People Against a Casino Town

The following document was filed on September 3, 2004.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

PLAINTIFFS'  REPLY TO ALL DEFENDANTS' RESPONSES
TO MOTION TO REMAND TO OREGON CIRCUIT COURT

Case No.  CV-06175-AA

I. INTRODUCTION

Defendants’ attempt to explain why removal is appropriate fails to address key legal principles that require remand in situations such as this.   IGRA cannot provide a basis for federal jurisdiction because it provides no private right of action.  The Voluntary-Involuntary rule cited by Defendants is inapplicable in this case.  Nothing Plaintiffs have done dilutes or changes that this is an action against the State of Oregon seeking a declaration as to Oregon constitutional law.  Finally, even if federal question jurisdiction were present, this Court should abstain from exercising its jurisdiction.

II.    ARGUMENT

A.    IGRA cannot form the basis for federal question jurisdiction because it does not provide a private right of action. 

Defendants’ argument that IGRA provides the source of federal jurisdiction in this case is without legal foundation.  In Merrell Dow, Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 808, 106 S.Ct.  3229, 92 L.Ed. 2d 650 (1986), plaintiffs alleged that defendants’ violations of federal Food and Drug Administration regulations created federal question jurisdiction over the state law negligence claims.  The Supreme Court held that though resolution of the plaintiff’s dispute might depend on the interpretation of federal regulations, the claim did not “arise under” federal law because the FDA regulations did not create a private right of action.   Id. at 817.   The Ninth Circuit expanded on this discussion in Utley v. Varian Assoc., Inc. 811 F. 2d 1279, 1283 (9th Cir. 1988):

“[u]nder Merrell Dow, if a federal law does not provide a private right of action, the  state law action based on its violation perforce does not raise a ‘substantial’ federal question sufficient to confer federal question jurisdiction.” 

Other Ninth Circuit cases agree.  See also, Millers Nat’l Ins. Co. v. Axel’s Express, Inc. 851 F.2d 267, 270 (9th Cir. 1988) (“because [plaintiff] possesses no private right of action under federal law, the fact that federal law might be an element in its state law claims is not sufficient to present a federal question supporting jurisdiction under 28 U.S.C. ß 1331”); Johnson v. Circuit City Stores, Inc. 71 F. Supp. 2d 1026 (N.D. Cal. 1999) (Y2K Act does not create a federal cause of action and therefore claim did not present a claim “arising under” federal law nor was federal jurisdiction present). 

Likewise, IGRA does not provide Plaintiffs with a private right of action. State law determines whether a state has validly bound itself to a compact.  "IGRA includes no provisions which address a state's allocation of authority or procedure to enter gaming compacts or more generally how to determine whether a state and tribe have entered into a valid compact.”  Pueblo of Santa Ana v. Kelly, 104 F.3d 1546, 1557-58 (10th Cir. 1997) (emphasis added).  The present case focuses solely on whether the Governor of Oregon acted within his powers under the Oregon Constitution and thus whether the State has lawfully "entered into" a compact with the Confederated Tribes.  No interpretation or application of IGRA is required by the Complaint.

The Confederated Tribes have chosen not to participate in the determination of the Governor's power under the Oregon Constitution.  The State Defendants have apparently acquiesced to the Tribes’ decision and are actively seeking to avoid having this state powers case decided on the merits in the state forum.  But, "[t]he Tribe's decision not to participate as a party cannot deprive this Court [Supreme Court of Wisconsin] of its core power to interpret the Wisconsin Constitution and resolve disputes between coequal branches of state government." See Panzer v. Doyle, 680 N.W. 2d 666 (Wisc. 2004) (Memorandum and Order remanding to state court a determination of whether there was lawful entry into a compact amendment by the state governor).  "The upshot of accepting the Governor's invitation to dispose of this case on procedural technicalities would be to insulate this agreement and any future agreement between a governor and a tribe from the powers of state judicial review."  Id  at 31.  The Governor’s similar effort to defeat the structure of government of the State of Oregon should likewise be denied. The Governor's sworn duty is to lawfully execute the laws and Constitution of the State of Oregon; he is not free to abandon that duty to expedite unlawful uses of power (e.g., usurpation of legislative prerogative) or any unlawful activity under the laws of the State.

Defendants unabashedly assert that, “IGRA forms an essential element of plaintiffs’ cause of action against the Tribes  * * * * ”, and that, “ * * * Plaintiffs rely on IGRA for their claim for relief against the Tribes.” State Defendants Response at 20).  Plaintiffs’ wonder what complaint Defendants are talking about.  Certainly not the operative complaint because it contains no allegations against the Tribes, seeks no relief from the Tribes, and most significantly, does not ask the Court to make any declaration against the Tribes.

It is disingenuous for Defendants to pretend a full-scale shift in the tenor of the case has occurred, when no such shift has occurred.  Defendants’ phantom claims for relief against the Tribes are not a part of this action.  Despite Defendants’ protestations otherwise, such claims will have to be dealt with at another time, in another case, by different parties. This state case concerns state powers, rights, and duties arising under the state constitution and state law as plainly set forth in the unamended Complaint. Plaintiffs’ discussion of Defendants’ unlawful conduct under IGRA did not raise federal issues, but even if it did, in the absence of a private right of action under IGRA, this Court has no federal question jurisdiction.    Plaintiffs’ complaint simply is an action to vindicate the Oregon Constitution, nothing more.

B.    The “Voluntary-Involuntary” Rule Does Not Apply in this Case.

The Voluntary-Involuntary rule does not apply for each of the reasons set forth below:

1.    Authorities cited by Defendants in support of their Voluntary-Involuntary rule arguments do not support removal in this case.

Defendants cite the Keating dicta and the Alexander case as support for the positions that Plaintiffs have taken voluntary actions that amend the nature of the complaint.  These cases do not provide an adequate basis for the extreme positions Defendants take in their responses to the Motion to Remand.

In Great Northern Railway v. Alexander, 246 U.S. 276 (1918), the plaintiff commenced a wrongful death suit in Montana against a railroad company based in Minnesota.  246 U.S. at 277.  Plaintiff alleged that the fact that the deceased was employed in interstate commerce when injured brought the case within the scope of the Federal Employers’ Liability Act, which contained a prohibition against removal.  Id. at 280.  The defendant admitted the case was not removable when it was commenced, but argued that the failure of the plaintiff to prove his allegation that the deceased was employed in interstate commerce when he was injured left the complaint as if that allegation had not been incorporated into it, and that therefore the case became removable for diversity of citizenship when the plaintiff rested his case.  Id. at 281.  The Court disagreed, stating that “conversion can only be accomplished by the voluntary amendment of his pleadings by the plaintiff.” Id.  Here, Defendants suggest that the mention of potential issues relating to unlawful gambling under IGRA fundamentally changes the Complaint.  This argument contradicts the very cases State Defendants cite as the basis of jurisdiction under the Voluntary-Involuntary rule. 

The Alexander case suggests that for the Voluntary-Involuntary rule to apply, the complaint itself is what must be voluntarily amended.  See Alexander, 246 U.S. at 281-282 (stating that removal is “determined by the allegations of the complaint or petition” and that “the plaintiff may, by the allegations of his complaint determine the status with respect to removability of a case”).  Even if this Court concludes that something less than formal amendment raises a federal question, the bar must indeed be higher than a mere argument raised by Plaintiffs in response to a defendant’s motion denying personal jurisdiction.   As the complaint now stands, nothing raised therein, entitles Plaintiffs to the relief that Defendants imply but fail to articulate.  Indeed, even if Plaintiffs wanted to prosecute the Tribes for unlawful violations of IGRA they would have no standing to do so. 

In People of the State of California v. Keating, 986 F.2d 346 (9th Cir. 1993), the State of California filed a consumer fraud action in state court against a company’s former officers.  Id. at 347.  Though all claims in the complaint were brought under state law, one of the defendants filed a third-party complaint against a separate company, Resolution Trust Corporation (RTC).  Id.  A federal law provided that any suit to which the RTC was a party “shall be deemed to arise under the laws of the United States.”  Id. at 348.  However, the Court determined that removal was not appropriate because the case was transformed into an action “arising under” federal law “not by the voluntary action of the plaintiff, but instead by the action of a defendant.”  Id.

Both Alexander and Keating dealt with specific federal statutes that, unlike IGRA, had a direct bearing on whether the case could be removed or not.  Although Alexander dealt with a federal statute, the ultimate issue was related to diversity, not a federal question. 

Keating, although ostensibly a federal question case, involved a statute that specifically mandated federal jurisdiction, making it more akin to a diversity jurisdiction case.  Although it may be possible to stretch the Voluntary-Involuntary rule to cover cases like Keating that fall outside of the diversity context, the rule cannot be stretched so far as to cover the facts in the current case.

Defendants have cited no cases where the facts of the case, alleged outside a complaint, create federal question jurisdiction.

2.    The Voluntary-Involuntary rule should be rejected in this case because it contradicts Well-Pleaded Complaint rule.

Defendants allege that the Voluntary-Involuntary rule is consistent with the Well-Pleaded Complaint rule.  State Defendant’s Response at 12.  There is little doubt that in this case, the two doctrines cannot peacefully co-exist.  Should the Court accept Defendants arguments, it would scrap the well-pleaded complaint doctrine in order to apply the Voluntary-Involuntary rule.  This Court should reject this argument.

As discussed in Plaintiffs’ Motion to Remand, federal-question jurisdiction exists “only when a federal question is present on the face of the plaintiff’s properly pleaded complaint.”  Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987).  “[T]he existence of federal jurisdiction depends solely on the plaintiff’s claims for relief and not on anticipated defenses to those claims.” ARCO Envtl. Remediation v. Mont. Dept. of Health and Envtl. Quality, 213 F.3d 1108,1113 (9th Cir. 2000); it is the claims for relief contained in the complaint itself that determine jurisdiction. 

Without question, Defendants’ arguments as to the application of the Voluntary-Involuntary rule to the present case would negate the operation of the Well-Pleaded Complaint rule.  In Oklahoma Tax Commission v. Graham, 489 U.S. 838 (1989), the State of Oklahoma sued an Indian Tribe to recover excise taxes on bingo games and sales of cigarettes.  The Supreme Court reversed the trial court’s denial of remand stating that federal jurisdiction “must be determined from what necessarily appears in the plaintiff’s statement of his own claim in the bill or declaration, unaided by anything alleged in anticipation of avoidance of defenses which it is thought the defendant may interpose.”  Id. at 840-41.  The Court went on to say that “[t]he possible existence of a tribal immunity defense…did not convert [state claims] into federal questions.”  Id. at 841. 

In the current case, much like the Oklahoma Tax Commission case, the Tribes have allege a sovereign immunity defense and filed a motion to dismiss.  Plaintiffs’ responses to the motion commented on the viability of that defense, but this alone does not convert the action into one “arising under” the laws of the United States. If when Plaintiffs first filed this action they had anticipated the tribal immunity defense, federal jurisdiction would not have been proper on that basis. Franchise Tax Bd. v. Laborers Trust, 463 U.S. 1, 10 (1983).  But, now, Defendants suggest that because the defense is discussed later, in the context of a motion to dismiss where that defense is actually asserted, that Voluntary-Involuntary rule would allow federal jurisdiction to attach.  This argument is inconsistent with the law and with logic.  Had Plaintiffs anticipated  the federal defense in the complaint, federal jurisdiction would not attach.   But, as Plaintiffs have responded to that defense after it has actually been asserted, Defendants suggest that that is a voluntary act that does create federal jurisdiction.  Defendants’ attempts to convince this Court otherwise are simply wrong.

State Defendants attempt to sidestep Oklahoma Tax Commission by asserting that the present case is distinguishable because unlike in Oklahoma Tax Commission, Defendants “do not contend that their federal defenses provide a basis for removal.”  State Defendants Response at 22.  Instead, Defendants argue that removal is based on “a federal claim by Plaintiffs, not a federal defense by defendants.”  Id. (emphasis original).

State Defendants attempt to create a distinction where none exists.   Defendants cannot seriously assert that Plaintiffs have asserted a claim for relief based on federal law.  Plaintiffs have made it clear that they “seek no remedy against the Tribes, nor do they seek a declaration about any rights or powers or privileges of the Tribes.”  Plaintiffs’ Response to Tribes Motion to Dismiss at 2.  Plaintiffs do not make any claims based on IGRA.  They have simply responded to the federal defense put forth by the Tribes.  Jurisdiction cannot be established based on federal questions that may arise during the course of the litigation in connection with some defense, allegation, or counterclaim.  Franchise Tax Bd. v. Laborers Trust, 463 U.S. 1, 10 (1983).  Any federal questions raised by Plaintiffs’ mention of IGRA were raised in connection with the Tribes immunity defense, and so cannot be the basis for federal jurisdiction.

C.    Even if the Voluntary-Involuntary rule applies, federal question jurisdiction still does not exist.

Assuming, arguendo, that the Voluntary-Involuntary rule applies to this case, federal jurisdiction is still absent.  Federal question jurisdiction is not automatically conferred when any federal question is raised in any context. Rather, jurisdiction exists only where federal law either creates the cause of action or the relief sought by the plaintiff is dependant on resolving a substantial question of federal law.  Franchise Tax Bd., 463 U.S. at 27-28; see also State Defendants’ Response at 19.  State Defendants claim that Plaintiffs’ claim fulfills both of these criteria; in reality, the claim does not fulfill either one.  See State Defendants Response at 20.

First, as discussed above, IGRA does not create a private cause of action.  But, even if it did, Plaintiffs have not asserted any claim for relief under IGRA. State Defendants contend that “[t]he fact that plaintiffs voluntarily requested relief under IGRA makes the case removable.”  State Defendants Response at 23.  But Plaintiffs have not requested relief under IGRA.  They have only cited IGRA to show that the tribal immunity defense does not apply to this case.

Second, contrary to State Defendants’ assertions, there simply is no “substantial question of federal law” involved in this dispute.  Although there are many state law claims that can be said to depend in some way on federal propositions, not all such cases “arise under” federal law.  Hunter v. United Van Lines, 746 F.2d 635, 645 (9th Cir. 1984).  It is not enough that a federal issue is an element of a state law claim or that the state law claim makes some reference to federal law.  For “arising under” jurisdiction, vindication of a state law right must necessarily depend on some construction of federal law.  See Franchise Tax Bd., 463 U.S. at 27-28. 

As noted earlier, State Defendants claim that “plaintiffs rely on IGRA for their claim for relief against the Tribes” and that the Court “will need to interpret IGRA to resolve plaintiffs’ assertion that the compact allows illegal Class III gaming in violation of IGRA.”  State Defendants Response at 20.  These assertions are simply not true.  Plaintiffs cite IGRA only to show that the Tribes are not immune from suit not as a substitution claim.  Also, the provisions of IGRA mentioned by the Plaintiffs defer entirely and completely to state law.  No interpretation of federal law will be necessary, since once the state law determinations have been made, IGRA’s application will be nearly automatic. 

Federal law is clear that state court proceedings are presumed adequate to raise the federal claim “in the absence of unambiguous authority to the contrary.”  Penzoil v. Texaco, Inc.,  481 U.S. 1, 15, 107 S.Ct. 1519, 1528 (1987). 

State Defendants cite Pueblo of Santa Ana v. Kelly, a Tenth Circuit case, for the proposition that “IGRA is a federal statute, the interpretation of which presents a federal question suitable for determination by a federal court.”  State Defendants Response at 20.  There is nothing wrong with this statement—IGRA certainly is a federal statute, so logically, it presents federal questions.  But State Defendants’ analysis is missing a key element. A plaintiff’s right to relief under state law must require resolution of a substantial question of federal law.  Chicago v. Int’l Coll. Of Surgeons, 522 U.S. 156, 164 (1997). Here, Plaintiffs’ right to relief is based entirely on Oregon state law.   In this case, federal law depends on some construct of state law, not the other way around.  Any federal questions raised by IGRA are not substantial and so cannot provide a basis for federal jurisdiction.

D.    Alternatively, If This Court Concludes That It Has Jurisdiction To Hear This Case, the Court Should Exercise Its Discretion To Remand The Case.

If this Court agrees with Defendants that federal jurisdiction exists, this Court should refuse to exercise jurisdiction and remand the matter based on federal abstention principles.  Quackenbush v. Allstate Ins. Co. 517 U.S. 706, 730-31, 116 S. Ct. 1712, 1723. 

A court may abstain from hearing a case that has been removed to federal court where “denying a federal forum would clearly serve an important countervailing interest”  Id. at 1721.  Abstention is warranted by considerations of "proper constitutional adjudication," "regard for federal-state relations," or "wise judicial administration," Id.  Federal courts have refused to exercise jurisdiction in cases raising issues "intimately involved with [the States'] sovereign prerogative," the proper adjudication of which might be impaired by unsettled questions of state law, see Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 28, 79 S.Ct. 1070, 1072-1073, 3 L.Ed.2d 1058 (1959) (court exercised a “fair and well-considered judicial discretion in staying proceeding spending the resolution of a declaratory judgment action and subsequent decision of the Supreme Court of Louisiana”).

This case requires the federal courts to make delicate decisions about ultra vires actions of the Governor of Oregon;  violations of state separation of powers principles; and violations of State public policy.  These issues are best left to Oregon courts to decide.  Just as in Quackenbush and Louisiana Power and Light Co., this Court should, in the context of this declaratory judgment action, defer adjudication of these issues until state courts have resolved the issues.

III.        CONCLUSION

This Court should grant Plaintiffs’ motion for remand and award Plaintiffs their reasonable attorney fees incurred in this motion.

DATED this 3rd day of September, 2004.

Hutchinson, Cox, Coons,
DuPriest, Orr & Sherlock, P.C.

By: William H. Sherlock, OSB #90381
E. Bradley Litchfield, OSB #99311
Of Attorneys for Plaintiffs
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