NO. 13-4172 UNITED STATES COURT OF APPEALS FOR … · NO. 13-4172 UNITED STATES COURT OF APPEALS...

NO. 13-4172 UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

LYNN D. BECKER,

Plaintiff/Appellant,

v.

UTE INDIAN TRIBE OF THE UINTAH and OURAY RESERVATION, a federally

chartered corporation; UTE INDIAN TRIBE

OF THE UINTAH AND OURAY RESERVATION, a federally recognized Indian tribe; the UINTAH AND OURAY TRIBAL BUSINESS COMMITTEE, and UTE ENERGY HOLDINGS, LLC, a Delaware LLC,

Respondents/Appellees.

On Appeal from the United States District Court of Utah Honorable Dee Benson Civil No. 2:13-cv-00123

JOINT CONSOLIDATED BRIEF OF APPELLEES

Thomasina Real Bird FREDERICKS PEEBLES & MORGAN LLP 1900 Plaza Drive Louisville, CO 80027-2314 Telephone: (303) 673-9600 Attorney for Respondents/Appellees

Oral Argument is Requested.

Appellate Case: 13-4172 Document: 01019236214 Date Filed: 04/17/2014 Page: 1

ii

TABLE OF CONTENTS

FED. R. APP. P. RULE 26.1. CORPORATE DISCLOSURE STATEMENT ......... 1

PRIOR OR RELATED APPEALS ............................................................................ 1

STATEMENT OF JURISDICTION.......................................................................... 3

STATEMENT OF ISSUES PRESENTED FOR REVIEW ...................................... 1

STATEMENT OF THE CASE .................................................................................. 2

SUMMARY OF THE ARGUMENT ........................................................................ 6

STANDARD OF REVIEW …………………………………………………….….6

ARGUMENT……………………………………………………………………….6

I. THERE IS NO FEDERAL QUESTION JURISDICTION UNDER THE WELL-PLEADED COMPLAINT RULE…………………………………..8

II. THE “SUBSTANTIAL QUESTION OF FEDERAL LAW” STANDARD IS NOT PRESENT……………………………………….…10

CONCLUSION…………………………………………………………………..18


iii

TABLE OF AUTHORITIES

Cases

Amoco Oil Co. v. United States, 234 F.3d 1374 (Fed. Cir. 2000) .............................................................................. 7

Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792 (Fed. Cir. 1990) ................................................................................ 7

Broughton Lumber Co. v. Yeutter, 939 F.2d 1547 (Fed. Cir. 1991) .............................................................................. 7

Carbino v. West, 168 F.3d 32 (Fed. Cir. 1999) .................................................................................. 7

Caterpillar Inc. v. Williams, 482 U.S. 386, (1987) ............................................................................................... 8

Consolidation Coal Co. v. United States, 351 F.3d 1374 (Fed. Cir. 2003) .............................................................................. 6

Dutcher v. Matheson, 733 F.3d 980 (10th Cir. 2013) ............................................................................3, 9

Duty Free Int'l, Inc. v. United States, 88 F.3d 1046 (Fed. Cir. 1996) ................................................................................ 7

Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677 (2006) ................................................................................. 12, 15, 17

Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Trust for S. California, 463 U.S. 1, 103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983) ......................................... 17

Gilda Indus., Inc. v. United States, 446 F.3d 1271 (Fed. Cir. 2006) .............................................................................. 7

Gilmore v. Weatherford, 694 F.3d 1160 (10th Cir. 2012) ..................................................................... 13, 17

Grable & Sons Metal Prod. v. Darue Eng. & Mfg., 545 U.S. 308 (2005) ........................................................................... 10, 11, 15, 18


iv

Gunn v. Minton, 133 S. Ct. 1059, 185 L. Ed. 2d 72 (2013) ................................................ 13, 14, 15

Hannon v. Dep't of Justice, 234 F.3d 674 (Fed. Cir. 2000) ................................................................................ 7

Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826 (2002) ............................................................................................3, 9

Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994) ............................................................................................4, 5

Louisville & N.R. Co. v. Mottley, 211 U.S. 149, 29 S. Ct. 42, 53 L. Ed. 126 (1908) ........................................ 8, 9, 18

Marcus v. Kansas Dep't of Revenue, 170 F.3d 1305 (10th Cir. 1999) .............................................................................. 6

Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, (1986) ............................................................................................... 8

Municipality of Mayaguez v. Corporacion Para el Desarrollo del Oeste, Inc., 726 F.3d 8 (1st Cir. 2013) .............................................................................. 14, 15

Niagara Mohawk Power Corp. v. Tonawanda Band of Seneca Indians, 94 F.3d 747 (2d Cir. 1996) ..................................................................................... 3

Novosteel SA v. U.S., Bethlehem Steel Corp., 284 F.3d 1261 (Fed. Cir. 2002) .............................................................................. 7

S.E.C. v. Blazon Corp., 609 F.2d 960 (9th Cir. 1979) .................................................................................. 3

Sanderlin v. Seminole Tribe of Florida, 243 F.3d 1282 (11th Cir. 2001) .............................................................................. 5

Smith v. Kansas City Title & Trust Co., 255 U.S. 180 (1921) ................................................................................. 11, 15, 17

Stock W., Inc. v. Confederated Tribes of the Colville Reservation, 873 F.2d 1221 (9th Cir. 1989) ................................................................................ 4

Tenneco Oil Co. v. Sac & Fox Tribe of Indians of Oklahoma, 725 F.2d 572 (10th Cir. 1984) .............................................................................. 17

United States v. Ford Motor Co., 463 F.3d 1267 (Fed. Cir. 2006) .............................................................................. 7

Wagner v. Dir., Fed. Emergency Mgmt. Agency, 847 F.2d 515 (9th Cir. 1988) .................................................................................. 5


v

Weeks Const., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668 (8th Cir. 1986) .................................................................................. 3

Statutes

28 U.S.C. § 1331 (West) ................................................................................. 6, 8, 18

Rules

FED. R. APP. P. RULE 26.1 ..................................................................................... 1

Other Authorities

Federal Practice and Procedure, 2d § 3562, at 36 (1984) .......................................... 4

Toole v. Ute Water Settlement Accounting Services, LLC, Case No.

CV-09-061, p. 7 (Ute Indian Tribal Court 2010)…………………………………..4

Law and Order Code § 1-8-5………………………………………………….....4, 5

Abbreviations

Law and Order Code of the Ute Indian Tribe of the Uintah and Ouray Reservation (“Law and Order Code” or “ULOC”) …………………………………………..4, 5


1

Appellees Ute Indian Tribe of the Uintah and Ouray Reservation, a

federally-chartered corporation (“the Section 17 Corporation”); Ute Indian Tribe of

the Uintah and Ouray Reservation, a federally recognized Indian tribe (the

“Tribe”); the Uintah and Ouray Tribal Business Committee (the “Business

Committee”); and Ute Energy Holdings, LLC, a Delaware LLC (the “Ute

Holdings”) (together, the “Tribal Parties”) by and through Fredericks Peebles &

Morgan LLP (Thomasina Real Bird), in support of the Joint Consolidated Brief of

Appellees state:

FED. R. APP. P. RULE 26.1. CORPORATE DISCLOSURE STATEMENT

There is no such corporation.

PRIOR OR RELATED APPEALS

There are no prior related appeals.

STATEMENT OF JURISDICTION

Appellees are not dissatisfied with the appellant’s statement of jurisdiction.

STATEMENT OF ISSUES PRESENTED FOR REVIEW

1. Did the district court correctly conclude, based on the “well-pleaded

complaint” rule, that Becker’s breach of contract claim is not created by federal


2

law, but only “peripherally implicate[]” federal laws and there is no federal-

question jurisdiction based solely on possible federal defenses.

2. Did the district court correctly conclude, based on the “substantial question

of Federal law” standard, that Becker’s breach of contract claim does not fall

within the “slim”, “special and small category” of cases because Becker’s claims

do not contain a “right or immunity created by the Constitution or laws of the

United States”.

STATEMENT OF THE CASE

Becker filed suit against the Tribal Parties and sought damages for breach of

contract based on the Independent Contractor Agreement (“Contract”), Aplt.App.,

86-98, between Becker and the Tribe that began in March, 2004, and continued

until 2007, when the Tribe terminated Becker’s agreement.

The Section 17 Corporation, the Business Committee, and Ute Holdings

Appellees are not parties to the Contract. The Contract engaged Becker’s services

as an independent contractor to implement restructuring of the Tribe’s Energy and

Minerals Department. Contract, Aplt.App. 86. The Contract did not waive the

Tribe’s sovereign immunity.

The Tribe and Becker agreed “that all disputes arising under or relating to

the [Contract] shall be resolved in the United States District Court for the District

of Utah.” Contract, Aplt.App. 93. The district court nevertheless lacked subject


3

matter jurisdiction. Parties cannot invoke federal court jurisdiction by contract.

S.E.C. v. Blazon Corp., 609 F.2d 960, 965 (9th Cir. 1979)(“[a] defendant cannot

waive his right to assert a lack of subject matter jurisdiction”). Thus, regardless of

whether the parties contracted for this forum, Article III still requires subject

matter jurisdiction.

Becker’s breach of contract claim does not raise a federal question; it makes

state law claims and points to possible federal defenses. It is well-settled that

federal jurisdiction cannot lie based on alleged possible defenses. Holmes Group,

Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 830-31 (2002); Dutcher v.

Matheson, 733 F.3d 980 (10th Cir. 2013).

Becker asserts federal question jurisdiction by arguing agency approval was

required under 25 U.S.C. § 81 and 25 U.S.C. § 2013. First Amended Complaint

and Jury Demand (“Amended Complaint”) [Doc. 3], Aplt.App., 11. Abundant

authority provides contract disputes do not raise federal questions even if a

contract in question requires the approval of a federal agency. Niagara Mohawk

Power Corp. v. Tonawanda Band of Seneca Indians, 94 F.3d 747, 753 (2d Cir.

1996); see also Weeks Const., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 672

(8th Cir. 1986). “[A] suit on an agreement between private parties does not raise a

federal question merely because the agreement was authorized by federal law or


4

some federal agency has approved the agreement”. Wright and Miller, Federal

Practice and Procedure, 2d § 3562, at 36 (1984).

To effectuate a waiver of sovereign immunity, the Law and Order Code of

the Ute Indian Tribe of the Uintah and Ouray Reservation (“ULOC”), § 1-8-5

provides:

[e]xcept as required by federal law, or the Constitution and bylaws of Ute Indian Tribe, or as specifically waived by a resolution or ordinance of the Business Committee specifically referring to such, the Ute Indian Tribe shall be immune from suit in any civil action, and its officers and employees immune from suit for any liability arising from the performance of their official duties.

Toole v. Ute Water Settlement Accounting Services, LLC, Case No. CV-09-061, p.

7 (Ute Indian Tribal Court 2010), Aplee.App., 8 citing ULOC § 1-8-5, Aplee.App.,

13.

The purported waiver in the Contract was not separately authorized by the

Tribe’s Business Committee as required under the above-cited tribal statute. No

resolution or meeting minutes show approval of the waiver provision specifically.

Becker fails to allege or otherwise demonstrate a waiver of sovereign immunity.

Therefore, Becker failed to meet his burden of showing a valid waiver of tribal

sovereign immunity. See, e.g., Kokkonen v. Guardian Life Ins. Co. of America,

511 U.S. 375 (1994); Stock W., Inc. v. Confederated Tribes of the Colville

Reservation, 873 F.2d 1221, 1225 (9th Cir. 1989).


5

Further, conditions precedent to a waiver of immunity must be complied

with to be effective. See Sanderlin v. Seminole Tribe of Florida, 243 F.3d 1282,

1288 (11th Cir. 2001)(sovereign immunity can only be waived in compliance with

tribal law); Wagner v. Dir., Fed. Emergency Mgmt. Agency, 847 F.2d 515, 518

(9th Cir. 1988).

The limited waiver of sovereign immunity found in the Contract contained a

condition precedent:

The Tribe’s limited waiver of sovereign immunity shall be further evidenced by a Tribal Resolution delivered at the time of execution of this Agreement in accordance with Tribal Laws, that expressly authorizes the foregoing submission to jurisdiction of the courts so designated and the execution of this agreement.

Aplt. App., 94 (emphasis added). The reasons are two-fold: First, it ensures, and

indeed mandates, adherence to the Ute Indian Tribe’s tribal law which requires an

ordinance or resolution of the Tribe’s Business Committee to waive sovereign

immunity. ULOC § 1-8-5, Aplee.App., 13. Secondly, the condition precedent

operates to ensure against an inadvertent waiver of sovereign immunity through the

simple act of approving a contract. Thus, Becker failed to meet his burden of

proving an express, unequivocal waiver of sovereign immunity. See Kokkonen,

511 U.S. 375.

The district court did not reach the sovereign immunity issue. It determined

that it lacked jurisdiction and dismissed the complaint on subject-matter


6

jurisdiction grounds. Memorandum Decision and Order (“Decision”)[Doc. 32],

Aplt. App., 153.

SUMMARY OF THE ARGUMENT

There is no federal question jurisdiction under 28 U.S.C. § 1331.

Under the “well-pleaded complaint” rule, Becker’s breach of contract claim

is not created by federal law, but only “peripherally implicate[s]” federal laws.

Additionally there is no federal-question jurisdiction based solely on possible

federal defenses.

The district court correctly concluded, based on the “substantial question of

Federal law” standard, that Becker’s breach of contract claim does not fall within

that “slim”, “special and small category” of cases because it did not contain a

“right or immunity created by the Constitution or laws of the United States”.

STANDARD OF REVIEW

A review of the district court's dismissal for lack of subject matter

jurisdiction is de novo. Marcus v. Kansas Dep't of Revenue, 170 F.3d 1305, 1309

(10th Cir. 1999).

ARGUMENT

Before addressing the merits of any case, it is a threshold matter that federal

courts must satisfy themselves that the requirements of Article III of the

Constitution are met. Consolidation Coal Co. v. United States, 351 F.3d 1374,


7

1378 (Fed. Cir. 2003) (citing Broughton Lumber Co. v. Yeutter, 939 F.2d 1547,

1555 (Fed. Cir. 1991)). The district court was unable to satisfy itself that the

requirements of Article III were met, based on the ‘well-pleaded complaint’

rule. Curiously, Becker did not address the well-pleaded complaint rule which was

a predicate issue of law, essential to the analysis, ultimately dispositive of, or

necessary to the resolution of the issue directly before it on appeal. It was not

raised in his opening brief, much less sufficiently briefed, and as such, arguments

that the district court’s dismissal was somehow improper based on the “well-

pleaded complaint” rule are waived. See Novosteel SA v. U.S., Bethlehem Steel

Corp., 284 F.3d 1261, 1273-74 (Fed. Cir. 2002); Hannon v. Dep't of Justice, 234

F.3d 674, 680 (Fed. Cir. 2000)(citing Becton Dickinson & Co. v. C.R. Bard, Inc.,

922 F.2d 792, 800 (Fed. Cir. 1990)); Amoco Oil Co. v. United States, 234 F.3d

1374, 1377 (Fed. Cir. 2000) (citing Carbino v. West, 168 F.3d 32, 34-35 (Fed. Cir.

1999)); United States v. Ford Motor Co., 463 F.3d 1267, 1276-77 (Fed. Cir.

2006)(citing Novosteel SA, 284 F.3d at 1274); Gilda Indus., Inc. v. United States,

446 F.3d 1271, 1280 (Fed. Cir. 2006) (citing Duty Free Int’l, Inc. v. United States,

88 F.3d 1046, 1048 (Fed. Cir. 1996)).


8

I. THERE IS NO FEDERAL QUESTION JURISDICTION UNDER THE WELL-PLEADED COMPLAINT RULE

The first issue is whether there is federal question jurisdiction under the

well-pleaded complaint rule for Becker’s state law breach of contract claim.

In the absence of diversity of citizenship, a complaint must meet federal-

question jurisdiction requirements as set forth in 28 U.S.C. § 1331 that provides for

federal jurisdiction over all civil actions “arising under the Constitution, laws, or

treaties of the United States.” 28 U.S.C. § 1331.

Whether an action "arises under" federal law and creates a federal question

jurisdiction over a case removed from state to federal court, or one originally filed

in such court, ordinarily "must be determined by reference to the 'well-pleaded

complaint.' Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 808

(1986) (citation omitted). A case may not be removed to federal court on the basis

of a federal defense . . . even if the defense is anticipated in the plaintiff's

complaint[.] Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987).

"A defense that raises a federal question is inadequate to confer

federal jurisdiction." Merrell Dow Pharm. Inc., 478 U.S. at 808 (citation omitted).

Under the well-pleaded complaint rule, a suit "arises under" federal law

for 28 U.S.C. § 1331 purposes "only when the plaintiff's statement of his own


9

cause of action shows that it is based upon [federal law]." Louisville & N.R. Co.

v. Mottley, 211 U.S. 149, 152 (1908).

The possibility of a federal defense that involves a federal issue is irrelevant.

Holmes Grp., Inc., 535 U.S. at 830. It must be plaintiff’s statement of his cause

of action that presents the suit as one arising under the Constitution or laws of the

United States. Louisville & N.R. Co., 211 U.S. at 152. When determining

whether a claim arises under federal law, within meaning of statute providing for

federal question jurisdiction, courts examine the well-pleaded allegations of the

complaint and ignores potential defenses. Dutcher, 733 F.3d, 985. The Court

remains faithful to the well-pleaded complaint rule. Holmes Grp., Inc., 535 U.S. at

830.

The district court concluded that “despite Becker’s reference to peripheral

federal issues, it is not apparent from the face of the complaint that federal law

creates Becker’s causes of action and the requirement of the ‘well-pleaded

complaint’ rule is therefore not met.” Decision [Doc. 32], Aplt.App., 151. Becker

did not plead a cause of action under federal law. Instead, Becker anticipated the

defenses that Appellees could raise in response to his state law breach of contract

claim and mistakenly asserts those defenses constitute subject matter jurisdiction.

The Supreme Court is clear that federal jurisdiction cannot lie based on

alleged possible defenses. Becker did not address the district court’s holding with


10

respect to the well-pleaded complaint rule on appeal. Becker failed to meet his

burden as to whether his complaint meets the well-pleaded complaint rule, did not

provide any evidence to the district court to support a finding of subject-matter

jurisdiction because there is no federal jurisdiction for state law breach of contract

claim or for an accounting claim, and failed to address the well-pleaded complaint

rule on appeal.

The district court correctly concluded, based on the “well-pleaded

complaint” rule, Becker’s causes of action are not created by federal law, but are

state law claims that “peripherally implicate[]” federal laws and no federal-

question jurisdiction was present based solely on possible federal defenses.

Decision [Doc. 32], Aplt. App., 150-151.

II. THE “SUBSTANTIAL QUESTION OF FEDERAL LAW” STANDARD IS NOT PRESENT

The next issue is whether Becker’s state law breach of contract claim

contains a substantial question of federal law so as to constitute subject matter

jurisdiction.

In Grable & Sons Metal Prod. v. Darue Eng. & Mfg., 545 U.S. 308, 315

(2005), a case heavily relied on by Becker, the Court used language supporting

jurisdiction when federal law is “an essential element” of the claim. “It has become

a constant refrain in such cases that federal jurisdiction demands not only a


11

contested federal issue, but a substantial one, indicating a serious federal interest in

claiming the advantages thought to be inherent in a federal forum. Grable & Sons

Metal Products, Inc., 545 U.S. at 313. In Grable & Sons Metal Products, Inc., 545

U.S. 308, the Court considered whether removal was proper when a former

landowner brought a quiet title action in state court against the tax sale purchaser

and alleged the Internal Revenue Service (“IRS”) provided inadequate notice of the

sale. The district court in Grable & Sons Metal Products, Inc., 545 U.S. 308

removed the case after finding that the “claim does pose a significant question of

federal law.” Grable & Sons Metal Products, Inc., 545 U.S. at 311(internal

quotations omitted). The Grable Court analyzed a prior case that set forth the

substantial question doctrine, Smith v. Kansas City Title & Trust Co., 255 U.S. 180

(1921), and recalled that in Smith, 255 U.S. 180, “the Court recognized federal-

question jurisdiction because the principle issue in the case was the federal

constitutionality of the bond issue.” Grable & Sons Metal Products, Inc., 545 U.S.

at 312(emphasis added). Grable and Smith, therefore, require that the federal issue

be “substantial”, “essential”, and “principle” before the requirements of federal-

question jurisdiction are met.

In this case, unlike Grable, Becker does not set forth a substantial question

of federal law, because the possibility that federal law would come into play is

entirely dependent on whether it is raised by the responding parties. Unlike Smith,


12

Becker’s contract claim does not contain a “principle issue” of federal law. As

stated by the district court, “Becker lists a number of potential federal issues that

he claims warrant federal-question jurisdiction… these assertions are simply ways

the federal laws are peripherally implicated[.]” Decision, Aplt. App., 150.

The cases the Court meant to allow into Federal court under Grable and

Smith are rare. In Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677,

701 (2006), the Court summarized the “slim category” of Grable: “Grable

emphasized that it takes more than a federal element ‘to open the ‘arising under’

door.’” Empire involved an action for reimbursement of insurance benefits that has

been paid by a health insurance carrier to a former enrollee. The Court held that

federal question jurisdiction was lacking. Empire Healthchoice Assur., Inc., 547

U.S. at 701. In distinguishing the case from Grable, the Court stated:

[Empire] is poles apart from Grable … [because] [h]ere, the reimbursement claim was triggered, not by the action of any federal department, agency, or service, but by the settlement of a personal-injury action launched in state court… and the bottom-line practical issue is the share of that settlement property payable to Empire.

Id. at 700.

Becker’s contract claim does not fit within the “ slim category” of Grable in

the same manner the insurance carrier’s claim did not fit in Empire. Here,

Becker’s contract claim is not triggered by any federal department, agency, or


13

service; it was triggered by an alleged breach of contract and whether he is entitled

to recover under a contract theory.

Becker also points to Gilmore v. Weatherford, 694 F.3d 1160, 1170-71 (10th

Cir. 2012), as support for its position. Brief of Appellant, 16. In Gilmore, 694 F.3d

1160, the plaintiffs claim that the private defendant’s removal of mine tailings

violated plaintiffs’ property rights because the required approval by the Secretary

of the Interior was not obtained. It was the plaintiffs’ claim in Gilmore, 694 F.3d

1160, that contained the federal law issue, and plaintiffs needed the federal law

issue to prevail on its claim. Here, Becker’s contract claim does not point to an

absence of federal action as the reason it will prevail on its contract claim. Instead,

Becker anticipates that the Appellees would raise the missing federal action, a step

Appellees did not take in the district court. Thus, Gilmore, 694 F.3d 1160,

presenting the reverse situation, is distinguishable from the instant case and does

not support Becker’s contention here.

Next Becker asserts Gunn v. Minton, 133 S. Ct. 1059, 185 L. Ed. 2d 72

(2013), provides a basis for federal question jurisdiction. Brief of Appellant, 16.

In Gunn, 133 S. Ct. 1059, the plaintiff sued his former attorney for legal

malpractice for failing to timely raise an argument to the district court in plaintiff’s

patent case. The Court organized the inquiry into whether federal jurisdiction is

present over a state law cause of action if the face of the complaint reveals a


14

“federal issue [that] is: (1) necessarily raised, (2) actually disputed, (3) substantial,

and (4) capable of resolution in federal court without disrupting the federal-state

balance approved by Congress.” Gunn, 133 S. Ct. at 1065. According to Becker,

the federal issues in this case is “whether any defendant is protected by tribal

sovereign immunity and, if so, whether any such defendant property waived tribal

sovereign immunity…[and] whether Becker’s Agreement with the Tribe required

approval by the Secretary of the Interior.” Brief of Appellant, 18, 21. The Court

has emphasized that the "substantiality" inquiry is wholly separate from the

"necessary" inquiry, and demands that a federal question must not only be

important to the parties, but important to the federal system. Municipality of

Mayaguez v. Corporacion Para el Desarrollo del Oeste, Inc., 726 F.3d 8, 13 (1st

Cir. 2013). The Mayagüez court referenced the ruling in Gunn, 133 S. Ct. 1059

explaining that for a case to be "substantial in the relevant sense,"

it is not enough that the federal issue be significant to the particular parties in the immediate suit; that will always be true when the state claim 'necessarily raises' a disputed federal issue . . . . The substantiality inquiry . . . looks instead to the importance of the issue to the federal system as a whole.

Municipality of Mayaguez, 726 F.3d at 14 (quoting Gunn, 133 S. Ct. 1059, at

1066). In order for an issue to be substantial, the outcome of the claim could turn

on a new interpretation of a federal statute or regulation which will govern a large


15

number of cases. “A case is more likely to be important to the federal system as a

whole if it presents a nearly pure issue of law . . . that could be settled once and for

all rather than an issue that is fact-bound and situation-specific and whose holding

will more likely be limited to the facts of the case.” Municipality of Mayaguez,

726 F.3d at 13-14(quoting Empire Healthchoice Assur., Inc., 547 U.S. at 700-701)

(internal quotations omitted); see also Gunn, 133 S. Ct. at 1067 (noting that the

federal issue in dispute was not important because its resolution was unlikely to

have any impact on other patent cases).

“Second, a federal issue may also be substantial where the resolution of the

issue has ‘broader significance . . . for the Federal Government.” Id., (quoting

Gunn, 133 S. Ct. at 1066). "The Government has a direct interest in the availability

of a federal forum to vindicate its own administrative action." Grable & Sons

Metal Products, Inc., 545 U.S. at 315. The Court has repeatedly suggested that a

federal issue is more likely to be substantial where a claim between two private

parties, though based in state law, directly challenges the propriety of an action

taken by "a federal department, agency, or service." Empire Healthchoice Assur.,

Inc., 547 U.S. at 700 (discussing Grable & Sons Metal Products, Inc., 545 U.S. at

313); see also Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 41 S. Ct.

243, 65 L. Ed. 577 (1921) (holding that a shareholder suit seeking to enjoin a

private company from investing in certain federal bonds on the grounds that the


16

statute authorizing the issuance of those bonds was unconstitutional presented

substantial federal issue).

Becker’s state law breach of contract claim and sovereign immunity defense

are not substantial under Empire and Gunn because they are situation-specific and

unlikely to affect a large number of parties. The Contract language is specific and

requires an interpretation of specific tribal legal authorities. A sovereign immunity

defense would turn on an interpretation of the particular Contract language, the

particular tribal resolution, and the particular language contained in the Tribe’s

statutes. The unique facts of the contract formation, the contract performance, and

the contract claim are uniquely specific to Becker’s particular claim, not to other

contract disputes.

Becker’s contract claims and the sovereign immunity defense are also not

substantial under Gunn, Grable, Empire, and Smith because they do not involve the

vindication of a federal government action or challenge a federal government

action. At most, a possible, although not asserted, district court defense includes

whether or not federal government action was required, not whether or not the

federal government acted properly. Becker’s contract claims do not contain a

substantial federal element and therefore fail to amount to federal-question

jurisdiction.


17

The district court concluded that Becker’s state law claims “are simply state-

law claims that do not include, as an essential element, any right or immunity

created by federal law” and therefore do not qualify for federal-question

jurisdiction. Decision, Aplt.Appx., 151. The district court reasoned “this branch

of arising-under jurisdiction is a slim one” and “the Supreme Court has called it a

‘special and small category.’” Id. (quoting Gilmore, 694 F.3d at 1172 and Empire

Healthchoice Assur., Inc., 547 U.S. at 699). “This language has been interpreted to

mean that at least part of the state-law claim must have, as an element, a federally

created right or cause of action: ‘[A] right or immunity created by the Constitution

or laws of the United States must be an element, and an essential one, of the

plaintiff’s cause of action.’” Decision, Aplt.App., 151 (quoting Franchise Tax Bd.

of State of Cal. v. Constr. Laborers Vacation Trust for S. California, 463 U.S. 1,

11, 103 S. Ct. 2841, 77 L. Ed. 2d 420 (1983)).

The district court found Tenneco Oil Co. v. Sac & Fox Tribe of Indians of

Oklahoma, 725 F.2d 572 (10th Cir. 1984), a case Becker raised only at oral

argument, inapplicable “because the claims [in Tenneco Oil Co., 725 F.2d 572]

were appreciably different than the state-law claims [Becker made].” Decision,

Aplt.App., 152. The district court reasoned Tenneco involved the validity of the

exercise of tribal power when it had enacted several ordinances and whether the


18

exercise of that tribal power trespassed upon the overriding interests of the

National Government. Id. (quoting Tenneco Oil Co., 725 F.2d at 575).

The district court correctly concluded that the “substantial question of

federal law” standard is not present and correctly rejected Becker’s last-ditch

attempts to rely on Tenneco.

CONCLUSION

Nothing in Grable & Sons Metal Products, Inc., 545 U.S. 308 serves to

modify or create an exception to the well-pleaded complaint rule. Grable & Sons

Metal Products, Inc., 545 U.S. 308. After Grable, there are still two requirements

for federal question jurisdiction: the case must arise under the Constitution or the

laws of the United States, and the federal question must be well-pled in the

plaintiff’s complaint. 28 U.S.C. § 1331; Louisville & N.R. Co., 211 U.S., 152.

Becker did not meet his burden at the district court level of establishing

federal jurisdiction under 28 U.S.C. § 1331. For the reasons set forth by the

district court and the arguments above, Appellees respectfully request that this

Court affirm the district court’s dismissal.

ORAL ARGUMENT

Oral argument is requested to address the interplay between the well-pleaded

complaint rule and the substantial question of federal law standard.


19

Respectfully submitted this 17th day of April, 2014.

FREDERICKS PEEBLES & MORGAN LLP /s/ Thomasina Real Bird

1900 Plaza Drive Louisville, Colorado 80027 Telephone: (303) 673-9600 Attorney for Respondents/Appellees


20

CERTIFICATE OF COMPLIANCE

Section 1. Word count As required by Fed. R. App. P. 32(a)(7)(c), I certify that this brief is proportionally spaced and contains 5 0 4 4 words. Complete one of the following:

1. I relied on my word processor to obtain the count and it is Microsoft Word 2013:

2. I counted five characters per word, counting all characters including citations and numerals.

I certify that the information on this form is true and correct to the best of my knowledge and belief formed after a reasonably inquiry.

By: /S/ THOMASINA REAL BIRD (Digital)


21

CERTIFICATE OF DIGITAL SUBMISSION AND PRIVACY REDACTIONS

I hereby certify that a copy of the foregoing JOINT CONSOLIDATED

BRIEF OF APPELLEES as submitted in Digital Form via the court’s ECF system, is an exact copy of the written document filed with the Clerk and has been scanned for viruses with the VIPRE Business Edition version 6.2.5530.0, Virus Definitions 28342 and, according to the program, is free of viruses. In addition, I certify all required privacy redactions have been made.

By: /S/ J. Wagner (Digital)

Legal Secretary


22

CERTIFICATE OF SERVICE

I hereby certify that the foregoing JOINT CONSOLIDATED BRIEF OF APPELLEES was served on this 17th day of April, 2014 via the Court’s CM/ECF system which will send notification of such filing to all parties of record below:

David K. Isom Isom Law Firm, PLLC 299 S. Main Street, Ste. 1300 Salt Lake City, UT 84111 Attorney for Plaintiff/Appellant Lynn D. Becker I additionally certify that on the 18th day of April, 2014 the original and

seven (7) copies of the foregoing JOINT CONSOLIDATED BRIEF OF APPELLEES will be delivered to the Clerk of the Court, U.S. Tenth Circuit Court of Appeals via personal delivery (Denver-Boulder Couriers).

/S/ J. Wagner (Digital)

Legal Secretary


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