking this Court to
look at anything.” Tr. at 5:4-11 (Rogers). Nambe Corp.
asserts that there is a colorable basis for Tribal
jurisdiction, first, because the case's impact is
“potentially adverse to the resources of the tribe,
” given that Nambe Pueblo wholly owns Nambe Corp., so
if World Fuel prevails on their payment dispute, Nambe
Pueblo's financial resources will be impacted and,
second, because the Nambe Pueblo Tribal Court may exercise
jurisdiction over disputes arising from consensual
relationships on Nambe Pueblo's land. Tr. at 5:15-25
Corp. averred that the fuel sales, the basis of the
parties' dispute, “are continuing today,
notwithstanding that [Nambe Corp. has] told World Fuel that
[their] contract was never approved by the Board.” Tr.
at 6:3-6 (Rogers). Nambe Corp. argued that whether Board
approval was required or what the effect of a lack of Board
approval is “needs to go to the Tribal Court.”
Tr. at 6:6-8 (Roger). Nambe Corp. submitted that Tribal Court
jurisdiction clearly exists under federal law, because World
Fuel will be the plaintiff in any Nambe Pueblo Tribal Court
suit to compel arbitration, and, when a non-Indian plaintiff
sues a Tribal entity in Tribal Court, Williams v.
Lee clearly establishes jurisdiction, because the
dispute arises from the parties' dealings and the Indian
party's actions on their reservation. See Tr. at
6:10-20 (Roger). Nambe Corp. asserted that the Tenth Circuit
recently reaffirmed Williams v. Lee's rule in
Navajo Nation v. Dalley. See Tr. at 6:21-23
Corp. contended that Montana's jurisdictional
test does not apply, because it applies only where the
non-Indian party is the defendant in a suit that a Tribal
plaintiff files in Tribal Court, typically arising from
something that happened on the reservation. See Tr.
at 6:25-7:6 (Rogers). Nambe Corp. averred that, if the Court
concludes Montana's test applies, this case also
fits Montana's test. See Tr. at 7:6-8
(Rogers). Nambe Corp. contended that, to establish Tribal
Court jurisdiction, Nambe Corp. must show that “there
is a non-Indian party involved with a Tribal party [in] some
kind of dealings on the reservation, [and] the dispute arises
from those dealings, and the relief sought has a nexus to the
dispute and the activity of the non[-]Indian party on the
reservation.” Tr. at 7:15-21 (Rogers). Nambe Corp.
averred that Atkinson Trading Co., Inc. v. Shirley,
532 U.S. 645 (2001), added the nexus requirement, which is
clearly satisfied, because the dispute arises from the
parties' alleged Agreement and World Fuel's activity
on Nambe Pueblo Lands, and World Fuel's sought relief,
payment of allegedly owed excise taxes, has a nexus to the
dispute. See Tr. at 7:21-8:1 (Rogers).
Court next asked whether both National Farmers and
Iowa Mutual involve cases with parallel proceedings
in Tribal Court. See Tr. at 8:8-10 (Court). Nambe
Corp. responded that parallel Tribal Court proceedings
existed for both National Farmers and Iowa
Mutual, but that the Tenth Circuit has said there is no
requirement of a parallel or prior Tribal Court proceeding to
trigger the Tribal remedy exhaustion duty, as United
States v. Tsosie, 92 F.3d 1037, 1041 (10th Cir. 1996),
states. See Tr. at 8:11-15 (Rogers). In United
States v. Tsosie, the Tenth Circuit enforced the
exhaustion duty against the United States, concluding that no
pending Tribal Court action is required. See Tr. at
8:15-9:3 (Rogers). Nambe Corp. stated that Smith v.
Moffett, 947 F.3d at 446, came to the same conclusion.
See Tr. at 9:3-5 (Rogers). Nambe Corp. stated that,
if a Tribal Court proceeding is filed after a federal action,
parallel proceedings and conflicting rulings could result,
so, to avoid motivating a race to the courthouse in every
dispute, the Tenth Circuit adopted a rule that the existence
of parallel proceedings is immaterial. See Tr. at
Corp. next contended that World Fuel cannot rely on a
contract that no Court has ruled is binding to contend that
Nambe Corp. waived the Tribal exhaustion requirement, and
furthermore, that nothing in the contract waives or purports
to waive Tribal remedies. See Tr. at 9:23-10:7
(Rogers). Nambe Corp. avers that, in the Tenth Circuit, a
Tribal party cannot waive the Tribal exhaustion duty.
See Tr. at 10:7-9 (Rogers). Nambe Corp. cited to
Navajo Nation v. Intermountain Steel Bldgs, Inc., 42
F.Supp.2d 1222 (D.N.M. 1999)(Parker, J.), in which the
Honorable James A. Parker, now-Senior United States District
Judge for the District of New Mexico, concluded, based on
Smith v. Moffett, that the Tribal exhaustion rule
cannot be waived. See Tr. at 10:13-24 (Rogers).
Corp. next argued that the FAA is unlike the PAA, because the
FAA does not make the federal court the exclusive forum to
hear arbitration demands. See Tr. at 11:10-14
(Rogers). Nambe Corp. argues that the FAA's § 4 says
a party seeking to compel arbitration may file that petition
in federal court, but that state and Tribal Courts also hear
FAA cases, and that, unlike the PAA, the FAA confers on the
court no independent basis for federal jurisdiction.
See Tr. at 12:1-11 (Rogers). Nambe Corp. argued that
El Paso, on which World Fuel relies, reiterates the
normal rule of exhaustion, and carves out a narrow exception
for the PAA, which converts state claims to federal ones and
allows for removal to federal court, expressing a clear
congressional preference for a federal forum. See
Tr. at 13:3-19 (Rogers). Nambe Corp. argued that none of the
cases on which World Fuel relies exclude from the scope of
the Tribal exhaustion rule situations where there is an
underlying dispute whether the contract containing the
arbitration clause ever bound the party resisting arbitration
and that the Nambe Tribal Court must determine the
contract's binding nature. See Tr. at 14:13-19
(Rogers). Nambe Corp. argued, furthermore, that, in the cases
on which World Fuel relies, the arbitration clauses at issue
committed the gateway issues of the contract's validity
to the arbitrator, whereas the clause at issue here does not
do that. See Tr. at 14:20-15:2 (Rogers).
Corp. contended that the Nambe Pueblo Tribal Court should
decide all the factual and legal issues here, because their
resolution requires Federal Charter interpretation.
See Tr. at 15:13-18 (Rogers). Nambe Corp. stated
that federal courts have a duty to act when confronted with
federal causes of action, but the Tribal exhaustion doctrine
creates a non-jurisdictional exception to that duty.
See 16: 3-9 (Rogers). Nambe Corp. also argued that
there is no reason to believe that requiring Tribal
exhaustion will unduly deprive World Fuel of a speedy remedy
and that World Fuel elected to file in federal court before
exhausting Tribal remedies in the first instance.
See 16:17-17:3 (Rogers). Nambe Corp. contended that,
if the Nambe Pueblo Tribal Court correctly determines that it
has jurisdiction, res judicata will bar relitigation of
issues it resolves. See Tr. at 17:3-9 (Rogers).
Nambe Corp. also contends that attacks on the Nambe Pueblo
Tribal Court's competence do not excuse World Fuel from
the Tribal exhaustion requirement. See Tr. at
Court asked Nambe Corp. to tell it about the Nambe Pueblo
Tribal Court and to what the Court will be deferring, if it
dismisses or stays the proceedings. See Tr. at
17:19-21 (Court). Nambe Corp. responded that the Nambe Pueblo
Tribal Court's judge was a barred attorney in New Mexico
before her license lapsed, that she is law-trained, and that
she has many years of experience. See Tr. at
17:22-25 (Rogers). Nambe Corp. stated that the Nambe Pueblo
Tribal Court has rules of procedure, and that it borrows from
state law where Tribal law does not apply, and that the
Southwest InterTribal Court of Appeals hears appeals from the
Nambe Pueblo Tribal Court, and that the Nambe Pueblo Tribal
Court contracts with many small Tribes to handle appellate
matters. See Tr. at 18:1-8 (Rogers). Nambe Corp.
informed the Court that the Nambe Pueblo Tribal Court issues
written opinions and has its own body of law. See
Tr. at 18:8-10 (Rogers).
Court next asked about the pending petition for certiorari in
Harvey v. Ute Indian Tribe of the Uintah & Ouray
Reservation, which was fully briefed and distributed for
the January 4, 2019, conference and presents two questions:
(i) whether the Tribal exhaustion doctrine which requires
federal courts to stay cases challenging Tribal jurisdiction
until the parties have exhausted parallel Tribal Court
proceedings applies to state courts as well, and (ii) whether
the Tribal exhaustion doctrine requires that non-Tribal
courts yield to Tribal Courts when the parties have not
invoked the Tribal Courts' jurisdiction. See Tr.
at 18:14-19:4 (Court). The Court stated that “it
appears that federal courts are split regarding whether the
Tribal exhaustion doctrine applies in the absence of parallel
Tribal Court proceedings.” Tr. at 19:5-8 (Court). The
Court asked whether United States v. Tsosie suggests
that a non-Tribal court may still consider the absence of a
parallel Tribal proceeding as a factor in determining whether
the Tribal exhaustion doctrine should apply. See Tr.
at 19:13-16 (Court). Nambe Corp. responded that non-Tribal
courts may not consider as a factor the absence of a parallel
Tribal proceeding. See Tr. at 19:19-20:2 (Rogers).
Court asked whether, if the Tribal exhaustion doctrine is
analogous to an abstention doctrine, the Court should abstain
from considering a case only when there is a parallel
proceeding to which the Court may abstain. See Tr.
at 20:9-20 (Court). Nambe Corp. responded that, although
Tribal exhaustion is a form of abstention, it is a special
form that the Supreme Court and the Tenth Circuit created, in
the Tribal exhaustion context, and does not require a
parallel proceeding. See Tr. at 20:23-21:2 (Rogers).
The Court next asked whether the Motion is a 12(b)(1) or a
12(b)(6) motion. See Tr. at 22:7-9 (Court). Nambe
Corp. responded that “a lot of people are struggling
with that question” and that it is “sort of
neither.” Tr. at 22:10-13 (Rogers). Nambe Corp.
contended that the Motion is akin to a 12(b)(1), but that it
is not a jurisdictional motion, and that it is akin to a
12(b)(6), but it is not an attack on the Complaint's
merits. See 22:15-18 (Rogers). Nambe Corp. averred
that, in the District of New Mexico, parties “file
affidavits like we did to show the predicate facts that are
necessary to invoke the doctrine . . . .” Tr. at
22:19-21 (Rogers). Nambe Corp. stated that the Tribal
exhaustion requirement is not jurisdictional, but is a
unique, non-waivable, Supreme-Court-established duty which
does not require a parallel Tribal Court proceeding to apply.
See Tr. at 23:6-14 (Rogers). Nambe Corp. states that
the Tribal exhaustion doctrine falls under neither rule
12(b)(1) nor rule 12(b)(6), and that it “just says
notwithstanding” the validity of the pleading in any
other context “there is a duty to exhaust Tribal
remedies.” Tr. at 23:21-24:1 (Rogers).
Fuel began by averring that the Tribal exhaustion doctrine is
the sole basis for Nambe Corp.'s Motion, and that World
Fuel's Complaint is validly pled. See Tr. at
25:1-4 (Zaron). World Fuel alleged that the Agreement is
valid, Nambe Corp. breached the arbitration provision's
terms, and the conditions precedent for arbitration have been
satisfied. See Tr. at 25:6-9 (Zaron). World Fuel
argued that the Court may not consider the R. Vigil Aff.
unless Nambe Corp.'s Motion is jurisdictional, and that,
because it is not jurisdictional, the affidavit improperly
alleges facts outside of the Complaint which the Court may
not consider. See Tr. at 25:9-16 (Zaron). World Fuel
alleges that, because Nambe Corp. improperly relied on the R.
Vigil Aff. in filing its Motion, the Court should deny the
Motion and require Nambe Corp. to file an Answer, or the
Court should summarily move the matter to trial. See
Tr. at 25:14-22 (Zaron). The Court asks whether, if Nambe
Corp.'s Motion is based on comity, and not on either
12(b)(1) or 12(b)(6), there is any reason the Court cannot
rule on the Motion without an Answer. See Tr. at
26:1-5 (Court), id. at 26:8-15 (Court). World Fuel
argued that, because there are factual issues here --
including where the cause of action accrued -- there should
be an Answer, but the Court asked whether, if the bar is as
low as identifying a colorable claim for jurisdiction, the
Nambe Pueblo Tribal Courts should take the first look.
See Tr. at 26:16-27:1 (Zaron, Court).
Fuel alleged that, on page 12, the Federal Charter states
that the president signs and approves of all contracts and
instruments on behalf of Nambe Corp., except for those
expressly delegated to the chief executive officer after the
Board's authorization. See Tr. at 27:14-22
(Zaron). World Fuel contended, accordingly, that there is no
colorable claim for jurisdiction, because, if the Nambe Corp.
president had authority to sign the contract, the contract is
valid, and this Court “would have jurisdiction to
decide whether or not this matter should go to
arbitration.” Tr. at 27:22-28:5 (Zaron). World Fuel
argued that there is no dispute as to the contract's
validity and “that's really the basis for which
[Nambe Corp. is] seeking exhaustion . . . .” Tr. at
28:23-25 (Zaron). The Court examined the Federal Charter and
stated that it did not appear complete, noting its
inconsistent pagination, and stated that “[i]t seems to
raise more questions than it does
answers.” Tr. at 29:16-24 (Court, Zaron).
Fuel contended that the Tribal Courts do not have
jurisdiction to consider an action under the FAA's §
4, because “there is exclusive jurisdiction in this
Court to consider actions under section 4.” Tr. at
30:4-8 (Zaron). World Fuel argued that, while state courts
consider FAA §§ 2 and 3 arbitration claims,
exclusively federal courts consider § 4 claims.
See Tr. At 30-20-22 (Zaron). World Fuel argued that
§ 4 sets forth “specific procedures that are
governed by the Federal Rules of Civil Procedure that
specifically provide for a speedy and efficient
resolution.” Tr. at 31:8-11 (Zaron). World Fuel argued
that, although they could seek to compel arbitration under a
different FAA section, World Fuel brought their petition
pursuant to § 4 “which does have special
provisions providing for the application of the Federal Rules
of Civil [Procedure] and certain limitations on notice . . .
.” Tr. at 32:1-6 (Zaron).
Fuel next argued that, if the Court dismisses this case,
World Fuel would be the plaintiff in the Nambe Pueblo Tribal
Court and would have to file a motion to dismiss World
Fuel's own Complaint, because “we think that there
is no colorable basis for jurisdiction under this section of
the FAA in Tribal Court . . . .” Tr. at 33:7-16
(Zaron). World Fuel argued that, in the administrative
context, Supreme Court caselaw suggests that
arbitration's goals trump the practice of administrative
remedy exhaustion, despite the states' strong interest in
protecting regulations and ordinances. See Tr. at
34:24-35:10 (Zaron). World Fuel argued that, in El
Paso, the Supreme Court determined that the PAA's
speed and efficiency goals were more important than Tribal
exhaustion, and that the FAA has “similar language in
terms of the need for speed and efficiency . . . .” Tr.
at 35:14-36:8 (Zaron). World Fuel then stated that the Court
has diversity jurisdiction over the case. See Tr. at
Fuel then argued that, based on Becker v. Ute Indian
Tribe of the Uintah & Ouray Reservation, 868 F.3d
1199 (10th Cir. 2017), Nambe Corp. can waive the Tribal
exhaustion doctrine. See Tr. at 38:3-14 (Zaron). In
Becker v. Ute Indian Tribe of the Uintah and Ouray
Reservation, the Tenth Circuit analyzed whether the
Tribe had waived Tribal exhaustion, suggesting that a waiver
is possible. See Tr. at 38:3-14 (Zaron). World Fuel
contended that the Court needs “to determine whether or
not there has been a waiver of Tribal exhaustion.” Tr.
at 38:18-20 (Zaron).
Fuel argued that, where there is a factual dispute,
“the proper mechanism is to go to trial on the factual
issues in a summary fashion.” Tr. at 39:14-16 (Zaron).
World Fuel alleged that the dispute involves about two
million dollars in allegedly unpaid excise taxes which World
Fuel contends that Nambe Corp. owes World Fuel. See
Tr. at 40:10-13 (Zaron). World Fuel averred that, in
Comanche Indian Tribe of Okla. v. 49 L.L.C., 391
F.3d 1129 (10th Cir. 2004), the Tenth Circuit affirmed the
federal district court's determination of the issue of
contract formation, and that, in that case, there was no
Tribal exhaustion or deference to a Tribal Court, because
there was no Comanche Tribal Court. See Tr. at
40:19-41:6 (Zaron). World Fuel contended that the issues here
do not require prior Tribal expertise, but likely involve
examining New Mexico law to interpret the contract, something
that this Court could do. See Tr. at 41:12-19
Fuel next turned to the issue of parallel proceedings, and
argued that the lack of a Tribal proceeding “is a
factor in making a decision whether or not you should dismiss
this and say that exhaustion applies here.” Tr. at
42:3-6 (Zaron). World Fuel argued that, because a § 4
arbitration claim may not be filed in Tribal Court, there can
be no parallel proceeding, and that the appropriate course of
action “would be to deny the motion to dismiss and
require the Nambe corporation to file an answer, and then
proceed to a summary trial of the issue . . . .” Tr. at
the R. Vigil Aff.'s improper consideration of facts
outside the Complaint, Nambe Corp. stated that, while some of
Nambe Corp.'s responses regarding the inapplicability of
Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 67
(2010), and Buckeye Check Cashing, Inc. v. Cardegna
“do depend on the [R.] Vigil affidavit[']s
statement that” the Board never approved the contract,
the Court may disregard those arguments, “because the
issue here is whether or not they need to file their motion
to compel arbitration in the Tribal Court.” Tr. at
43:1-8 (Rogers). Nambe Corp. contended that the arbitration
clause at issue here does not reserve gateway issues such as
contract validity to arbitration. See Tr. at 43:8-15
(Rogers). Nambe Corp. argued that, disregarding the portions
of the R. Vigil Aff. that address the Board's lack of
approval of the contract, the Federal Charter's
§§ 301(e) and 701 indicate that the Board must
approve of the contract. See Tr. at 43:22-44:4
(Rogers). Nambe Corp. argued that the Federal Charter's
interpretation “needs to be handled in the Tribal
Court.” Tr. at 44:17-21 (Rogers). Nambe Corp. contends
that, in Comanche Indian Tribe of Okla. v. 49
L.L.C., the Tribe did not argue for exhaustion, because
no Comanche Tribal Court existed. See Tr. at 45:5-8
(Rogers). Nambe Corp. argues that, although World Fuel, if it
files in Nambe Pueblo Tribal Court, will not bring its action
under the FAA's § 4, the exhaustion doctrine
requires only that the Tribal Court resolve the parties'
dispute and the Nambe Pueblo Tribal Court may resolve the
dispute without invoking § 4. See Tr. at
Court stated that it would not rule definitively at the
hearing, but that the Court's impression “is this
is a very strong exhaustion requirement . . . .” Tr. at
54:15-55:1 (Court). The Court stated that it is concerned
about trying to avoid the Tribal exhaustion doctrine without
firmer footing. See Tr. at 55:8-10 (Court). The
Court indicated that it would attempt to get an opinion to
the parties after the first of the year. See Tr. at
REGARDING RULE 12(b)(1) MOTIONS TO DISMISS.
courts are courts of limited jurisdiction; they are empowered
to hear only those cases authorized and defined in the
Constitution which have been entrusted to them under a
jurisdictional grant by Congress.” Henry v. Office
of Thrift Supervision, 43 F.3d 507, 511 (10th Cir.
1994)(citations omitted). A plaintiff generally bears the
burden of demonstrating the court's jurisdiction to hear
his or her claims. See Steel Co. v. Citizens for a Better
Env't, 523 U.S. 83, 104 (1998)(“[T]he party
invoking federal jurisdiction bears the burden of
establishing its existence.”). “[Because] federal
courts are courts of limited jurisdiction, we presume no
jurisdiction exists absent an adequate showing by the party
invoking federal jurisdiction.” United States ex
rel. Hafter v. Spectrum Emergency Care, Inc., 190 F.3d
1156, 1160 (10th Cir. 1999). Rule 12(b)(1) of the Federal
Rules of Civil Procedure allows a party to raise, by motion,
the defense of the court's “lack of jurisdiction
over the subject matter.” Fed.R.Civ.P. 12(b)(1). The
Tenth Circuit has held that motions to dismiss for lack of
subject-matter jurisdiction “generally take one of two
forms: (1) a facial attack on the sufficiency of the
complaint's allegations as to subject-matter
jurisdiction; or (2) a challenge to the actual facts upon
which subject-matter jurisdiction is based.” Ruiz
v. McDonnell, 299 F.3d 1173, 1180 (10th Cir. 2002).
On a facial attack, a plaintiff is afforded safeguards
similar to those provided in opposing a rule 12(b)(6) motion:
the court must consider the complaint's allegations to be
true. See Ruiz v. McDonnell, 299 F.3d at 1180;
Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir.
1981). But when the attack is aimed at the jurisdictional
facts themselves, a district court may not presume the
truthfulness of those allegations. A court has wide
discretion to allow affidavits, other documents, and a
limited evidentiary hearing to resolve disputed
jurisdictional facts under Rule 12(b)(1). In such instances,
a court's reference to evidence outside the pleadings
does not convert the motion to a Rule 56 [summary-judgment]
Alto Eldorado Partners v. City of Santa Fe, No. CIV
08-0175 JB/ACT, 2009 WL 1312856, at *8-9 (D.N.M. March 11,
2009)(Browning, J.)(citations omitted), aff'd on
other grounds by 634 F.3d 1170 (10th Cir. 2011). The
Fifth Circuit has stated:
[T]he trial court may proceed as it never could under
12(b)(6) or Fed.R.Civ.P. 56. Because at issue in a factual
12(b)(1) motion is the trial court's jurisdiction -- its
very power to hear the case -- there is substantial authority
that the trial court is free to weigh the evidence and
satisfy itself as to the existence of its power to hear the
case. In short, no presumptive truthfulness attaches to
plaintiff's allegations, and the existence of disputed
material facts will not preclude the trial court from
evaluating for itself the merits of jurisdictional claims.
Williamson v. Tucker, 645 F.2d 404, 412-13 (5th Cir.
1981)(quoting Mortensen v. First Fed. Sav. & Loan
Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)).
making a rule 12(b)(1) motion, a party may go beyond the
complaint's allegations to challenge the facts upon which
jurisdiction depends, and may do so by relying on affidavits
or other evidence properly before the court. See New
Mexicans for Bill Richardson v. Gonzales, 64 F.3d 1495,
1499 (10th Cir. 1995); Holt v. United States, 46
F.3d 1000, 1003 (10th Cir. 1995). In those instances, a
court's reference to evidence outside the pleadings does
not necessarily convert the motion to a rule 56 motion for
summary judgment. See Holt v. United States, 46 F.3d
at 1003 (citing Wheeler v. Hurdman, 825 F.2d 257,
259 n.5 (10th Cir. 1987)). Where, however, the court
determines that jurisdictional issues raised in a rule
12(b)(1) motion are intertwined with the case's merits,
the court should resolve the motion under either rule
12(b)(6) or rule 56. See Franklin Sav. Corp. v. United
States, 180 F.3d 1124, 1129 (10th Cir. 1999);
Tippett v. United States, 108 F.3d 1194, 1196 (10th
Cir. 1997). “When deciding whether jurisdiction is
intertwined with the merits of a particular dispute,
‘the underlying issue is whether resolution of the
jurisdictional question requires resolution of an aspect of
the substantive claim.'” Davis ex rel. Davis v.
United States, 343 F.3d 1282, 1296 (10th Cir.
2003)(quoting Sizova v. Nat'l Inst. of Standards
& Tech., 282 F.3d 1320, 1324 (10th Cir. 2002)).
REGARDING MOTIONS TO DISMISS UNDER RULE
12(b)(6) authorizes a court to dismiss a complaint for
“failure to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). “The nature of a
Rule 12(b)(6) motion tests the sufficiency of the allegations
within the four corners of the complaint after taking those
allegations as true.” Mobley v. McCormick, 40
F.3d 337, 340 (10th Cir. 1994). A court may also consider
documents to which the complaint refers, if their adequacy is
central to the plaintiffs' claims and their authenticity
is unquestioned. See Armstrong v. N.M. Disability Det.
Servs., 278 F.Supp.3d 1193, 1201 n.3 (D.N.M.
2017)(Browning, J.)(concluding that the court properly
considered notices attached to the motion and not to the
complaint, because the complaint referenced them, their
adequacy was central to the plaintiffs' claims, and their
authenticity was unquestioned). See also GFF Corp. v.
Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384
(10th Cir. 1997)(Kelly, J.)(“[I]f a plaintiff does not
incorporate by reference or attach a document to its
complaint, but the document is referred to in the complaint
and is central to the plaintiff's claim, a defendant may
submit an indisputably authentic copy to the court to be
considered . . . .”).
complaint's sufficiency is a question of law, and, when
considering a rule 12(b)(6) motion, a court must accept as
true all well-pled factual allegations in the complaint, view
those allegations in the light most favorable to the
non-moving party, and draw all reasonable inferences in the
plaintiff's favor. See Tellabs, Inc. v. Makor Issues
& Rights, Ltd., 551 U.S. at 322 (“[O]nly if a
reasonable person could not draw . . . an inference [of
plausibility] from the alleged facts would the defendant
prevail on a motion to dismiss.”); Smith v. United
States, 561 F.3d 1090, 1098 (10th Cir.
2009)(“[F]or purposes of resolving a Rule 12(b)(6)
motion, we accept as true all well-pleaded factual
allegations in a complaint and view these allegations in the
light most favorable to the plaintiff.” (quoting
Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir.
2006))). At the motion-to-dismiss stage, the court does not
weigh the evidence, and “is interested only in whether
it has jurisdiction and whether the [p]laintiffs plead a
claim to relief that is plausible on its face.”
Begay v. Pub. Serv. Co. of N.M., 710 F.Supp.2d 1161,
1199 (D.N.M. 2010)(Browning, J.).
complaint need not set forth detailed factual allegations,
yet a “pleading that offers labels and conclusions or a
formulaic recitation of the elements of a cause of
action” is insufficient. Iqbal, 556 U.S. at
678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. at
555). “Threadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, do not
suffice.” Iqbal, 556 U.S. at 678.
“Factual allegations must be enough to raise a right to
relief above the speculative level, on the assumption that
all the allegations in the complaint are true (even if
doubtful in fact).” Bell Atl. Corp v. Twombly,
550 U.S. at 555 (citation omitted). See Duncan v.
Citibank (S.D.), N.A., No. CIV 06-0246 JB/KBM, 2006 WL
4063021, at *3 (D.N.M. June 30, 2006)(Browning,
J.)(dismissing a civil Racketeer Influenced and Corrupt
Organizations Act (“RICO”) cause of action from a
complaint where the complaint alleged a single physical act,
and not a pattern of racketeering activity, and a pattern of
activity is one of the elements required to state a RICO
survive a motion to dismiss, a plaintiff's complaint must
contain sufficient facts that, if assumed to be true, state a
claim to relief that is plausible on its face. See Bell
Atl. Corp. v. Twombly, 550 U.S. at 570; Mink v.
Knox, 613 F.3d 995, 1000 (10th Cir. 2010). “A
claim has facial plausibility when the pleaded factual
content allows the court to draw the reasonable inference
that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (citing
Bell Atl. Corp. v. Twombly, 550 U.S. at 556).
“Thus, the mere metaphysical possibility that some
plaintiff could prove some set of facts in support of the
pleaded claims is insufficient; the complainant must give the
court reason to believe that this plaintiff has a reasonable
likelihood of mustering factual support for these
claims.” Ridge at Red Hawk, LLC v. Schneider,
493 F.3d 1174, 1177 (10th Cir. 2007)(emphasis omitted). A
court will not construe a plaintiff's pleadings “so
liberally that it becomes his advocate.” Bragg v.
Chavez, No. CIV 07-0343 JB/WDS, 2007 WL 5232464, at *25
(D.N.M. Aug. 2, 2007)(Browning, J.). The Tenth Circuit has
“[P]lausibility” in this context must refer to
the scope of the allegations in a complaint: if they are so
general that they encompass a wide swath of conduct, much of
it innocent, then the plaintiffs “have not nudged their
claims across the line from conceivable to plausible.”
The allegations must be enough that, if assumed to ...