Lead Opinion
Opinion by Judge TALLMAN; Dissent by Chief District Judge JARVEY.
ORDER
The panel has voted to amend its previous opinion and issues the following opinion to replace it. With this amendment, the panel has voted to deny the petitions for panel rehearing and to deny the petitions for rehearing en banc.
The full court has been advised of the petitions for rehearing en banc and no judge has requested a vote on whether to rehear the matter en banc. Fed. R.App. P. 35.
The petitions for panel rehearing and petitions for rehearing en banc are DENIED. No future petitions for rehearing or petitions for rehearing en banc will be entertained.
OPINION
Sixteen years ago more than sixty Native American tribes entered into Tribal-State Gaming Compacts with the State of California. Sadly, the long and tortured history leading to the culmination of these Compacts did not cease there. Rather, litigation based on ambiguous provisions as to the number of authorized gaming devices has ensued for most of the duration of these Compacts. See In re Indian Gaming Related Cases,
Pauma sued the State based on our pri- or decision in Cachil Dehe Band of Wintun Indians of the Colusa Indian Community v. California (“Colusa II ”),
We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
I
We begin our journey with a quick overview of the weathered past between Native American tribes and the State of California, and then discuss the complicated procedural history that leads us here.
A
In 1988, Congress attempted to strike a delicate balance between the sovereignty of states and federally recognized Native American tribes by passing IGRA. The purpose of IGRA is well established:
IGRA was Congress’ compromise solution to the difficult questions involving Indian gaming. The Act was passed in order to provide “a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments” and “to shield [tribal gaming] from organized crime and other corrupting influences to ensure that the Indian tribe is the primary beneficiary of the gaming operation.” 25 U.S.C. § 2702(1), (2). IGRA is an example of “cooperative federalism” in that it seeks to balance the competing sovereign interests of the federal government, state governments, and Indian tribes, by giving each a role in the regulatory scheme.
Artichoke Joe’s Cal. Grand Casino v. Norton,
California did not immediately allow Indian gaming within its boundaries after the passage of IGRA. Some gubernatorial administrations were hostile to tribes conducting Class III gaming because it was then prohibited by California’s Constitution, and so the State refused to negotiate with the tribes to permit it. See id. at 1098-99. In 1998, the people of California spoke by passing the tribes’ ballot initiative — Proposition 5 (codified at Cal. Gov’t Code §§ 98000-98012). See Hotel Emps. & Rest. Emps. Int’l Union v. Davis,
In September 1999, several tribes began negotiating with the State to enter nearly identical Compacts to operate Class III, or casino-style, gambling (the “1999 Compact”). In April 2000, Pauma joined more than sixty other tribes who ultimately signed the 1999 Compact. The 1999 Compact contains a provision limiting the number of licenses
By December 2003, the State informed the tribes that the collective license pool had been exhausted — without stating the total number of licenses actually authorized — and Pauma received only 200 licenses in that draw instead of its requested 750. Thus several tribes, including Pau-ma, began negotiating with the State to amend their Compacts in order to abolish the license pool provision and gain access to an unlimited number of licenses. The State demanded substantially more money per operable license during negotiations, Rincon Band of Luiseno Mission Indians v. Schwarzenegger,
Several lawsuits ensued. By 2009-2010, these suits had percolated in the district courts for several years, and culminated in dispositive opinions rendered by our court. See Colusa II,
B
Shortly after the district court in Colusa rendered its decision holding that more licenses existed than the State had allowed, Pauma filed a complaint asserting eighteen claims attacking the formation of the 2004 Amendment under various theories, including mistake and misrepresentation. Pauma notes that it has remained at roughly 1,050 licenses since December 2003 when the State first asserted that the license pool had been depleted, while two neighboring tribes operate at least 2,000 gaming devices apiece. Pauma executed the 2004 Amendment because it needed to have at least 2,000 licenses in order to secure a viable deal with a Las Vegas-style operator. But after the putative deals fell through, Pauma continued paying California the exorbitantly expensive 2004 Amendment prices for the same machines it acquired under the 1999 Compact provisions. Under the original 1999 Compact, Pauma paid $315,000 annually for the 1,050 machines. Under the 2004 Amendment, Pauma paid $7.75 million annually. Pau-ma sought reformation, injunctive relief, rescission, and restitution.
In April 2010, the 'United States District Court for the Southern District of California granted Pauma’s request for injunctive relief from the annual $7.75 million payments, permitting Pauma to revert to the 1999 Compact rate. The State appealed. On the prior appeal, No. 10-55713, we left the injunction in place but remanded to the district court for reconsideration of the preliminary injunction factors in light of recent cases, including Colusa II. On remand, the case was reassigned to three different district judges before the court finally ruled on the summary judgment motions, leaving the injunction in place.
Presently before us is the district court’s summary judgment ruling in favor of Pau-ma on its misrepresentation claim. In light of our ruling in Colusa II, the district court found the State had misrepresented the number of licenses available in December 2003 when it told Pauma the pool was
The district court entered final judgment in December 2013, but was immediately asked by Pauma to vacate the order so it could request further relief. Pauma sought a ruling on two additional claims labeled “bad faith/violation of IGRA” so that the Tribe would be entitled to reformation rather than rescission. The district court denied the request as moot since it would not result in a remedy different from the one already provided to Pauma, and held it would fail on the merits in any event. This ruling triggered Pau-ma’s mandamus petition, which we denied as premature earlier this year.
II
We review a district court’s grant of summary judgment de novo. Big Lagoon Rancheria v. California,
“We review the district court’s choice of remedy for abuse of discretion.” Id. at 1082. A misapplication of the correct legal rule constitutes an abuse of discretion. United States v. Hinkson,
The heart of the State’s argument before us focuses on whether there was a “fact in existence” that it misrepresented to Pauma during the 2004 negotiations. Thus, we review whether Colusa II’s holding that 40,201 licenses were available— meaning 8,050 remained in December 2003 when the State told Pauma that the license pool had been depleted — constitutes a “fact in existence” giving rise to liability under Pauma’s misrepresentation claim. We hold that, unlike a change in judicial interpretation of a statute or law, the doctrine of retroactivity does not apply to contracts. Once there has been a final judicial interpretation of an ambiguous contract provision, that is and has always been the correct interpretation from the document’s inception.
In order to establish its misrepresentation claim, Pauma must demonstrate: (1) the State made a misrepresentation about a fact in existence, (2) that was either fraudulent or material, (3) which induced Pauma to enter into the 2004 Amendment, and (4) Pauma was justified in relying on the State’s misrepresentation. See Restatement (Second) of Contracts § 164(1) (1981); see also Addisu v. Fred Meyer, Inc.,
Furthermore, “an assertion need not be fraudulent to be a misrepresentation” so long as “it is material.” Id. § 159 cmt. a; cf. Reliance Fin. Corp. v. Miller,
While both parties dispute whether the doctrine of retroactivity applies, that doctrine is a red herring because we are dealing with a contract provision. The State argues that our holding in Colusa II does not apply “retroactively.” In essence, the State asserts that the district court erred in granting summary judgment for Pauma because the license pool did not expand until mid-2009 when a district court first handed down its ruling in Cachil Dehe Band of Wintun Indians of the Colusa Indian Community v. Califor
We find that the term “retroactive” is a misnomer in the realm of contract interpretation. Once a court has interpreted an ambiguous contract provision that is and has always been the correct interpretation from its formation. Although the cases discussing the retroactivity of judicial decisions interpreting statutes may be instructive, a contract is fundamentally different from a statute or a body of law. A contract is a private agreement formed between two parties to represent their mutual intent. See Restatement (Second) of Contracts § 3. Thus, a contract provision has only one true meaning — what it meant when written — even though the parties may later dispute the correct interpretation. By contrast, a statute is enacted by Congress and the understanding of its provisions may evolve over time, often through judicial interpretations or legislative amendments.
“[T]he fundamental goal of contract interpretation is to give effect to the mutual intent of the parties as it existed at the time of contracting.” U.S. Cellular Inv. Co. v. GTE Mobilnet, Inc.,
When dealing with interpretation of a contract there is no such thing as a “change in the law” — once a final judicial decision determines what the contested language supports, that is it. The State’s argument that Colusa II “changed” the number of licenses available under the license pool provision defies logic. As is typical in contract interpretation cases, the dispute was between the parties’ competing calculations. Once we decreed that 40,201 licenses were available under the formula provision based on a reasonable interpretation of the contract language and the intention of the parties at the time it was formed, we resolved the dispute. Co-lusa II,
In Colusa II, we found that the State did not adequately explain why it had chosen 32,151 for the total available licenses since “the foundation for this ... number is at odds with the plain language of the contract and with an interpretation of part of the formula that is now agreed upon by both parties.” Id. at 1076; see also id. at 1078 nn. 9 & 12. We calculated the correct number of licenses that “were authorized for distribution statewide through the license draw process,” to be 40,201, id. at 1082, and then we turned to the opinion’s prospective effect on other tribes. We
The formula for calculating the license pool never changed — it just took over a decade to reach a final judicial interpretation which settled a longstanding dispute over the number of licenses it authorized. Innocent misrepresentation of a different number does not require a fraudulent or misleading intent. See Restatement (Second) of Contracts § 159 cmt. a. It simply requires a fact, which is material, to be false. Id. § 159 cmts. a, c. The formula stated in the 1999 Compact is a fact. The number of tribes with and without Compacts as of the listed date (September 1, 1999) was an ascertainable, existing fact. See Colusa II,
Understandably, the State “expresses a sense of unfairness engendered by the retrospective application of a new judicial interpretation of an [existing contract provision]. But the essence of judicial decisionmaking necessarily involves some peril to individual expectations.” Morales-Izquierdo v. Dep’t of Homeland Sec.,
The State’s remaining arguments regarding the misrepresentation claim warrant only brief discussion. First, the State’s argument that the license pool provision was not material to the 1999 Compacts borders on the incredible. See Colu-sa II,
IV
After granting summary judgment in favor of Pauma on its innocent misrepresentation claim, the district court turned to the appropriate remedy. Since the Compacts include a limited waiver of sovereign immunity that allows for suit seeking an equitable remedy, but not one seeking monetary damages, we must first decide what the correct remedy is. Then we determine whether that remedy is barred by the Eleventh Amendment or if it falls within the State’s limited waiver.
A
The district court erred in awarding Pauma $36.2 million under the guise of “specific performance.” Specific performance is a remedy associated with breach of contract. Restatement (Second) of Contracts § 357; 81A C.J.S. Specific Performance § 4 (2015) (“[A] cause for specific performance ordinarily cannot lie until there has been a breach of the contract.”). “A party who has avoided a contract on the ground of ... misrepresentation ... is entitled to restitution for any benefit that he has conferred on the other party by way of part performance or reliance.” Restatement (Second) of Contracts § 376; 1 Witkin, Summary of California Law, Contracts § 1022 (10th ed.2005) (“A person who pays money under the mistaken belief that he or she is under a duty to do so may recover it.”). Furthermore, “[s]pecific performance ... will not be granted unless the terms of the contract are sufficiently certain to provide a basis for an appropriate order.” Restatement (Second) of Contracts § 362.
Where, as here, no breach of a contract has been alleged, but rather a challenge to its formation — i. e., Pauma would not have entered into the 2004 Amendment had it known additional licenses were available at the cheaper 1999 Compact rates — the contract is voidable and the appropriate remedy is rescission and restitution. See 1 Witkin, Summary of California Law, Contracts § 307 (10th ed.2005) (noting innocent misrepresentation is grounds for rescission); see also Reliance Fin. Corp.,
Moreover, one cannot specifically perform something that is not a term in the contract. Cf. Restatement (Second) of Contracts § 362. The Compact did not contain a clause for dealing with overpay-ments. The sole option for returning Pau-ma to the status quo ante was equitable restitution. Id. § 376; see Ambassador Hotel Co. v. Wei-Chuan Inv.,
Under general contract principles, “[w]hen calculating restitution, we must offset the Plaintiffs’ award by the value of any benefits that Plaintiffs received from the [Defendant under the contract, so that only the actual, or net, loss is compensated.” Republic Sav. Bank, F.S.B. v. United States,
The State argues that, although this would return Pauma to the status quo ante in theory, in reality it would unjustly enrich Pauma vis-a-vis the other tribes who were parties to the 1999 Compact because the other tribes were unable to obtain “unlimited” machines as Pauma could under the 2004 Amendment and thus did not earn additional profits. Essentially, the State argues that Pauma will receive a windfall of roughly $16 million by sitting on the sidelines during the Colusa litigation.
However, the State’s argument depends on viewing the situation holistically, in contravention to general litigation principles. The district court correctly stated it must deal solely with the parties before it. See, e.g., Boating Indus. Ass’ns v. Marshall,
Pauma’s argument for reformation meets a similar fate. On cross-appeal, Pauma requests reformation of the 2004 Amendment — rather than rescission — so that Pauma may keep the amended contract’s extended term limit (expiring in 2030 instead of 2020) at the more favorable 1999 Compact price rates. “[However, reformation is proper only in cases of fraud and [mutual] mistake.” Skinner v. Northrop Grumman Ret. Plan B,
In sum, the district court erred in applying the law of contractual remedies by awarding Pauma specific performance rather than ordering rescission and restitution. But because neither side challenges the calculation of the remedy, only whether a setoff should be applied or reformation ordered as a superior remedy— both of which we reject — we affirm the district court’s award to Pauma of $36,235,147.01 under the equitable remedies of rescission and restitution.
B
Because the State must refund the $36.2 million in overpayments, we next consider whether the district court correctly held that the State had waived its Eleventh Amendment sovereign immunity in this case to permit such relief.
“[T]he rule has evolved that a suit by private parties seeking to impose a liability which must be paid from public funds in the state treasury is barred by the Eleventh Amendment.” Edelman v. Jordan,
“However, there are exceptions to this general bar.” N.E. Med. Servs., Inc. v. Cal. Dep’t Health Care Servs.,
Here, the State waived its Eleventh Amendment sovereign immunity through an explicit contractual waiver. The 1999 Compact contains a limited waiver of sovereign immunity on behalf of both the State and the Tribe, which the 2004 Amendment left undisturbed. It reads in relevant part:
Sec. 9.4. Limited Waiver of Sovereign Immunity.
(a) In the event that a dispute is to be resolved in federal court ..., the State and the Tribe expressly consent to be sued therein and waive any immunity therefrom that they may have provided that:
(1) The dispute is limited solely to issues arising under this Gaming Compact;
*1170 (2) Neither side makes any claim for monetary damages (that is, only injunc-tive, specific performance, including enforcement of a provision of this Compact requiring payment of money to one or another of the parties, or declaratory relief is sought);....
This is an express waiver that falls within the exception to the Eleventh Amendment delineated in Edelman — but the parties dispute the scope of the waiver. We must determine whether the exclusion for monetary damages in Section 9.4(a)(2) includes authorization to seek the remedy of rescission and restitution.
We hold that the proper remedy here does not trigger the exclusion provision, and thus the State waived its sovereign immunity for Pauma’s misrepresentation claim. We begin by analyzing the language of the contract itself. See Colusa II,
“A written contract must be read as a whole and every part interpreted with reference to the whole, with preference given to reasonable interpretations.” Wapato Heritage, L.L.C. v. United States,
The waiver applies “provided that ... [n]either side makes any claim for monetary damages (that is, only injunctive, specific performance, including enforcement of a provision of this Compact requiring payment of money to one or another of the parties [which must mean either Pauma or
In sum, the contractual waiver clearly envisions restitution as falling within its purview, and only actions for monetary damages or actions not arising from the Compact itself to be excluded. The proper remedy for Pauma due to the State’s misrepresentation of the number of licenses available under the 1999 Compact’s formula is rescission of the 2004 Amendment and restitution for the overpayments made. Therefore, the State contractually waived to this extent its Eleventh Amendment sovereign immunity and Pauma was not barred from bringing its misrepresentation claim seeking rescission and restitution.
Y
On cross-appeal, Pauma asserts the district court erred by denying summary judgment on the Tribe’s fifth and sixth claims for relief — styled as bad faith/IGRA violation claims. Pauma provides a lengthy and fact — intensive explanation why it thinks the State acted in bad faith with respect to the entirety of their course of dealings over the last fifteen years. The Tribe relies heavily upon our recent decision in Rincon, involving a different California tribe, that upheld a finding of bad faith under IGRA. However, in the process, Pauma ignores the explicit statutory language of IGRA under which it seeks relief. The district court held Pau-ma’s IGRA claims were moot because rescission of the 2004 Amendment had already been granted,
The plain language of IGRA does not support Pauma’s argument. IGRA states that a Native American tribe “shall request” a state to enter into negotiations for the purposes of entering a Tribal-State Gaming Compact, and “[u]pon receiving such a request, the State shall negotiate with the Indian Tribe in good faith to enter into such a compact.” 25 U.S.C. § 2710(d)(3)(A) (emphasis added). In order to give effect to this language, the statute vests federal district courts with jurisdiction over “any cause of action initiated by an Indian tribe arising from the failure of a State to enter into negotiations with the Indian tribe for the purpose of entering into a Tribal-State compact under paragraph (3) or to conduct such negotiations in good faith [.]” Id. § 2710(d)(7)(A)© (emphasis added).
The next subsection describes, in detail, the procedure a tribe must follow if a state does not adhere to these mandates. Id. § 2710(d)(7)(B). Specifically, the Native American tribe must first introduce evidence that “a Tribal-State compact has not been entered into under paragraph (3),” and “the State did not respond to the request of the Indian tribe to negotiate such a compact or did not respond to such request in good faith[.]” Id. § 2710(d)(7)(B)(ii)(I), (II) (emphasis added). Then, IGRA provides a remedy if such an event should occur: “If ... the court finds that the State has failed to negotiate in good faith with the Indian tribe to conclude a Tribal-State compact governing the conduct of gaming activities, the court shall order the State and the Indian Tribe to conclude such a compact within a 60-day period.” Id. § 2710(d)(7)(B)(iii) (emphasis added). This same section also lists factors a court may consider when determining whether a State has negotiated in good faith. Id.
The detailed procedures set forth in IGRA allow for redress by Native American tribes when a State refuses to negotiate or negotiates in bad faith for a gaming Compact. These procedures, by their own language, simply do not apply when the State and the Tribe have actually reached a Compact. See id. § 2710(d)(7)(B)(ii)(I). Rincon does not hold otherwise. Cf.
Therefore, the district court correctly concluded: “Although [ ] IGRA may allow a court to reform or rescind an unlawful agreement (which is what Pauma wanted until now), it does not allow the Court to turn back the clock and compel re-negotiation of an agreement actually reached ten years ago, let alone one that has been rescinded and never would have been negotiated in the first place in light of the relief the Court has already granted in this case.” The relief Pauma seeks in its cross-appeal is not available under the plain statutory language of IGRA, and we affirm the district court’s denial of Pau-ma’s summary judgment motion on this ground.
VI
In conclusion, we hold that once a court’s judgment interpreting an ambiguous contract provision becomes final, that is and has always been the correct interpretation from its inception. As such, the State innocently misrepresented a material fact when it erroneously informed Pauma the 1999 Compact’s license pool had been depleted based on its miscalculation of the formula. Since this misrepresentation induced Pauma to enter into the much more expensive 2004 Amendment, the Tribe is entitled to rescission of the amendment and restitution for the $86.2 million in overpayments made to the State. The Eleventh Amendment does not bar this suit because the State contractually waived its sovereign immunity for claims arising out of the Compacts seeking such relief. Finally, Pauma is not entitled on cross-appeal to seek redress under IGRA because the plain language of the statute precludes relief when the Tribe and the State actually enter into a Compact.
AFFIRMED. Each party shall bear its own costs.
Notes
. The sole surviving provision of Proposition 5 is the statutory waiver of sovereign immunity by the State for claims arising out of violations of IGRA. Cal. Gov't Code § 98005. The California Supreme Court found this provision severable and recognized that the language was meant to effectuate IGRA since the U.S. Supreme Court had recently stripped the Act of its teeth in Seminole Tribe of Florida v. Florida,
. Each license is the equivalent of one slot machine or electronic video gaming device, and each tribe was limited to a maximum of 2,000 licenses.
.The formula, which has been the subject of much litigation, is found in section 4.3.2.2(a)(1) and reads:
The maximum number of machines that all Compact Tribes in the aggregate may license pursuant to this Section shall be a sum equal to 350 multiplied by the number of Non-Compact tribes as of September 1, 1999, plus the difference between 350 and the lesser number authorized under Section 4.3.1.
Section 4.3.1 states tribes may not operate more gaming devices than "the larger of” "(a) A number of terminals equal to the number of Gaming Devices operated by the Tribe on September 1, 1999; or (b) Three hundred fifty (350) Gaming Devices.”
. For more detail on the unsuccessful deal with Caesars, see Pauma Band of Luiseno Mission Indians v. Harrah’s Operating Co., No. D050667,
. Pauma’s mandamus petition essentially challenged the district court’s decision to rule solely on its misrepresentation claim, and refusal to reach any of the other claims-such as the Tribe's bad faith claims under IGRA. We allowed Pauma to assert such claims in its cross-appeal, and Pauma has chosen to do so. We address them below.
. We note that the district court had before it Pauma’s claims for either innocent/material misrepresentation or fraudulent/negligent misrepresentation — and the court ruled for Pauma solely on the former. Thus, we refuse to consider any of Pauma's assertions that the State knowingly acted in bad faith or with any kind of evil intent. The formula was confusing. We definitively resolved the issue in 2010. Nothing in our decision in Colusa II suggests the State should have known the correct number of licenses when negotiating with Pauma in 2003-2004, and we refuse to so hold now. We review only whether innocent misrepresentation was properly applicable.
. Therefore, the dissent’s reliance on Curtin v. United Airlines, Inc. is misplaced as it involves the judicial interpretation of a provision of the Warsaw Convention; a legislatively enacted document, similar to a statute, rather than a contract. See
. "[I]t is undisputed that the State’s negotiation team actually drafted [this provision] in the Compact.” Colusa I,
. We note that most tribes have already received their licenses under Colusa II, which approved the district court’s remedy of reopening the draw process for the remainder of the licenses. By contrast, Pauma is one of only five tribes who chose to amend its Compact and thus paid higher prices for licenses which it should have been able to obtain under the original 1999 Compact.
. The district court relied, as Pauma does on appeal, on Bowen v. Massachusetts,
We have already stated that Bowen does "not implicate Eleventh Amendment concerns” since it only analyzed the statutory language of the APA. Native Vill. of Noatak v. Blatchford,
.The State itself asserts that no provision in the contract required it to pay Pauma money when arguing that specific performance was the wrong remedy. That argument cuts against the State here given the language of the agreement.
.In any event, California — unlike many states — has chosen to legislatively enact a broad statutory waiver of sovereign immunity for-claims arising out of violations of IGRA. See Cal. Gov’t Code § 98005; Hotel Emps.,
. Neither of the parties briefed this issue so we need not reach it, but we also note the district court's analysis is supported by our recent en banc decision in Big Lagoon Ranchería,
. Pauma’s claims are not inconsistent, as the district court found. Although Pauma did not use the words "bad faith” in the body of its
The district court also found that Pauma was requesting different relief, but in fact Pauma had been requesting “reformation” based on IGRA claims five and six in the complaint from the beginning. Pauma merely requested “rescission” and “restitution” in addition, with claim ten (misrepresentation) providing a basis for such relief. Thus, Pau-ma's claims in its complaint and summary judgment motion are not inconsistent.
. Pauma makes conclusory references to the claims it advanced in its mandamus petition, asking the court to vacate the magistrate judge’s order denying Pauma's motion to compel discovery and to reassign the case to a different district court judge based on her handling of the IGRA claims. We deny both of these requests as moot in light of our holding foreclosing further pursuit of Pau-ma’s claims under IGRA.
Dissenting Opinion
dissenting:
I agree with the majority’s conclusion that courts determine contracting parties’ intent as of the time the contract is executed. I disagree, however, that California committed the tort of misrepresentation by interpreting the Compact differently than a later court decision. The provision regarding the number of available licenses in the Compact was hopelessly ambiguous, California, the compacting tribes, the district court and this court all interpreted it differently. That this court’s opinion differed from that offered by California does not establish that California made “an assertion that [was] not in accord with the facts” as they existed at the time the assertion was made. Restatement (Second) of Contracts § 159 & cmt. c.
The decision in Colusa II was not the result of any judicial fact finding. In fact, this court rejected the parties’ extrinsic evidence for contract interpretation purposes and determined the number of available licenses as a matter of law. Because extrinsic evidence was rejected and the number determined as a matter of law, all parties to the Compact were on equal footing with respect to their ability to interpret this ambiguous provision. The majority is correct when it notes that any party could have sued to get more clarity. The
On the misrepresentation issue, Curtin v. United Airlines, Inc.,
In Curtin, passengers who had settled their lost luggage claims for $635 sued claiming, among other things, that the settlement agreements were procured by United’s misrepresentation of its obligation under the Warsaw Convention, as later determined by the Court of Appeals. However, the District of Columbia Circuit held that United did not make a misrepresentation by reasonably interpreting the Warsaw Convention differently than the later District of Columbia Court of Appeals decision. This decision is sensible, intuitive and analogous to what happened in the matter now before the court. Because I believe that the State’s interpretation of this ambiguous contractual provision does not qualify under the common law definition of a material misrepresentation, I respectfully dissent.
I also do not believe that the State of California waived sovereign immunity with respect to this claim. The 1999 Compact waives immunity as follows:
Sec. 9.4. Limited Waiver of Sovereign Immunity.
(a) In the event that a dispute is to be resolved in federal court ..., the State and the Tribe expressly consent to be sued therein and waive any immunity therefrom that they may have provided that:
(1) The dispute is limited solely to issue’s arising under this Gaming Compact;
(2) Neither side makes any claim for monetary damages (that is, only injunc-tive, specific performance, including enforcement of a provision of this Compact requiring payment of money to one or another of the parties, or declaratory relief is sought);....
I agree with the majority that the remedy of specific performance is not available in this case. The majority upholds the award as restitution, concluding that the Compact waives immunity against claims for restitution because the Compact waives immunity against claims for “specific performance, including payment of money to one or another of the parties.” I disagree with the majority’s reading of the waiver.
The limited waiver of sovereign immunity is well drafted and clear. It states that neither side can make a claim for monetary damages. It then defines the waiver, beginning with the words “that is.” The phrase “that is” is commonly thought of as a shorthand version of the phrase “that is to say.” It is used to preface a more
The majority infers a waiver of sovereign immunity for restitution from a canon of contract interpretation that prefers interpretations that do not render other terms “superfluous, useless or inexplicable.” It finds that reading the language “including payment of money to one or another of the parties” as allowing monetary payment only in the context of specific performance would render the clause superfluous because the Compact’s payment provisions run only from Pauma to the State. But this reading disregards the explicit text of the clause. The clause makes clear that the parties intended “specific performance” to include monetary payments only when the Compact requires them. This language is the parties’ clear recognition of Bowen v. Massachusetts,
The monetary damages awarded here do not qualify as injunctive, specific performance or declaratory relief. Because the law demands that waivers of sovereign immunity ordinarily derive only from “the most express language” or “such overwhelming implications from the text as [will] leave no room for any other reasonable construction,” there can be no waiver found here. Edelman v. Jordan,
. I find it more than ironic that Pauma has received monetary damages as a result of Colusa II that were denied to the tribes that won that decision. I find it inequitable.