FOR THE WESTERN DISTRICT OF OKLAHOMA Plaintiff, LOUIS ... · according to Oklahoma substantive law....
Transcript of FOR THE WESTERN DISTRICT OF OKLAHOMA Plaintiff, LOUIS ... · according to Oklahoma substantive law....
IN THE UNITED STATES DISTRICT COURTFOR THE WESTERN DISTRICT OF OKLAHOMA
WELLS FARGO BANK,
Plaintiff,
vs.
LOUIS MAYNAHONAH, MARQUITACARATTINI, KAREN HEMINOKEKY, intheir official capacities as members of theApache Business Committee, GENE FLUTE,RONALD AHTONE, JR., and AUSTINKLINEKOLE, in their official capacities asmembers of the Apache Gaming Commission;and RICHARD J. GRELLNER, in his officialcapacity as hearing officer for the ApacheGaming Commission
Defendants.
))))))))))))))))))
Case No. CIV-11-648-D
DEFENDANTS’ SUPPLEMENTAL BRIEF IN OPPOSITION TOPLAINTIFF’S WELLS FARGO’S EMERGENCY MOTION FOR
TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
Jon E. Brightmire, OBA No. 11623Bryan J. Nowlin, OBA No. 21310DOERNER, SAUNDERS, DANIEL
& ANDERSON, L.L.P.Two West Second Street, Suite 700Tulsa, Oklahoma 74103(918) 582-1211 (telephone)(918) 925-5290 (facsimile)[email protected] for Defendants, Louis Maynahonah, Marquita Carattini,and Karen Heminokeky in their official capacities asmembers of the Apache Business Committee
Joined by: Richard J. Grellner, OBA No. 15521434 NW 18th
Oklahoma City, OK 73103Ph: [email protected] for Ronald Ahtone, Austin Klinekole, andRichard Grellner, in their official capacities for theApache Gaming Commission
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TABLE OF CONTENTS
Page(s)
Introduction ......................................................................................................................... 1
1. The Gaming Equipment Lease does not contemplate arbitration of tribalgaming regulation. .............................................................................................. 2
2. Wells Fargo sought exemption from the Gaming Commission’s licensingrequirements for both its financing to the Tribe and to TGS. ............................ 5
3. IGRA and the State Compact provide exclusive jurisdiction to the tribalgaming commissions to license casino vendors such as TGS. ........................... 8
4. The Apache Gaming Commission has not acted with malice or disregardfor the rights of TGS and Wells Fargo. ............................................................ 10
5. The preliminary injunction is disfavored. ........................................................ 13
6. Wells Fargo cannot prove the four elements necessary for issuance of apreliminary injunction. ..................................................................................... 14
Conclusion ..................................................................................................................... 17
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TABLE OF AUTHORITIES
Page(s)
Federal Cases
Casino Resource Corp. v. Harrah's Entertainment, Inc., 243 F.3d 435(8th Cir. 2001) .......................................................................................................... 9
Gaming Corp. of America v. Dorsey & Whitney, 88 F.3d 536 (8th Cir. 1998) .................. 9
Kiowa Indian Tribe of Oklahoma v. Hoover, 150 F.3d 1163 (10th Cir. 1998)................. 15
Medical Soc. of State of N. Y. v. Toia, 560 F.2d 535 (2nd Cir. 1977)............................... 14
O Centro Espirita Beneficiente Uniao do Vegetal v. Ashcroft, 389 F.3d 973(10th Cir. 2004) en banc)......................................................................................... 13
Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234 (10th Cir. 2001) ............. 15
QEP Field Services Company v. Ute Indian Tribe of Uintah and Ouray Reservation,740 F.Supp.2d 1274 (D.Utah 2010) ....................................................................... 13
Tamiami Partners, Ltd. By and Through Tamiami Development Corp. v. MiccosukeeTribe of Indians of Florida, 63 F.3d 1030, 1049 (11th Cir. 1995)......................... 10
Union Carbide Agricultural Products Co. v. Costle, 632 F.2d 1014 (2nd Cir. 1980) ...... 14
Federal Statutes
Federal Arbitration Act. 9 U.S.C. §1................................................................................. 15
25 U.S.C. § 2701 ................................................................................................................. 8
25 U.S.C. § 2710(b)(2) ........................................................................................................ 4
25 U.S.C. § 2710(d)............................................................................................................. 8
25 U.S.C. § 2710(d)(1)(A)(ii).............................................................................................. 4
25 U.S.C. § 2710(d)(2)(C)................................................................................................... 8
State Statutes
Okla. Stat. tit. 3A, §280....................................................................................................... 9
Okla. Stat. tit. 3A, §281....................................................................................................... 9
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Defendants Louis Maynahonah, Marquita Carattini, and Karen Heminokeky, sued
in their official capacities as members of the Business Committee of Apache Tribe of
Oklahoma (“the Business Committee defendants”), joined by Defendants Ronald Ahtone,
Jr., Austin Klinekole, and Richard Grellner1, in their official capacities as members of the
Apache Gaming Commission (“the Gaming Commission” defendants) for their
Supplemental Response in Opposition to the Plaintiff’s Motion for Temporary
Restraining Order and Preliminary Injunction, and would show the Court as follows:
Introduction
This Court granted the request for temporary restraining order recognizing the
plaintiff’s interest to preserve the issues presented for extraordinary relief for further
litigation in a hearing on a preliminary injunction. The argument against injunctive relief
remains much the same and primarily a legal argument. The Tribe, exclusively, and not
Wells Fargo or TGS, may exercise regulatory jurisdiction in the Tribe’s gaming
enterprise. Wells Fargo seeks to avoid this requirement of federal, state, and tribal law
without pointing to a specific exception in IGRA but by arguing the merits of the Tribe’s
license review. The merits of the Apache Gaming Commission’s license review should
not even be before this Court, as the Gaming Commission itself has not had the
opportunity to rule upon the merits. The Gaming Commission must decide in the first
instance whether any of its licensing regulations have been met, have been violated, and
if violated whether a penalty should apply. Without the ability to both determine its own
1 Defendant Gene Flute is no longer a member of the Apache Gaming Commission. Theposition of chairman is presently vacant.
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jurisdiction, whether violations occur, and whether penalties are warranted for any
violations, the entire regulatory framework of IGRA and the State Compact would be
violated and neutered, to the severe detriment of the Apache Tribe and all tribes
conducting gaming activities.
The Tribe will use this opportunity to submit additional briefing centered on the
following issues: (1) the Gaming Equipment Lease between the Tribe and KAGD does
not contemplate resolution of any licensing issues by private arbitrator, (2) Wells Fargo at
the time of the transaction with the Tribe did not contemplate that licensing issues would
be resolved by binding arbitration as it sought the advice and exemption of the Apache
Gaming Commission, (3) the course of performance under the Gaming Equipment Lease
did not result in the submission of a KAGD license issue to arbitration, (4) the State
Compact and federal law provides the Tribe the exclusive ability to regulate licensing
with casino vendors, and (5) Wells Fargo cannot prove the four elements required for a
preliminary injunction.
1. The Gaming Equipment Lease does not contemplate arbitration of tribalgaming regulation.
The Gaming Equipment Lease was entered into by a company known as KAGD
and the Tribe prior to Wells Fargo extending credit to either the Tribe or TGS. The
Gaming Equipment Lease was “apparently entered into six months prior” to the Wells
Fargo extension of credit to the Tribe and TGS on June 23, 2008. KAGD, which never
received any revenues from the Lease because it assigned it to TGS prior to providing
any gaming machines to the casino, obtained a license from the Apache Gaming
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Commission. The license was obtained apparently solely for the purpose of obtaining
revenues from the casino – as KAGD was to be paid from gaming revenues as
consideration for its assignment of the Lease to TGS. See Exhibit 1, Depository
Agreement at § 3.2(f).
The Gaming Equipment Lease does not mention regulatory issues or licensing, nor
does it include licensing issues within its dispute resolution provisions. The Gaming
Equipment Lease in Section 13 recognizes the right of the Apache Gaming Commission
to regulatory fees and assessments of the Lessor in an amount of up to five thousand
dollars. [Exhibit 2, Gaming Equipment Lease at § 13]. The Lease does not state that the
granting, revocation, or suspension of a license should be submitted to binding arbitration
in line with the dispute resolution clause.
The arbitration clause within the Gaming Equipment Lease contains a qualifier
which prohibits the submission of tribal regulatory issues to private arbitration.
Subsection g of section 22 of the Lease provides:
This language specifically states that the Tribe waives tribal exhaustion only to the extent
permitted by law, which in the case of regulation of gaming is non-delegable under IGRA
and the State Compact. As a result, neither the Tribe nor KAGD could have required the
submission of regulatory disputes to private arbitration when the Lease itself
acknowledges that tribal remedies are not waived if the bypass of a tribal forum is not
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lawful. The “Governing Law” provision of the Lease states that it is to be construed
according to Oklahoma substantive law. Exhibit 2, Gaming Equipment Lease § 20.10.
The State Compact providing for regulatory jurisdiction of the Tribe and licensing of
vendors by the Tribe is Oklahoma law. Finally, a severability clause is present in section
20.8 providing that if a provision conflicts with applicable law, the provision is severed
from the agreement. In this context, the arbitration clause as applied to tribal regulatory
issues is unenforceable and minimally should be considered severed for the purpose of
Wells Fargo’s request for injunctive relief.
Wells Fargo now contends that by executing the Gaming Equipment Lease, the
Tribe agreed to arbitrate any dispute at all regarding licensing and regulation of the
casino vendor in Indian country rather than allow the Apache Gaming Commission to
investigate and make its own determinations. The Apache Gaming Commission is not a
signatory to the Gaming Equipment Lease. The Gaming Ordinance of the Apache Tribe
of Oklahoma – as approved and published by the National Indian Gaming Commission –
does not permit the Apache Business Committee nor the Apache Gaming Commission to
delegate the Gaming Commission’s regulatory functions to private arbitrators.
The Apache Tribe cannot amend its Gaming Ordinance – through a Business
Committee vote, contract, or any other manner – without the approval of the NIGC.
IGRA requires all Indian tribes to submit tribal gaming ordinances regulating the conduct
of Class II and Class III gaming on Indian country to the NIGC for review and approval.
25 U.S.C. § 2710(b)(2); (d)(1)(A)(ii). Any suggestion that the Tribe has “contracted”
away or privatized its ability to regulate gaming to an arbitrator would expressly require
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NIGC approval of the contract at issue as it would fundamentally alter the Tribe’s gaming
law as to that contractual counter-party (and its lender Wells Fargo Bank, N.A.). The
NIGC has not approved any amendment to the Gaming Ordinance. [Exhibit 3, Apache
Gaming Ordinance]. Wells Fargo knew this when it loaned money to the Tribe and to its
customer TGS. [Exhibit 3, Apache Gaming Ordinance]. As the NIGC has not approved
any change in the Apache Gaming Ordinance allowing the Apache Gaming Commission
to delegate its licensing functions, the Business Committee’s resolution of December 27,
2007 executing the Gaming Equipment Lease with KAGD could not effectively change
Apache law.
2. Wells Fargo sought exemption from the Gaming Commission’s licensingrequirements for both its financing to the Tribe and to TGS.
Wells Fargo requested and received exemption from the license requirements of
the Tribe pursuant to an exception within the State Compact for regulated banks to
provide financing. State Compact, Part 10(C)(4). Wells Fargo, in other words, did not
trust that the exemption was automatic but sought an affirmative statement that it was not
required to obtain a license for financing.
I can say with certainty that I won’t be allowed to rely on theConditional Waiver signed by Kevin Kean by itself todisburse funds differently than the Depository Agreement setsout. In order to be effective and compliant with the terms ofthe Depository Agreement and to adequately protect WellsFargo, any waiver or amendment of any provision of theDepository Agreement will need to be executed by all partiesto the Depository Agreement and will need to provide cleardirection (that we understand and are comfortable with) abouthow KAGD portion of funds should be “processed” prior tovalidation of the KAGD license.
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[Exhibit 4, E-Mail String between Rob Medeiros, ScottThompson, and Fellis Gallues].
On January 15, 2009 – six months after KAGD’s license was revoked and two
weeks after TGS began placing gaming machines in the casino pursuant to the KAGD
lease, Rob Medeiros remarked about this requirement: “Wow. This could be a deal
killer.” Id. Neither Wells Fargo, TGS, nor KAGD ever suggested that the issue of
KAGD’s license be submitted to binding arbitration – as such would presumably bring
resolution to KAGD’s “license validation.”
Wells Fargo even went so far as to request that the Apache Gaming Commission
approve the Conditional Waiver previously signed by Kevin Kean. Exhibit 5,
Conditional Waiver § 5. Wells Fargo further requested and received a letter from the
Apache Gaming Commission acknowledging the acceptability of the waiver – which was
found to not violate the Tribe’s licensing requirements and the State Compact which
prohibited the payment of gaming revenues to any unlicensed vendor. Ms. Horse on
behalf of the Apache Gaming Commission wrote:
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[Exhibit 6, AGC Letter 12/10/2008].
The Tribe’s Gaming Commission revoked the license of KAGD, LLC without
KAGD, TGS, or Wells Fargo demanding private arbitration of the dispute.
KAGD, a party to the Depository Agreement and an assignor of the Lease, never
requested arbitration of its licensing suitability. Wells Fargo never demanded for KAGD
arbitration of its licensing suitability. This is despite the fact that KAGD, the original
party to the Gaming Equipment Lease (though incidentally KAGD never performed
under the lease as Wells Fargo never intended for KAGD to perform), could have sought
to attempt to include specific language insulating KAGD or Mr. Kean from any licensing
issues.
If the KAGD Lease’s arbitration provision required any licensing dispute to be
submitted to arbitration then KAGD clearly should have sought such relief. However, the
absurdity of such a situation is obvious. The Apache Gaming Commission, like all tribal
gaming commissions, relies upon the principle of full disclosure by applicants. Mr. Kean
did not fully disclose his various gaming interests and personal history with the Apache
Gaming Commission, nor apparently with numerous tribal gaming commissions. The
Apache Gaming Commission and the National Indian Gaming Commission (in the case
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of a management contractor) can and will deny licenses solely on the basis of failure to
disclose. When a licensee refuses to answer a question or information is obtained from
the NIGC or a sister gaming commission showing false information, the Apache Gaming
Commission is capable of immediate action to compel disclosure. If an arbitrator, rather
than a Gaming Commission, decides whether full disclosure has taken place then the
Gaming Commission loses any ability to compel full disclosure itself. Theoretically,
even a temporary license suspension would be subject to arbitration – and months if not
years of delay over something as basic as disclosure – The regulatory framework of
IGRA and the tribal gaming ordinances will be frustrated as anyone with a contract
containing an arbitration clause (such as Mr. Kean, TGS, and Wells Fargo) will demand
arbitration.
3. IGRA and the State Compact provide exclusive jurisdiction to the tribalgaming commissions to license casino vendors such as TGS.
The Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et. seq. (“IGRA”), provides
for the conduct of gaming by Indian tribes within Indian country. IGRA provides that a
compact may be negotiated between a tribal government and a state to govern the
conduct of “Class III gaming” on Indian lands. See § 2701(d). IGRA further provides
that Class III gaming activity on the Indian lands of the Indian tribe shall be fully subject
to the terms and conditions of the tribal-state compact entered into . . . by the Indian tribe
that is in effect.” 2710(d)(2)(C) (emphasis added).
In accordance with IGRA, the State of Oklahoma put to a vote of the people State
Question 712. State Question 712 proposed a model gaming compact as an offer to
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federally recognized tribes in the State of Oklahoma to engage in Class III gaming on
tribal lands within Indian country under the terms and conditions of the proposed
compact. State Question 712 was approved and adopted by state voters on November 2,
2004. (State Question 712 has been codified at Okla. Stat. tit. 3A, § 280, and the Model
Tribal Gaming Compact is codified at Okla. Stat. tit. 3A, § 281.) As noted at the hearing
on temporary injunction the State Compact provides for licensing of casino vendors in
Part 10. The “TCA” for the Apache Tribe of Oklahoma is the Apache Gaming
Commission. The State Compact does not authorize an Indian tribe conducting class III
gaming in Oklahoma to conduct licensing by private arbitration.
Wells Fargo presents Casino Resource Corp. v. Harrah's Entertainment, Inc. as a
case suggesting that courts should analyze specific claims to determine whether those
claims interfere with a tribe’s internal governance related to gaming. The Eighth Circuit
reiterated its earlier decision in the Dorsey & Whitney decision by quoting from it:
Potentially valid claims under state law are those whichwould not interfere with the nation's governance ofgaming. To the extent a count alleges a violation of a dutyowed to one of the management companies because of anattorney-client relationship or other independent duty, it maybe a valid state law count. Resolution of such claims wouldnot appear to involve attempted discovery of communicationsby the tribe to [the firm] or the merits of the licensingdecision.
Casino Resource Corp. v. Harrah's Entertainment, Inc., 243 F.3d 435, 438 (8th Cir.
2001) (quoting Gaming Corp. of America v. Dorsey & Whitney, 88 F.3d 536, 550 (8th
Cir. 1998)) (emphasis added). Wells Fargo’s claim for injunctive relief (specifically its
claims in this action and in the TGS/Wells Fargo arbitration for injunctive relief to
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prevent a license review hearing) should not be allowed to proceed to the extent such
claims interfere with the Tribe’s rights guaranteed by IGRA. Wells Fargo seeks to
prevent a licensing hearing from occurring at all – which by definition will interfere with
the Tribe’s ability to govern in the gaming field.
The Eleventh Circuit has explicitly held that a non-Indian doing business in Indian
country cannot bring a lawsuit under IGRA challenging a tribal gaming commission’s
failure to grant a casino license. In so holding, the Eleventh Circuit stated:
As an initial matter, we find nothing in IGRA's language thatwould give a management contractor the express right tocompel an Indian tribe to license the employees the contractordesignates to operate the gaming facility. The only expressright of action Congress gave management contractors is theright to seek judicial review in district court, under theAdministrative Procedure Act, of some Commission decisionsthat adversely affect the contractor.
Tamiami Partners, Ltd. By and Through Tamiami Development Corp. v. Miccosukee
Tribe of Indians of Florida, 63 F.3d 1030, 1049 (11th Cir. 1995). The Eleventh Circuit in
Tamiami partners found subject matter jurisdiction to exist under Ex Parte Young, but
found that no private right of action existed in federal court (or anywhere outside of a
tribal forum) to challenge a tribal regulatory agency’s decision to not license (or failure to
act) a management contractor.
4. The Apache Gaming Commission has not acted with malice or disregard forthe rights of TGS and Wells Fargo.
Wells Fargo has stated that the Gaming Commission’s investigation and the
Tribe’s submission of a Petition for License Review is merely an attempt to undue an
arbitration in which the Tribe did not prevail. Or the Gaming Commission’s attempt to
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hold a hearing is an attempt to avoid the second arbitration filed by Wells Fargo and TGS
to seek millions of dollars in additional damages from a relatively impoverished Tribe. Or
a combination of both motives. Those are false and cannot be imputed based upon the
facts.
The e-mail from Fellis Gallues to the Apache Gaming Commission in May 2008 is
both a recognition that Wells Fargo should operate under a license if it owns machines in
the casino and proof that the Gaming Commission was not provided a copy of the actual
Assignment between TGS and Wells Fargo to review at the time of the transactions. This
is the only communication produced by Wells Fargo at any time in which it informed the
Tribe that it will take an assignment of the Gaming Equipment Lease from TGS (after it
was assigned to the Tribe). Ms. Gallues states:
I know you are diligently working on all the licensingrequests related to the transactions with Wells and TGS andKevin. I know you are reviewing the financing license forWells, and as we discussed we would not be applying for avendor license at this time as we will not be participating inthat capacity.
[Exhibit 7, Fellis Gallues E-Mail May 1, 2008]. Ms. Gallues then requests that the AGC
regurgitate certain language to please Wells Fargo’s lawyers, which included an
acknowledgment that if Wells Fargo took control of the slot machines it would do so only
after consultation with the Apache Gaming Commission and potentially obtaining a
license. There is no evidence that Wells Fargo ever received the requested language or
acknowledgment from the Gaming Commission in 2008 or any time subsequent.
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The issues as to TGS are more obvious. TGS and its principal Medeiros recognize
that the participation of Kevin Kean through KAGD required additional work and
disclosure on the part of the Apache Gaming Commission. It is further worthwhile to
note that the Nevada Gaming Control Board also raised concerns to the Apache Gaming
Commission regarding the transfer of title to machines placed in the Tribe’s Silver
Buffalo Casino. [Exhibit 8, Nevada Gaming Control E-Mail to AGC]. The Tribe does
wish to return the gaming machines to Mr. Medeiros’ company, but the Tribe was
prevented from doing so by a directive from the Gaming Commission that it was not to
release machines which may be given to an unlicensed entity or were potential
contraband as being illegal under the State Compact’s standards. The Gaming
Commission, in commencing notification to Wells Fargo and TGS of its issues regarding
the assignment beginning on April 13, 2011 through the letter from former chairman
Gene Flute and continuing with the Tribe’s request to set certain issues for review
through its Petition for License Review filed with the Commission, seek to provide
greater due process than is normally afforded under the Gaming Commission’s own
Policies and Procedures which do not require a hearing --- until a determination that a
violation exists has been made and a fine already imposed. [Exhibit 33 to Amended
Complaint, Apache Gaming Commission Policies]. Wells Fargo has not produced a shred
of evidence (nor can it) that the Gaming Commission reviewed and approved of the
Assignment between TGS and Wells Fargo in June 2008 or anytime thereafter.
Wells Fargo is left with a legal argument, that the Gaming Commission cannot
impose a penalty of any kind because Wells Fargo is exempt under the Compact.
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However, that is a mixed question of fact and law on which reasonable persons may
disagree and which the Gaming Commission has the sole authority to decide. As for a
fine, the Tribe’s Business Committee has passed a statement of tribal law recognizing
that Apache law has recognized disgorgement as an appropriate remedy. But the Gaming
Commission itself, even before the change in government which Wells Fargo so often
decries, had conducted investigations and sought significant fines on previous occasions
of $500 to $1,000 per day per occurrence. Exhibit 9, Notice of Violation 8/24/07]. The
ability to levy fines is not unique to this Gaming Commission or to the present leadership
of the Tribe.
In short, there is no evidence that the Gaming Commission will fail in its duty to
rule upon its own jurisdiction competently and fairly, and there is no evidence that the
Gaming Commission will find that TGS or Wells Fargo violated its licensing rules, much
less that any fine would certainly be imposed by the Gaming Commission.
5. The preliminary injunction is disfavored.
This Preliminary Injunction is disfavored as it affords Wells Fargo all relief it
requests in the event of a trial on the merits. Certain types of injunctions are disfavored:
“(1) preliminary injunctions that alter the status quo; (2) mandatory preliminary
injunctions; and (3) preliminary injunctions that afford the movant all the relief that it
could recover at the conclusion of a full trial on the merits.” QEP Field Services
Company v. Ute Indian Tribe of Uintah and Ouray Reservation, 740 F.Supp.2d 1274,
1281 (D.Utah 2010) (quoting O Centro Espirita Beneficiente Uniao do Vegetal v.
Ashcroft, 389 F.3d 973, 975 (10th Cir. 2004) (en banc)). Wells Fargo seeks to restrain
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the actions of a tribal court, therefore a heightened standard should be applied in relation
to public policy. Union Carbide Agricultural Products Co. v. Costle, 632 F.2d 1014,
1018 (2nd Cir. 1980) (less vigorous fair ground for litigation standard should not be
applied when moving party seeks injunction against government action); Medical Soc. of
State of N. Y. v. Toia, 560 F.2d 535, 538 (2nd Cir. 1977) (where public interest is
adversely affected which cannot be compensated by bond, moving party undertakes a
greater burden of persuasion).
6. Wells Fargo cannot prove the four elements necessary for issuance of apreliminary injunction.
During the temporary restraining order hearing counsel for all parties made
representations. Most striking was the representation by counsel for Wells Fargo, which
can readily be accepted at face value, that it does not intend now or ever to provide
services or financing to the Apache Tribe’s casino. In other words, Wells Fargo does not
suggest that it will lose future revenues or business opportunities in the Apache’s Indian
country as a result of an adverse finding or penalty issued by the Apache Gaming
Commission. What Wells Fargo is suggesting is that in the here and now it may (if the
preliminary injunction does not issue) lose its right to arbitrate a penalty, and that would
constitute irreparable harm. However, without tribal exhaustion having even been
attempted, Wells Fargo cannot say for certain how the Gaming Commission will rule to
its own jurisdiction or even to a Wells Fargo motion to stay pending submission of the
issues in the Petition for License review to arbitration as submitted in the Amended
Statement of Claim by Wells Fargo. There is no certainty as to how the Gaming
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Commission will act, and without such certainty Wells Fargo cannot prove that tribal
exhaustion is futile or that it will be irreparably harmed from allowing a hearing to take
place at which Wells Fargo retains the right to object based upon lack of jurisdiction of
the Gaming Commission, and any other defenses such as a pending arbitration. Wells
Fargo cannot prove irreparable harm.
As to the balancing of harms factor, the Tenth Circuit has repeatedly held that the
invasion of the right of tribal self-government by itself is irreparable harm to the Tribe.
Kiowa Indian Tribe of Oklahoma v. Hoover, 150 F.3d 1163, 1171-72 (10th Cir. 1998).
See also Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234, 1251 (10th Cir.
2001). As noted by the Court’s order, two public policies are competing in this instance,
one in favor of arbitration which is embodied in the Federal Arbitration Act. 9 U.S.C. § 1
et seq., and the other in favor of tribal self-government as embodied by the Congressional
decision to grant tribe’s regulatory jurisdiction over gaming in Indian country.
Public policy of Congress and the federal courts favors tribal exhaustion. Public
policy announced in IGRA favors tribal regulation and does not contemplate private
arbitration of regulatory issues. The analogy is plain. On the day prior to the temporary
restraining order hearing, the U.S. government announced an $85 million dollar fine (the
largest in history) being imposed on Wells Fargo for regulatory violations in its mortgage
business.2 Imagine that the U.S. Bureau of Labor Statistics, a branch of the U.S.
government, has a small petty cash account with Well Fargo and the pro forma account
2 See “Fed Hits Wells Fargo with $85 million fine” found athttp://money.cnn.com/2011/07/20/news/companies/wells_fargo_fined/index.htm last visited August2, 2011
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agreement says that any and all disputes between Wells Fargo and account holder are to
be submitted to arbitration. Wells Fargo would never assert in response to the FDIC’s
fine that it should be submitted to binding arbitration. Regulated entities cannot be
allowed to privative their regulation – such a result renders the public policy favoring
arbitration not only secondary, but potentially dangerous if carried to its logical
conclusion. In this instance, public policy announced by IGRA, the State Compact, and
the Apache Gaming Ordinance, favors the open regulation provided by the administrative
agency of the Apache Gaming Commission and not private and potentially secret
arbitration.
Finally, in issuing the temporary restraining order this Court found fair ground for
litigation and sought to preserve the status quo. Wells Fargo cannot prove a likelihood of
success on the merits because it cannot prove that TGS is not subject to the jurisdiction of
the Apache Gaming Commission. TGS had a license. TGS sought to renew its license.
TGS operated as a vendor in the casino. If TGS operated as a vendor and failed to
disclose its assignment with Wells Fargo, that is fair ground on which the Apache
Gaming Commission may consider. As to Wells Fargo itself, it recognized in the past
and sought the Apache Gaming Commission’s exemptions. Wells Fargo voluntarily does
business in Indian country. Wells Fargo too is more likely than not subject to the
jurisdiction of the Apache Gaming Commission under the State Compact for acting as a
vendor. At the very least, whether the Assignment was a security interest or truly
unconditional so as to require a license as implied in Ms. Gallues’ e-mail, is a fair ground
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for the Gaming Commission to consider. Wells Fargo cannot prove a likelihood of
success on the merits. This Court should allow the Gaming Commission to do its work.
Conclusion
Wells Fargo may not like that the Apache Tribe of Oklahoma is a sovereign
government. But it is. Wells Fargo may not like the separation of powers in the Apache
Constitution or Gaming Ordinance – but the existing arrangement cannot change merely
because of Wells Fargo’s disapproval. Wells Fargo may most dislike the grant of
authority in IGRA and the State Compact to tribal gaming commissions, but those grants
of authority exist. Wells Fargo voluntarily does business in Indian country, and it
voluntarily conducts business with the Apache Tribe of Oklahoma – if it held legal title to
slot machines and proceeds operating in the Tribe’s casino it should have disclosed its
ownership to the Tribe and obtained a license.
This Court should not grant the injunctive relief requested by Wells Fargo and
should dismiss this action.
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Respectfully submitted,
DOERNER, SAUNDERS, DANIEL &ANDERSON, L.L.P.
By: s/Bryan J. NowlinJon E. Brightmire, OBA No. 11623Bryan J. Nowlin, OBA No. 21310Two West Second Street, Suite 700Tulsa, Oklahoma 74103(918) 582-1211 (telephone)(918) 925-5290 (facsimile)[email protected]
Attorneys for Defendants,Louis Maynahonah, Marquita Carattini, andKaren Heminokeky in their official capacities asmembers of the Apache Business Committee
Joined by:
s/Richard J. Grellner*Richard J. Grellner, OBA No. 15521434 NW 18th
Oklahoma City, OK 73103Ph: [email protected]
Attorney for Ronald Ahtone, Austin Klinekole,and Richard Grellner, in their officialcapacities for the Apache Gaming Commission
* Signed by filer with permission
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CERTIFICATE OF SERVICE
The undersigned hereby certifies that on August 3, 2011, I electronicallytransmitted the foregoing document to the Clerk of the Court using the ECF System forfiling and transmittal of a Notice of Electronic Filing to the following ECF registrants:
Jerome Miranowksi [email protected] M. Krauss [email protected] Ryan [email protected] G. Whaley [email protected] Tucker [email protected]. Brian Brandes [email protected]
s/Bryan J. NowlinBryan J. Nowlin
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