Quinault Indian Nation v. Mary Pearson
868 F.3d 1093
| 9th Cir. | 2017Background
- The Quinault Indian Nation sued the Comenouts in 2010 alleging RICO and breach of contract for selling untaxed cigarettes and seeking about $120 million.
- After Edward Comenout died, his Estate asserted counterclaims seeking (a) declaratory relief that Edward did not violate the cigarette tax code and building/business permits, (b) lost profits and damages from denial of permits and the suit, (c) mandamus ordering permits, and (d) treble damages for alleged price-fixing between the Nation and Washington.
- The Nation moved to dismiss and then voluntarily moved to dismiss the action under Fed. R. Civ. P. 41(a) when the underlying reasons for suit changed; the Estate opposed and moved to amend its counterclaims.
- The district court dismissed the Estate’s counterclaims as barred by tribal sovereign immunity and denied leave to amend as futile; the court then dismissed the action under Rule 41(a)(2).
- On appeal, the Ninth Circuit affirmed, holding the Nation retained sovereign immunity as to the Estate’s counterclaims and the proposed amendments would not cure that defect.
Issues
| Issue | Plaintiff's Argument (Estate) | Defendant's Argument (Nation) | Held |
|---|---|---|---|
| Whether tribal sovereign immunity bars the Estate’s counterclaims | Filing suit by the Nation waived immunity or the counterclaims qualify as recoupment, so they may proceed | Filing suit does not effect an unequivocal waiver; counterclaims seek affirmative relief beyond the suit | Held: Immunity bars the counterclaims; filing suit alone did not waive immunity |
| Whether bringing the suit constitutes a wholesale waiver of sovereign immunity | Nation’s initiation of litigation opened it to counterclaims | A tribe does not waive immunity simply by suing; Supreme Court precedent rejects automatic waiver | Held: No wholesale waiver from filing suit |
| Whether any limited/partial waiver occurred with respect to the Estate’s counterclaims | Estate argued Nation submitted to adjudication of related issues (declaratory relief) | Nation only sued on RICO and contract and did not unequivocally consent to counterclaims | Held: No unequivocal waiver to any individual counterclaim |
| Whether counterclaims qualify as recoupment (permitting adjudication despite immunity) | Estate contended counterclaims arose from same transaction and sought offset/reduction | Counterclaims seek non-monetary relief and monetary relief not limited to the Nation’s claim amount and arise from different transactions | Held: Not recoupment; counterclaims do not meet recoupment criteria |
| Whether denial of leave to amend was an abuse of discretion | Estate argued amendments would add facts to state valid claims | Nation argued proposed amendments still would be barred by sovereign immunity | Held: Denial affirmed; amendments would be futile because immunity bar remained |
Key Cases Cited
- Michigan v. Bay Mills Indian Cmty., 134 S. Ct. 2024 (2014) (tribal sovereign immunity recognized as inherent common-law immunity)
- Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978) (sovereign immunity is a common-law immunity from suit)
- Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751 (1998) (tribes can waive immunity but waiver must be unequivocal)
- Okla. Tax Comm’n v. Citizen Band Potawatomi Indian Tribe of Okla., 498 U.S. 505 (1991) (filing suit does not waive immunity to counterclaims that could not otherwise be brought)
- Bull v. United States, 295 U.S. 247 (1935) (United States impliedly waives immunity to recoupment counterclaims)
- United States v. Oregon, 657 F.2d 1009 (9th Cir. 1981) (equitable in rem context where intervention and agreement constituted consent to federal adjudication)
- McClendon v. United States, 885 F.2d 627 (9th Cir. 1989) (filing suit does not result in wholesale waiver of tribal immunity)
- United States v. Washington, 853 F.3d 946 (9th Cir. 2017) (defining recoupment: same transaction, same nature of relief, amount not exceeding plaintiff’s claim)
- Hamilton v. Nakai, 453 F.2d 152 (9th Cir. 1971) (tribal immunity analogous to the United States for counterclaims)
- Rupp v. Omaha Indian Tribe, 45 F.3d 1241 (8th Cir. 1995) (tribal actions that expressly submit issues to court can permit counterclaims)
- Arizona v. Tohono O’odham Nation, 818 F.3d 549 (9th Cir. 2016) (tribal sovereign immunity bars tort claims against tribes)