United States District Court, E.D. Washington
JAMES A. CLEMENTS; and JASON CLEMENTS, Plaintiffs,
CONFEDERATED TRIBES OF THE COLVILLE RESERVATION; and COURT OF THE CONFEDERATED TRIBES OF THE COLVILLE RESERVATION, Defendants.
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS FOR
LACK OF SUBJECT MATTER JURISDICTION AND FOR FAILURE TO STATE
ROSANNA MALOUF PETERSON United States District Judge
THE COURT is a Motion to Dismiss, ECF No. 8, by Defendants
the Confederated Tribes of the Colville Reservation
(“the Tribes”) and the Court of the Confederated
Tribes of the Colville Reservation (“the Tribal
Court”). Defendants seek dismissal for lack of subject
matter jurisdiction under Fed.R.Civ.P. Rule 12(b)(1), and for
failure to state a claim under Fed.R.Civ.P. 12(b)(6). The
Court has reviewed the Complaint, the parties'
submissions, and the relevant law. The Court further heard
oral argument on the motion on November 14, 2019, in Spokane.
Accordingly, the Court is fully informed and grants the
James Clements formed South Bay Excavating, Inc.
(“South Bay”) in 1987. ECF No. 1 at 3. The
Olympia, Washington, company provided excavation services.
Id. Jason Clements became a shareholder and an
officer of South Bay in 2006.
November 2016, Defendant the Tribes entered into a
“Contract for Repair and/or Construction
Services” with South Bay to complete the “CTCR 12
Fiber Projects” for the Tribes (“the
Contract”). ECF No. 9-1. Jason signed the Contract for
South Bay as Vice President of the company. ECF No. 9-1 at
17. The Contract was executed in Nespelem, Washington, where
the Tribes are headquartered, and provided for South
Bay's installation of optical fiber cable for $2, 457,
194, with payments remitted to South Bay on a detailed
schedule and a scheduled completion date of October 31, 2017.
ECF No. 9-1 at 1, 5, 16. The Contract obliged South Bay, as
the “Contractor, ” to “be solely
responsible for all construction under this Contract,
including the techniques, sequences, procedures, and means
for coordination of all work.” Id. at 9. The
Contract further provided for the “Tribal Courts of the
Colville Confederated Tribes” to have “sole and
exclusive jurisdiction over disputes arising from the
Contract.” ECF No. 9-1 at 14.
execution of the Contract, the Tribes allegedly paid South
Bay for work pursuant to the Contract. ECF No. 9-2 at 7. The
Tribes allege that South Bay “walked off of the
job” on approximately June 1, 2017, without notice and
without any indication of how it would complete the project.
ECF No. 9-3 at 2; see also ECF No. 9-2 at 7
(alleging that work ceased on June 2, 2017). In a letter
dated June 22, 2017, the South Sound Bank, out of Olympia,
Washington, notified the Tribes that the bank was exercising
its “rights to collect any amounts” that the
Tribes owed to South Bay, “until further notice.”
ECF No. 9-4 at 2.
6, 2017, Liquid Networks, Inc. (“Liquid
Networks”) was registered as a Washington corporation.
ECF No. 9-5 at 2. By letter dated July 7, 2017, a law firm
representing Liquid Networks informed the Tribes that Liquid
Networks had been assigned the Contract from South Bay. ECF
No. 9-6 at 2. The letter further stated that Liquid Networks
intended “to resume work on the project on or around
July 10th and will adhere to the same terms and conditions
for the ‘CTCR 12 Fiber Projects' Contract.”
Id. On July 11, 2017, James, for assignor South Bay,
and Jason, for assignee Liquid Networks, signed an Assignment
of Contract in which Liquid Networks allegedly assumed South
Bay's rights, duties, and obligations under the Contract
with the Tribes. ECF No. 9-7 at 2. In Defendants' instant
motion they allege that the “creation of Liquid
Networks and assignment of the Contract appear to have been
done solely to evade collections efforts by South Sound
Bank.” ECF No. 9 at 4.
approximately August 28, 2017, the Tribes addressed a letter
to James, as President of South Bay, seeking return of
approximately $385, 000 that the Tribes allegedly had paid
South Bay toward work that South Bay had not performed and
payment of $25, 000 in allegedly outstanding fees owed to the
Tribal Employment Rights Office (“TERO”). ECF No.
9-3 at 2.
Tribes filed a Civil Complaint with the Tribal Court on
January 5, 2018. ECF No. 9-2 at 4-79. The Tribes named South
Bay, Liquid Networks, and the Clements as defendants.
Id. The Clements moved to dismiss the Tribes'
claims against them individually for lack of personal and
subject matter jurisdiction. ECF No. 1 at 5. The Tribal Court
denied the motion on May 17, 2018, finding that the
“issue of whether James and Jason Clements are
personally liable for allegedly breaching the contract is
necessarily a dispute ‘arising from' the
contract” and dismissal would not be appropriate
“until the Tribes have presented their case at
trial.” ECF No. 9-8 at 6-7.
Clements sought interlocutory appeal of the Tribal
Court's denial of the motion to dismiss. ECF No. 9-9 at
3. On March 19, 2019, the Colville Tribal Court of Appeals
found that the question of whether the tribal courts should
“pierce the corporate veil” and find personal
jurisdiction over the Clements individually was “not
ripe for interlocutory appeal” and remained a
“matter for the fact-finder at the trial level.”
ECF No. 9-9 at 3.
filed their Complaint in this Court on June 5, 2019, alleging
that Plaintiffs had exhausted their tribal court remedies.
ECF No. 1 at 2. Plaintiffs seek relief, allegedly as
“interested parties” within the meaning of 28
U.S.C. § 2201, in the form of a declaratory judgment
that the tribal court lacks jurisdiction over Plaintiffs and
an injunction prohibiting the tribal court from adjudicating
the claims brought against the Plaintiffs by the Tribes.
Id. at 2, 5-8. Furthermore, Plaintiffs assert
subject matter jurisdiction under 28 U.S.C. § 1331.
Id. at 3.
R. Civ. P. 12(b)(1)
courts are courts of limited jurisdiction.”
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377 (1994). A court will dismiss a complaint under
Fed.R.Civ.P. 12(b)(1) upon finding that the court lacks
jurisdiction over the subject matter of the suit. As a
general rule, a court may dismiss a complaint sua
sponte upon finding that it lacks subject matter
jurisdiction. See Pistor v. Garcia, 791 F.3d 1104,
1111 (9th Cir. 2015). However, due to the “quasi
jurisdictional nature” of sovereign immunity, a
defendant may waive a challenge to jurisdiction on that
ground “if it does not invoke its immunity in a timely
fashion and takes actions indicating consent to the
litigation.” Pistor, 791 F.3d at 1111.
“Once challenged, the party ...