Breakthrough Management Group, Inc. v. Chukchansi Gold Casino & Resort
2010 U.S. App. LEXIS 26210
| 10th Cir. | 2010Background
- BMG sued the Chukchansi Tribe, the Chukchansi Economic Development Authority (the Authority), the Casino, and Ryan Stanley (a Casino employee) in 2006, asserting federal copyright/trademark infringement, RICO, and various state-law claims.
- The Casino operates for the benefit of the Picayune Rancheria of the Chukchansi Indians (the Tribe).
- The district court dismissed the Tribe based on sovereign immunity, denied immunity to Stanley, and later denied the Authority and Casino’s motion to dismiss, finding no tribal immunity for them as non-Indian entities.
- The court anchored its analysis on a Johnson v. Harrah’s Kansas Casino Corp. threshold inquiry about whether the Tribe would be financially liable for the entities’ obligations.
- On appeal, the Tenth Circuit held the Johnson threshold was misplaced and adopted a multi-factor test to assess whether the Authority and Casino are subordinate economic entities entitled to share in the Tribe’s immunity, then reversed and remanded for further proceedings on waiver.
- The court also dismissed BMG’s protective cross-appeal for lack of jurisdiction and remanded on the waiver issue to the district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard for immunity of tribal economic entities | BMG argues Johnson controls, requiring a financial-threshold inquiry. | Authority/Casino contend Johnson’s factors apply, with financial impact as a threshold. | Rejected; Johnson misapplied; adopted multi-factor test. |
| Appropriate test to determine subordinate economic entity status | BMG asserts entities are too remote from the Tribe to share immunity. | Authority/Casino assert close governmental relationship justifies immunity. | Court adopts multi-factor framework (creation, purpose, structure, intent, financial relation, policy). |
| Waiver of immunity through licensing agreements | Waiver via forum-selection clauses should bar immunity. | Waiver issue not decided; remand appropriate for district court. | Remand for district court to resolve waiver in the first instance. |
| Jurisdictional posture of BMG’s cross-appeal | BMG seeks pendent jurisdiction over waiver issue. | Pendent jurisdiction not appropriate; waiver separate from immunity ruling. | Cross-appeal dismissed for lack of jurisdiction. |
Key Cases Cited
- Native American Distrib., Inc. v. Seneca-Cayuga Tobacco Co., 546 F.3d 1288 (10th Cir. 2008) (multifactor approach; rejects threshold-only analysis; governs tribal-immunity scope of entities closely tied to tribe)
- Allen v. Gold Country Casino, 464 F.3d 1044 (9th Cir. 2006) (recognizes subordinate economic entities may share immunity; multi-factor approach)
- Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751 (1998) (acknowledges immunity extends to some tribal economic activities; Congress policy support for immunity)
- Cabazon Band of Mission Indians v. California, 480 U.S. 202 (1987) (tribal self-government and economic development as purposes of IGRA and immunity)
- Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978) (describes tribal sovereignty and inherent immunity concepts)