Trudgeon v. Fantasy Springs Casino

Opinion

Plaintiff appeals from summary judgment for defendants in this action for personal injuries sustained at an Indian gaming casino. He principally contends the court improperly extended the Indian tribe’s

Factual and Procedural Background

The Cabazon Band of Mission Indians (the Tribe) is a federally recognized Indian tribe. Defendant Cabazon Bingo, Inc. (Cabazon Bingo) is a corporation organized by the Tribe which operates Fantasy Springs Casino (Fantasy Springs), a gaming and entertainment complex located on tribal land. Plaintiff and his wife visited Fantasy Springs on or about September 17, 1995, to eat supper and play bingo. At the time, plaintiff was 66 years old.

As the couple left the casino to go to their car after the bingo game, a fight broke out among other patrons. Although plaintiff was not a participant in the fight, he was knocked off his feet by the fighters, breaking his hip and shattering his elbow.

Plaintiff filed the present action in April 1996 against Fantasy Springs, Cabazon Bingo, and Does 1 through 50. Plaintiff did not sue the Tribe itself. The complaint alleged defendants knew or should have known that numerous prior assaults and crimes had occurred in the casino area, but failed to provide reasonable protection to business visitors from the criminal acts of third persons.

In January 1997, defendants moved for summary judgment on the ground the action was barred by sovereign immunity. In June 1997, the court granted defendants’ motion and, in November 1997, entered judgment for defendants.

Discussion

A. Tribal Sovereign Immunity

The federal government has “plenary and exclusive power” to deal with Indian tribes. (Bryan v. Itasca County (1976) 426 U.S. 373 , 376, fn. 2 [ 96 S.Ct. 2102 , 2105, 48 L.Ed.2d 710 ].) Under federal case law, “Indian

Although Kiowa Tribe of Okla. v. Manufacturing Technologies, Inc., supra, 523 U.S. 751 , involved a contract claim, the dissenting opinion, in suggesting immunity would be unjust to tort victims, noted that “. . . nothing in the Court’s reasoning limits the rule to lawsuits arising out of voluntary contractual relationships.” (523 U.S. at p. 766 [118 S.Ct. at p. 1708] (dis. opn. of Stevens, J.).) Other courts have recognized immunity against tort claims arising from tribal commercial activities. In Long v. Chemehuevi Indian Reservation (1981) 115 Cal.App.3d 853 [ 171 Cal.Rptr. 733 ], for example, this court held that sovereign immunity barred a personal injury suit arising from a boating accident at a marina located on an Indian reservation and owned and operated by the tribe as a profit-seeking operation. (Id., at p. 858; see also Morgan v. Colorado River Indian Tribe (1968) 103 Ariz. 425 , 428 [ 443 P.2d 421 , 424] [immunity barred suit for accident at marina operated as tribal enterprise outside reservation boundaries]; Seminole Tribe of Florida v. Houghtaling (Fla.Dist.Ct.App. 1991) 589 So.2d 1030 , 1032 [personal injury suit by customer of tribal bingo hall].)

These decisions do not directly address the issue before us, since they involved claims against the tribes themselves rather than against a separate business entity organized by the tribe as in the present case. We have not found any California authority addressing the issue whether immunity against claims arising from commercial activity should be extended to such entities. In Long v. Chemehuevi Indian Reservation, supra, 115 Cal.App.3d 853 , we noted the existence of “some authority that suits may be maintained against a proprietary corporation established by a sovereign government where the incident in question does not involve the exercise of governmental powers.” (Id., at p. 861.) However, we did not address whether immunity should apply in such a case, because the plaintiffs in Long did not attempt “to distinguish the tribe’s immunity as a proprietor from its immunity as a government.” (Ibid.)

Other jurisdictions which have considered whether sovereign immunity applies to tribal business entities have reached varying conclusions. A few

Although courts have looked to different factors in deciding whether to extend tribal immunity to business enterprises, the principal criteria were recently summarized by the Supreme Court of Minnesota in Gavle v. Little Six, Inc., supra, 555 N.W.2d 284 (hereafter Gavie). In Gavie a casino employee sued the tribal corporation which owned the casino for sexual harassment, pregnancy and racial discrimination, civil rights violations and other torts arising from her employment. The court identified the relevant criteria in addressing the immunity issue as follows:

“1) whether the business entity is organized for a purpose that is governmental in nature, rather than commercial;

“2) whether the tribe and the business entity are closely linked in governing structure and other characteristics; and

“3) whether federal policies intended to promote Indian tribal autonomy are furthered by the extension of immunity to the business entity.” (Gavle, supra, 555 N.W.2d, at p. 294.)

We find Gavie’s three-factor analysis to be an accurate summation of the relevant case law. Moreover, the analysis is particularly relevant here since Gavie, like this case, involved a tort action against a tribal corporation which operated a gambling casino. We therefore will use that analysis in considering whether Cabazon Bingo is immune.

1. Purpose for Which the Tribal Business Is Organized

In the wake of Kiowa Tribe of Okla. v. Manufacturing Technologies, Inc., supra, 523 U.S. 751 , it might be questioned whether the first criterion identified by the court in Gavle — whether the purpose of the tribal business entity is governmental or commercial — is still relevant. As noted ante, the court in Kiowa held that tribes are immune from contract claims “whether those contracts involve governmental or commercial activities . . . .” (523 U.S. at p. 760 [118 S.Ct. at p. 1705].) If a tribe enjoys immunity for its commercial as well as its governmental activities, then arguably the fact it creates a business entity for a purely commercial purpose should not matter in determining the immunity of the entity.

In another sense, however, the purpose for which the entity is created may remain relevant even after Kiowa. Because Kiowa involved liability of a tribe and not a tribal business entity, the court did not consider the possible relevance of the govemmental/commercial distinction in determining the liability of tribal entities. It is clear from the cases involving tribal entities that such entities have no inherent immunity of their own. Instead, they enjoy immunity only to the extent the immunity of the tribe, which does have inherent immunity, is extended to them. In view of that fact, it is possible to imagine situations in which a tribal entity may engage in activities which are so far removed from tribal interests that it no longer can legitimately be seen as an extension of the tribe itself. Such an entity arguably should not be immune, notwithstanding the fact it is organized and owned by the tribe.

The United States Supreme Court has recognized the importance of gaming in promoting the self-determination of the Tribe. In California v. Cabazon Band of Mission Indians (1987) 480 U.S. 202 [ 107 S.Ct. 1083 , 94 L.Ed.2d 244 ], the court observed: “The Cabazon and Morongo Reservations contain no natural resources which can be exploited. The tribal games at present provide the sole source of revenues for the operation of the tribal governments and the provision of tribal services. They are also the major sources of employment on the reservations. Self-determination and economic development are not within reach if the Tribes cannot raise revenues and provide employment for their members.” (480 U.S. at pp. 218-219 [107 S.Ct. at p. 1093].)

Additionally, the Indian Gaming Regulatory Act ( 25 U.S.C. §§ 2701-2721 ), which governs all Indian gaming, requires that revenues from gaming be used only “(i) to fund tribal government operations or programs; [¶] (ii) to provide for the general welfare of the Indian tribe and its members; ft[] (iii) to promote tribal economic development; [1[] (iv) to donate to charitable organizations; or HQ (v) to help fund operations of local government agencies . . . .” ( 25 U.S.C. § 2710 (b)(2)(B).) Here, the parties stipulated that Fantasy Springs operates pursuant to this provision of that act.

These authorities recognize “the unique role that Indian gaming serves in the economic life of here-to-fore impoverished Indian communities across this country.” (Gavle, supra, 555 N.W.2d at p. 295.) That fact, along with the specific reference to the self-determination of the Tribe in the resolution creating Cabazon Bingo, supports the conclusion that the underlying purpose of Cabazon Bingo is governmental in nature notwithstanding its for-profit status. Cases which have not extended immunity to tribal enterprises typically have involved enterprises formed “solely for business purposes and without any declared objective of promoting the [tribe’s] general tribal or economic development. . . .” (Dixon v. Picopa Const. Co., supra, 160 Ariz. 251 , 257 [ 772 P.2d 1104 , 1109].) That is not the situation here. We therefore conclude the first Gavie criterion supports immunity.

The second factor articulated in Gavie — whether the tribe and the business entity are closely linked in governing structure and other characteristics— essentially examines the extent to which the tribe controls the composition and operations of the business entity. In Gavie, the court in finding immunity noted the facts that the casino corporation was organized under tribal law; the corporation was wholly owned by the tribe; the governing board included at least three members of the tribal business council; a majority of the board had to be tribal members; and board members could be removed by a vote of the tribe. ( 555 N.W.2d 284 , 295; see also White Mountain Apache Indian Tribe v. Shelley, supra, 107 Ariz. 4 , 6 [ 480 P.2d 654 , 656] [tribal council selected majority of board members of tribal timber company].) The facts are analogous here.

In connection with the summary judgment motion, the parties stipulated to these facts: The shareholders of Cabazon Bingo consist of members of the Cabazon General Council, which consists of all tribal members over eighteen years old; the general council elects six tribal members to the Cabazon Business Committee every four years; and the business committee functions as the board of directors of Cabazon Bingo and appoints its officers. Further, Cabazon Bingo’s articles of incorporation provide that directors may be removed by affirmative vote of a majority of the outstanding shareholders, i.e., the members of the Tribe. It is thus apparent that the Tribe, through its members and their elected officials, directly oversees the operations of Cabazon Bingo. (Cf. Dixon v. Picopa Const. Co., supra, 160 Ariz. 251 , 256 [ 772 P.2d 1104 , 1109] [no immunity where tribal corporation “ha[d] a board of directors, separate from the tribal government, which exercise[d] full managerial control over the corporation”].)

Plaintiff notes that the articles of incorporation of Cabazon Bingo do not require that its directors or officers be tribal members. However, while no such requirement is stated in the articles, it appears as a practical matter that the directors are members of the Tribe, since, as noted ante, the business committee — to which six tribal members are elected — functions as the board of directors. And while there is no indication that the officers of Cabazon Bingo must be tribal members, “. . . control of a corporation need not mean control of business minutiae; the tribe can be enmeshed in the direction and control of the business without being involved in the actual management.” (Gavie, supra, 555 N.W.2d 284 , 295.) We therefore conclude the second Gavie criterion also supports immunity.

Here, the complaint alleged that at all times “each of the Defendants was the agent and employee of each of the remaining Defendants and in doing the things hereinafter alleged, was acting within the scope of such agency and employment.” (Italics added.) There was no allegation from which it could be inferred that any individual exceeded his or her authority as an agent of the Tribe. The lower court was justified in concluding plaintiff had not asserted facts sufficient to overcome immunity against any potential individual defendant.

Further, it is evident that plaintiff could not make such an allegation based on the facts set forth in the complaint. Plaintiff’s theory of negligence was that the defendants should have provided adequate security to protect patrons in the casino area. In an analogous case, it was recently held that individual tribal members were immune from a negligence suit brought by an employee who slipped and fell in a casino parking lot. (Romanella v. Hayward, supra, 933 F.Supp. 163 .) The court reasoned that, because the tribal members were responsible for maintaining the parking lot, the negligence claims against them “directly relate[d] to their performance of their official duties.” (Id., at p. 168.)

Here, similarly, control and maintenance of the casino area manifestly were related to the official duties of the individuals entrusted with the operation of the casino. Any failure to provide adequate security therefore was an act within the official authority of those individuals and, as such, was subject to immunity.

Conclusion

For these reasons, we agree with the lower court that the present suit is barred by sovereign immunity. We acknowledge, as did the United States

Disposition

The judgment is affirmed. Costs to respondents.

Ward J., and Gaut J., concurred.

Appellant’s petition for review by the Supreme Court was denied July 28, 1999. Mosk, J., and Brown, J., were of the opinion that the petition should be granted.