(Cite as: 2005 WL 552545 (N.D.Cal.))
United States District Court,
ROUND VALLEY INDIAN TRIBES, Plaintiff,
Gary MCKAY, Cathleen McKay, and Does 1 through 10, Defendants.
No. C 04-02320 JSW.
March 8, 2005.
Maureen H. Geary, Santa Rosa, CA, E. Ann Gilmour, James E. Cohen , Michael S. Pfeffer , Oakland, CA, for Plaintiff.
Peter A. Mankin , Sheldon & Mankin, Walnut Creek, CA, for Claimants.
ORDER GRANTING IN PART AND DENYING IN PART THE TRIBE'S MOTION TO DISMISS THE
WHITE , J.
Now before the Court is the motion of plaintiff Round Valley Tribes (the "Tribes") to dismiss the counterclaims filed by Gary and Kathleen McKay (the "McKays"). Having carefully reviewed the parties' papers and considered their arguments and the relevant legal authority, and good cause appearing, the Court hereby GRANTS IN PART and DENIES IN PART the Tribes' motion to dismiss.
The Tribes brought this action relating to property that the United States holds legal title to in trust for the Tribes. (Complaint, ¶ 1). The Tribes seek declaratory and injunctive relief confirming the existence of a deeded casement, or in the alternative a proscriptive easement, across the McKays' property for the benefit of the Tribes' reservation. (Complaint, ¶ 2). The Tribes further seeks damages for the McKays' alleged interference with its use of the easement over the McKays' property and for damages allegedly caused by the McKays when they expanded an easement the McKays hold over the Tribes' land. (Complaint, ¶¶ 53-55, 57-59).
The McKays then filed a counterclaims against the Tribes seeking: (1) a decree of quiet title to establish ownership of the McKays' property free and clear of any easements claimed by the Tribes; (2) damages for trespass over the McKays' property; and (3) for an injunction against the Tribes and its members enjoining the them from trespassing on the McKays' property. (Counterclaim, ¶¶ 18-27).
I. Legal Standard
Rule 12(b)(6) motions challenge the legal sufficiency of the claims asserted in the complaint. A motion to dismiss should not be granted unless it appears beyond a doubt that a plaintiff can show no set of facts supporting his claim. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) . Under this liberal standard, motions to dismiss are viewed with some disfavor, and are rarely granted. Hall v. City of Santa Barbara, 833 F.2d 1270, 1274 (9th Cir.1986) . The complaint is viewed in a light most favorable to the nonmoving party, and all factual allegations therein are taken as true. Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir.1989) .
II. The McKays' Counterclaims
The Tribes move to dismiss the McKays' counterclaims based on the Tribes' sovereign immunity from suit and based on the McKays' failure to name the United States as a party to its quiet title action. "Because they are sovereign entities, Indian tribes are immune from unconsented suit in state or federal court." McClendon v. United States, 885 F.2d 627, 629 (1989) ( citing Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978) ). While "Indian tribes can waive their sovereign immunity ... such waiver may not be implied, but must be expressed unequivocally." McClendon, 885 F.2d at 629 ( citing Santa Clara Pueblo, 436 U .S. at 58). Thus, absent the Tribes' waiver or consent, the Court may not exercise jurisdiction over the Tribes. Puyallup Tribe, Inc. v. Washington Department of Game, 433 U.S. 165, 172, 97 S.Ct. 2616, 53 L.Ed.2d 667 (1977) .
Contrary to the McKays' argument, the Tribes has not broadly waived its sovereign immunity by initiating this lawsuit. "[A] tribe's participation in litigation does not constitute consent to counterclaims asserted by the defendants in those actions." McClendon, 885 F.2d at 630; see also Chemehuevi Indian Tribe v. Cal. State Bd. of Equalization, 757 F.2d 1047, 1053 (9th Cir.1985) , rev'd in part on other grounds, 474 U.S. 9, 106 S.Ct. 289, 88 L.Ed.2d 9 (1985) . [FN1] However, "[i]nitiation of a lawsuit necessarily establishes consent to the court's adjudication of the merits of that particular controversy." Id. The McClendon court held that by initiating the action, the tribe "accepted the risk that it would be bound by an adverse determination of ownership of the disputed land." Id. The court clarified though, that "the terms of [a sovereign's] consent to be sued in any court define that court's jurisdiction to entertain the suit.... Thus, a tribe's waiver of sovereign immunity may be limited to the issues necessary to decide the action brought by the tribe; the waiver is not necessarily broad enough to encompass related maters, even if those matters arise from the same set of underlying facts." Id. ( citing Jicarilla Apache Tribe v. Hodel, 821 F.2d 537, 539 (10th Cir.1987) (internal citations and quotations omitted).
FN1. United States v. Oregon, 657 F.2d 1009 (9th Cir.1981) , cited to by the McKays, is inapposite. See Chemehuevi, 757 F.2d at 1053 n. 7 ("Entry into a suit may constitute express consent, as it did in United States v. Oregon ..., but only if, when entering into the suit, the Tribe explicitly consents to be bound by the resolution of the dispute ordered by the court.")
Moreover, "a counterclaim may be asserted against a sovereign by way of set off or recoupment to defeat or diminish the sovereign's recovery." United States v. Agnew, 423 F.2d 513, 514 (9th Cir.1970) . However, the McKays may not seek or be awarded any affirmative relief against the Tribes. Id.; see also United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 512, 60 S.Ct. 653, 84 L.Ed. 894 (1940) (vacating judgment against Indian tribe to the extent it exceeded the tribe's claim and fixed a credit against the tribe). The Supreme Court explained that "[t]he desirability for complete settlement of all issues between parties must ... yield to the principle of immunity." Id. Thus, the McKays' counterclaims must be dismissed to they extent they seek a judgment against the Tribes.
At the hearing, the Tribes conceded that the McKays may be allowed to bring counterclaims to the extent such claims are used as a set off or recoupment, and the McKays conceded that they may be allowed to pursue their counterclaim for damages only to the extent that the counterclaim defeats the Tribes' recovery. With these principles in mind, the Court will address what portions of the McKays' counterclaims survive the Tribes' motion to dismiss.
A. Counterclaim for Quiet Title
Presumably, the Tribes waived its sovereign immunity with respect to a determination by the Court regarding the Tribes' and the McKays' respective rights to the McKays' property and whether the Tribes have an easement. See McClendon, 885 F.2d at 630-31; see also Cayuga Indian Nation of New York v. Village of Union Springs, 293 F.Supp.2d 183, 194 (N.D.N.Y.2003) ("It appears, then, that ... claims in recoupment are not limited to claims for monetary damages, and a claim for declaratory relief may, in fact, be deemed a claim for recoupment as long as it arises out of the same subject as the original cause of action and is based on issues asserted in the complaint.)"
Notwithstanding any waiver by the Tribes of its sovereign immunity, the McKays' counterclaim for quiet title fails because the United States is an indispensable party. The United States is a necessary and indispensable party under Federal Rule of Civil Procedure Rule 19 to any proceeding regarding property in which the United States has an interest. See Minnesota v. United States, 305 U.S. 382, 386-87, 59 S.Ct. 292, 83 L.Ed. 235 (1939) ; see also Imperial Granite Co. v. Pala Band of Mission Indians, 940 F.2d 1269, 1272 n. 4 (9th Cir.1991) ("The United States is an indispensable party to any suit brought to establish an interest in Indian trust land.... Inability to join the United States as an indispensable party must result in dismissal ."); Carlson v. Tulalip Tribes of Washington, 510 F.2d 1337, 1339 (9th Cir.1975) . Additionally, "the United States is a necessary party to any action in which the relief sought might interfere with its obligation to project Indian lands against alienation." Carlson, 510 F.2d at 1339 .
Because joinder of the United States is not feasible due to its sovereign immunity, the McKays' counterclaim for quiet title must be dismissed. See Fed.R.Civ.P. 19(b) ; Imperial Granite Co., 940 F.2d at 1272 n. 4; Carlson, 510 F.2d at 1339 . [FN2]
FN2. Although the McKays may not pursue their counterclaim for quiet title without joining the United States, the same is not true for the affirmative claims brought by the Tribes regarding its rights in the property at issue. See Fort Mojave Tribe v. LaFollette, 478 F.2d 1016, 1017 (9th Cir.1973) ("[w]ithout joining the United States, an Indian tribe may sue in its own right to protect its interest in restricted land."). As explained by the Ninth Circuit: "The United States, as the trustee holding legal title to all real property owned by the Tribe, obviously has an interest in this litigation and it will not be bound by any decree ensuing from this litigation unless it is formally joined as a party.... Absent joinder of the United States, a judgment entered in this case in favor of the [defendant] will not necessarily render complete relief to the [defendant] or protect the [defendant] from inconsistent judgments. See Fed.R.Civ.P. 19(a) . Nonetheless, the rule is clear in this Circuit and elsewhere that, in a suit brought by an Indian tribe to protect its interest in tribal lands, regardless of whether the United States is a necessary party under Rule 19(a) , it is not an indispensable party in whose absence litigation cannot proceed under Rule 19(b) ." Puyallup Indian Tribe v. Port of Tacoma, 717 F.2d 1251, 1254 (9th Cir.1983) (citations omitted) (emphasis in original).
B. Counterclaim for Damages
The McKays' assert a counterclaim for damages against the Tribes based on alleged trespassing on the McKays' property. The McKays' counterclaim against the Tribes may proceed only to the extent it is used to offset any recovery by the Tribes, and is dismissed to the extent the McKays' seek affirmative relief against the Tribes. Agnew, 423 F.2d at 514 . Thus, any eventual recovery by the McKays on this counterclaim will be limited by the amount the Tribes is awarded on its claims, if any.
C. Counterclaim for Injunction
The Court finds that the McKays' counterclaim against the Tribes to enjoin the alleged "continued trespasses" by the Tribes is seeking affirmative relief against the Tribes. At the hearing, the McKays argued that as a practical matter, they would need a mechanism to enforce the Court's judgment and thus, should be allowed to proceed against the Tribes on this counterclaim. However, the Tribes' sovereign immunity may not be eroded by practical considerations. See Squaxin Island Tribe v. Washington, 781 F.3d 715, 723 (9th Cir.1986) (practical difficulties cannot override an Indian tribe's claim of sovereign immunity). Accordingly, the McKays' counterclaim for an injunction is dismissed.
For the foregoing reasons, the Tribes' motion to dismiss the McKays' counterclaims is GRANTED except to the extent that the McKays' counterclaim for damages is used to offset the Tribes' recovery, if any.
IT IS SO ORDERED.