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In re $323

United States District Court, D. New Mexico

February 19, 2019



         In the MOTION TO LIFT STAY IN CALIFORNIA VALLEY MIWOK TRIBE INTERPLEADER ACTION AND TO SET OSC OR SUMMARY JUDGMENT SCHEDULE (Doc. No. 8) (Motion to Lift Stay), Defendant-in-Interpleader Silvia Burley (Burley) and interested party the General Council of the CVMT (together, Movants), purportedly on behalf of Defendant-in-Interpleader the California Valley Miwok Tribe (CVMT or Tribe), ask the Court to lift a stay of this Interpleader Action. On February 13, 2017, the Court stayed this Interpleader Action, “pending a final decision by the Department of the Interior recognizing a government for the Tribe or until further order of this Court.” ORDER GRANTING DEFENDANTS-IN-INTERPLEADER'S JOINT MOTION FOR STAY (Doc. No. 7) at 2. The purpose of the stay was to allow the appeal of a decision issued by the United States District Court for the Eastern District of California (E.D. Ca.) to the Ninth Circuit Court of Appeals. The appeal involved a review of a 2015 Decision (the 2015 Decision) issued by the Department of the Interior's Assistant Secretary for Indian Affairs Kevin Washburn (Secretary Washburn). (See Compl. (Doc. No. 2) Ex. A.) The Movants argue that since the Ninth Circuit has now affirmed the E.D. Ca.'s decision upholding the 2015 Decision, the Court should lift the stay. The Movants then ask the Court to enter an order to show cause why “these interpleader funds should not be distributed to either the Burley Faction, or, alternatively, to the Burley family as enrolled members of the Miwok Tribe[.]”[1] In the alternative, the Movants ask the Court to “set a briefing schedule on the issue on cross-motions for summary judgment.” (Mot. to Lift Stay at 4.)

         In the RESPONSE IN OPPOSITION TO MOTION TO LIFT STAY (Doc. No. 11) (Response) Defendants-in-Interpleader and members of a Tribal Council formed in 2013, Yakima Dixie, [2] Velma Whitebear, Antonia Lopez, Gilbert Ramirez, Jr., Antoinette Lopez, Michael Mendibles, and Iva Carsoner (the Dixie Faction) argue that the stay should not be lifted because the BIA has not recognized a governing body for the Tribe. Instead, the Dixie Faction asks the Court to deny the Motion to Lift Stay and to transfer the Interpleader Action to the E. D. Ca. where all of the Defendants-in-Interpleader reside. See Response; and NOTICE OF MOTION AND MOTION TO TRANSFER VENUE (Doc. No. 9), MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO TRANSFER VENUE (Doc. No. 9-1) (together, Motion to Transfer). The Movants filed a reply brief. See REPLY TO OPPPOSITON TO MOTION TO LIFT STAY (Doc. No. 12).

         Having carefully considered all pleadings, briefs, applicable law and procedure, the Court will deny the Motion to Lift Stay. The Court is aware that even though the severed Interpleader Action (No. 18 CV 1194) fails to name the Plaintiffs-in-Interpleader as parties, they were never formally dismissed, discharged, and relieved of responsibility for disbursing the interpleaded funds as requested in the Complaint. See Sheridan v. United States, 214 Fed.Appx. 857, 858-59 (10th Cir. 2007) (holding a district court should review the body of a complaint to determine the true defendants, as opposed to simply those identified in the caption). Therefore, the Court will dismiss them by separate order. See generally The Late Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, 7 Fed. Prac. & Proc. Civ. § 1714 (3d ed. 2001) (stating that when the court decides that interpleader is available, it may issue an order discharging the stakeholder if the stakeholder is disinterested). The Court will then transfer this Interpleader Action to the E.D. Ca.

         I. BACKGROUND

         A. The Complaint in Interpleader and Severance of the Interpleader Action On September 29, 2016, Plaintiffs-in-Interpleader, the Plaintiff Class, through its class representatives, the Ramah Navajo Chapter, the Oglala Sioux Tribe, and the Pueblo of Zuni, filed the COMPLAINT IN INTERPLEADER (California Valley Miwok Tribe) (No. 90 CV 957, Doc. No. 1366; No. 18 CV 1194, Doc. No. 2) (Complaint) in the class action, Ramah Navajo Chapter et al. v. Ryan Zinke, et al., No. 90 CV 957 JAP/KBM (Ramah). The amount of $323, 647.60 (the interpleaded funds), [3] owed to the CVMT as class member # 72 under the Final Settlement Agreement (No. 90 CV 957, Doc. No. 1306-1) (FSA), is held in the Court's Registry. In the Complaint, the Plaintiffs-in-Interpleader alleged that they could not determine “who is entitled to execute the Claim Form for defendant-in-interpleader” CVMT and “to receive its share of the Net Settlement Amount, as identified in the [FSA][.]” (Compl. at 1-2.)[4]

         The Dixie Faction constitute a majority of the members of a Tribal Council formed under a 2013 Tribal Constitution.[5] (Compl. ¶ 2.) In the 2015 Decision, Secretary Washburn refused to recognize either the General Council or the Tribal Council as the lawful governing body of the CVMT. In the Complaint, Plaintiffs-in-Interpleader asked the Court to assume control and pay the interpleaded funds “to such party or parties as the Court determines to be the proper payee(s) upon submission of a properly executed Claim Form[.]” (Id. ¶ 10.) Under the FSA, a Class Member must “return a signed copy of the Claim Form provided by the Settlement Administrator.” (FSA at 24.) The Claim Form must be signed by a tribal official with authority to act for the tribe. See FSA Appendix 3 (No. 90 CV 957 Doc. No. 1306-4).

         On December 14, 2018, Class Counsel filed the MOTION TO SEVER THE CALIFORNIA VALLEY MIWOK TRIBE INTERPLEADER ACTION, AND TO DESIGNATE SEPARATE CAPTION AND CASE NUMBER (No. 90 CV 957 Doc. No. 1621) (Motion to Sever). In the Motion to Sever, Class Counsel stated that they were “prepared to wind up this Class Action litigation … [which] will involve filing a motion to close this case with entry of a final judgment bringing the [Ramah] case to an end.” (Mot. to Sever at 3.)[6] Class Counsel asked that the Court: (1) sever this Interpleader Action under Rule 21; (2) assign a different case number under the caption, In re $323, 647.60 in Funds Belonging to the California Valley Miwok Tribe; and (3) direct the Court Clerk to transfer all relevant pleadings and documents into the new case. (Id.)

         On December 17, 2018, the Court granted the Motion to Sever. See ORDER SEVERING CALIFORNIA VALLEY MIWOK TRIBE INTERPLEADER ACTION AND DESIGNATING SEPARATE CAPTION AND CASE NUMBER (No. 18 CV 1194 Doc. No. 1) (Interpleader Action). The Interpleader Action was assigned the caption In re $323, 647.60 in Funds Belonging to the California Valley Miwok Tribe, and the Complaint and all relevant pleadings, motions, notices, and orders were transferred to No. 18 CV 1194.

         B. Jurisdiction over the Interpleader Action

         There are two types of interpleader: “statutory” and “rule” interpleader. Primerica Life Insurance v. Montoya, No. 18 CV 00109 JCH/DG, 2018 WL 3068059, at * 2 (D. N.M. June 21, 2018) (slip op.). Statutory interpleader is brought under 28 U.S.C. § 1335.[7] This Interpleader Action was brought under Rule 22, which provides:

(1) Persons with claims that may expose a plaintiff to double or multiple liability may be joined as defendants and required to interplead. Joinder for interpleader is proper even though:
(A) the claims of the several claimants, or the titles on which their claims depend, lack a common origin or are adverse and independent rather than identical; or
(B) the plaintiff denies liability in whole or in part to any or all of the claimants.

Fed. R. Civ. P. 22 (a)(1)(A) & (B). “The distinction between the two types of interpleader is that ‘[u]nlike statutory interpleader action under 28 U.S.C. § 1335, [i]nterpleader actions under Rule 22 … must be based upon the general jurisdiction statutes applicable to civil actions in the federal courts.'” Primerica Life Ins. Co., 2018 3068059, at * 2 (quoting, Arnold v. KJD Real Estate, LLC, 752 F.3d 700, 704 (7th Cir. 2014)). Rule 22 is “merely a procedural device; ‘it does not confer subject-matter jurisdiction on federal courts.'” Id. (citing Arnold, 752 F.3d at 700). Hence, in an action brought under Rule 22, either federal question jurisdiction or diversity jurisdiction must be established.” Id.

         The Court had federal question jurisdiction over the original interpleader filed in Ramah. See Anne E. Melley, Fed. Proc. Lawyers Ed. Chapter 49 Interpleader § 49:25 (discussing supplemental jurisdiction in context of interpleader). The Complaint was filed in Ramah to carry out the terms of the FSA and to distribute the settlement funds paid by the United States to discharge its liability to the members of the Plaintiff Class under federal statutory law. And under the FSA, this Court retained ...

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