Guidiville Rancheria of California v. United States
704 F. App'x 655
| 9th Cir. | 2017Background
- Dispute over redevelopment of Point Molate (former Navy fuel depot) involving City of Richmond, developer Upstream Point Molate, LLC, and Guidiville Band of Pomo Indians (the Tribe).
- Upstream and the Tribe sued the City for breach of the Land Disposition Agreement (LDA) and breach of the implied covenant of good faith and fair dealing after the City declined to permit a casino use.
- Plaintiffs allege Mayor McLaughlin, acting for the City, lobbied federal and state officials to deny or delay federal approvals for the Tribe’s gaming application, which was a condition precedent under the LDA.
- City issued Resolution 23-11 (April 5, 2011) concluding casino use was not allowed, citing federal delays and opposition; plaintiffs claim those delays were caused by the City’s covert lobbying.
- District court granted judgment on the pleadings for City, dismissed contract and bad-faith claims, denied leave to amend, and awarded fees; Ninth Circuit reviewed and partially reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TAC plausibly pleads breach of implied covenant for interfering with condition precedent (federal approvals) | City officials (Mayor) actively lobbied to obstruct federal approvals, preventing condition precedent and breaching duty to facilitate | City not liable for Mayor’s extrinsic lobbying; waiver in Sixth Amendment precludes claims | Reverse: TAC plausibly alleges breach; facts about Mayor acting in official capacity raise triable issues; waiver doesn’t bar post‑May 18, 2010 acts |
| Whether TAC states breach of express LDA §2.8 (good‑faith exclusive negotiation for 120 days) | City failed to negotiate in good faith; conduct amounted to go‑through‑the‑motions negotiations | Allegations are conclusory and insufficient to state breach of express term | Affirm in part: district court properly dismissed express‑term claim as pleaded, but plaintiffs may amend with factual allegations |
| Whether district court abused discretion by denying leave to amend (Proposed FAC) | Proposed FAC adds non‑conclusory facts showing perfunctory negotiations, attendance-only City reps, litigation during negotiation period | Denial was appropriate because prior pleadings insufficient | Reverse: court abused discretion; plaintiffs may file Proposed Fourth Amended Complaint |
| Whether Tribe waived sovereign immunity as to attorneys’ fees | Tribe requested attorneys’ fees as part of relief, submitting to jurisdiction on that issue | Tribe retains sovereign immunity | Court agrees Tribe waived immunity for fee issue by seeking fees in its complaint; vacates prior fee award pending remand |
Key Cases Cited
- Carma Developers (Cal.), Inc. v. Marathon Dev. California, Inc., 826 P.2d 710 (Cal. 1992) (establishes implied covenant of good faith and fair dealing and its application to discretionary powers)
- Westerbeke Corp. v. Daihatsu Motor Co., 304 F.3d 200 (2d Cir. 2002) (implied covenant requires facilitating occurrence of conditions precedent)
- City of Hollister v. Monterey Ins. Co., 81 Cal. Rptr. 3d 72 (Cal. Ct. App. 2008) (doctrine of prevention and interfering with condition precedent)
- Farmers Ins. Grp. v. County of Santa Clara, 906 P.2d 440 (Cal. 1995) (agency/officer action and attribution to municipal entity as factual question)
- Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes, 120 Cal. Rptr. 3d 797 (Cal. Ct. App. 2010) (town liable for actions of officials acting within authority)
- Placentia Fire Fighters v. City of Placentia, 129 Cal. Rptr. 126 (Cal. Ct. App. 1976) (mere attendance at negotiations can mask bad‑faith bargaining)
- Rupp v. Omaha Indian Tribe, 45 F.3d 1241 (8th Cir. 1995) (requesting relief in federal court can constitute waiver of sovereign immunity on related counterclaims)
- Real Prop. Servs. Corp. v. City of Pasadena, 30 Cal. Rptr. 2d 536 (Cal. Ct. App. 1994) (California law applies to fee awards against non‑parties/third‑party beneficiaries)