845 F. Supp. 2d 1178
D. Colo.2011Background
- Plaintiffs filed in Denver District Court on April 5, 2011 alleging Western Sky Financial offered online loans to Colorado consumers, violating Colorado UCC and Colorado CPA.
- Loan agreements state they are governed by the Indian Commerce Clause and the laws of the Cheyenne River Sioux Tribe, with borrowers agreeing to tribal jurisdiction.
- Western Sky’s website asserts loans fall under Cheyenne River Sioux Tribal Court jurisdiction and exclude other state or federal law.
- Defendant Webb is a Cheyenne River Sioux Tribe member; Western Sky operates on the reservation but is not Tribe-owned.
- Defendants removed the case to federal court asserting federal question jurisdiction, arguing preemption of state-law claims by federal law, on April 5, 2011.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is removal proper under complete preemption? | No complete preemption; state-law claims remain state-law claims. | Federal statute preempts state-law claims, enabling removal. | Not removable under complete preemption. |
| Does a federal question arise from tribal-law references in pleadings? | Alleges state-law violations; no federal question pleaded. | Contract clauses and tribal jurisdiction create federal question. | No federal question inherent or essential to claims. |
| Can tribal immunity/Indian affairs regulation provide removal basis? | Tribal immunity is a defense, not removal basis. | Tribal immunity/Indian affairs regulation preempts state claims and supports removal. | Not a basis for removal; tribal immunity is not a removal source. |
Key Cases Cited
- Caterpillar Inc. v. Williams, 482 U.S. 386 (U.S. 1987) (well-pleaded complaint rule; removal only for federal questions or complete preemption)
- Schmeling v. NORDAM, 97 F.3d 1336 (10th Cir. 1996) (federal defenses, including preemption, do not authorize removal)
- Oklahoma Tax Comm’n v. Graham, 489 U.S. 838 (U.S. 1989) (tribal immunity does not itself support removal)
- Metropolitan Life Ins. v. Taylor, 481 U.S. 58 (U.S. 1987) (complete preemption framework; preemption can convert state claims to federal ones)
- Muhammad v. Comanche Nation Casino, 742 F. Supp. 2d 1268 (W.D. Okla. 2010) (federal interest can render removal appropriate where federal element is essential)
- Excell, Inc. v. Sterling Boiler & Mechanical, Inc., 106 F.3d 318 (10th Cir. 1997) (authority for awarding fees when removal is improper)