THE HONORABLE JOHN C. COUGHENOUR · case no. 2:17-cv-00088-jcc schwabe, williamson & wyatt, p.c. attorneys at law 1420 5th avenue, suite 3400 seattle, wa 98101-4010 telephone: 206.622.1711

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

MOTION TO DISMISS - 1 CASE NO. 2:17-CV-00088-JCC

SCHWABE, WILLIAMSON & WYATT, P.C. Attorneys at Law

1420 5th Avenue, Suite 3400 Seattle, WA 98101-4010 Telephone: 206.622.1711

PDX\124302\192359\CSMM\20094110.2

THE HONORABLE JOHN C. COUGHENOUR

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON

MARGRETTY RABANG, OLIVE OSHIRO, DOMINADOR AURE, CHRISTINA PEATO, and ELIZABETH OSHIRO,

Plaintiffs, v. ROBERT KELLY, JR., RICK D. GEORGE, AGRIPINA SMITH, BOB SOLOMON, LONA JOHNSON, KATHERINE CANETE, RAYMOND DODGE, ELIZABETH KING GEORGE, KATRICE ROMERO, DONIA EDWARDS, and RICKIE ARMSTRONG,

Defendants.

Case No. 2:17-cv-00088-JCC MOTION OF DEFENDANTS KELLY, GEORGE, SMITH, SOLOMON, JOHNSON, CANETE, GEORGE, ROMERO, EDWARDS, AND ARMSTRONG TO DISMISS PURSUANT TO F. R. CIV. P. 12(B)(1) AND F. R. CIV. P. 12(B)(6) NOTED FOR HEARING: Friday, March 24, 2017

I. INTRODUCTION AND REQUEST FOR RELIEF

For nearly four years, the plaintiffs and their counsel have sought to prevent the

Nooksack Indian Tribe from disenrolling them from the Tribe. This lawsuit is just the latest

in a series of lawsuits in multiple jurisdictions, administrative appeals to the Bureau of Indian

Affairs, public campaigns, and private entreaties to state and federal agency employees

intended to interfere with and defame the Tribe and its agents and employees, prevent

disenrollment, interfere with the Tribe’s self-governance, and force the Tribe’s leadership

from office. ¶ 2 and Exhibit 1, Declaration of Rickie Wayne Armstrong (Armstrong Decl.”).

Because this is nothing more than an intra-tribal dispute inartfully pled as a RICO suit, the

Case 2:17-cv-00088-JCC Document 34 Filed 03/02/17 Page 1 of 25

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

Court lacks jurisdiction and must dismiss plaintiffs’ claims against defendants Robert Kelly,

Jr., Rick D. George, Agripina Smith, Bob Solomon, Lona Johnson, Katherine Canete,

Elizabeth King George, Katrice Romero, Donia Edwards, and Rickie Armstrong with

prejudice, pursuant to Fed. R. Civ. P. 12(b)(1).

Even if that were not the case, plaintiffs’ utter failure to meet their burden to state a

RICO claim, and to plead with the specificity required under Fed. R. Civ. P. 9(b), warrants

dismissal pursuant to Fed. R. Civ. P. 12(b)(6). Moreover, because the allegation of other facts

by plaintiffs consistent with the First Amended Complaint (FAC) could not possibly cure the

deficiencies, such dismissal should be with prejudice and without leave to amend.

II. STANDARDS FOR DISMISSAL

A. Dismissal Under Rule 12(b)(1)

The Court lacks subject matter jurisdiction over the plaintiffs’ claim because (1) the

underlying issue is a purely intra-tribal dispute; and/or (2) the Tribe has sovereign immunity

which has not been waived, and each of the moving defendants is protected by that sovereign

immunity because he or she was at all times acting in the scope of his or her official capacity.

A federal court is presumed to lack subject matter jurisdiction until the contrary affirmatively

appears. Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir.1989). The

plaintiffs have the burden of establishing subject matter jurisdiction in opposing the motion

because the plaintiffs are the party invoking the Court’s jurisdiction. Id.

Under Rule 12(b)(1), a court must dismiss claims over which it lacks subject matter

jurisdiction. Chapman v. Pier 1 Imports (U.S.) Inc., 631 F.3d 939, 954 (9th Cir. 2011). The

party asserting jurisdiction bears the burden of proving that the Court has subject matter

jurisdiction over the asserted claims, Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S.

375, 377, 114 S. Ct. 1673, 128 L. Ed. 2d 391 (1994); though, even if a defendant does not

move for dismissal under Rule 12(b)(1), the Court has a duty to establish subject matter

jurisdiction sua sponte. See United Investors Life Ins. Co. v. Waddell & Reed Inc., 360 F.3d


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

960, 967 (9th Cir. 2004). When determining the existence of subject matter jurisdiction, “the

district court is not confined by the facts contained in the four corners of the complaint—it

may consider [other] facts and need not assume the truthfulness of the complaint.”

Americopters, LLC v. F.A.A., 441 F.3d 726, 732 n.4 (9th Cir. 2006).

In reviewing a factual attack on a complaint, a court has wide discretion to allow

affidavits, other documents, and a limited evidentiary hearing to resolve disputed

jurisdictional facts, and a court’s reference to evidence outside the pleadings does not convert

the motion into a Rule 56 motion. Gemtel Corp. v. Community Redevelopment Agency, 23

F.3d 1542, 1544 n.1 (9th Cir. 1994). A court resolving a motion to dismiss under Rule

12(b)(1) must give the complaint’s factual allegations closer scrutiny than required for a

motion to dismiss pursuant to Rule 12(b)(6) for failure to state claim. Lipsman v. Sec'y of the

Army, 257 F Supp. 2d 3 (D. D.C. 2003).

Motions to dismiss for lack of subject matter jurisdiction based on the sovereign

immunity of an Indian Tribe, or because the case involves an intra-tribal dispute, are Rule

12(b)(1) matters. Fletcher v. United States, 116 F.3d 1315 (10th Cir. 1997) (sovereign

immunity); Ordinance 59 Ass'n v. Babbitt, 970 F. Supp. 914, 917 (D. Wyo. 1997) (sovereign

immunity); Miccosukee Tribe of Indians v. Cypress, 975 F. Supp. 2d 1298, 1307 (S.D. Fla.

2013) (intra-tribal dispute).

Where a defendant moves for dismissal for lack of subject matter jurisdiction, as well

as on other grounds, the Court should rule first on the Rule 12(b)(1) challenge, since if it must

dismiss a complaint for lack of subject matter jurisdiction, all other defenses and objections

become moot and do not need to be determined. Rhulen Agency, Inc. v. Alabama Ins.

Guaranty Ass'n, 896 F2d 674 (2nd Cir. 1990).

B. Dismissal Under Rule 12(b)(6)

A defendant may move for dismissal when a plaintiff fails to state a claim upon which

relief can be granted. Rule 12(b)(6). To grant a motion to dismiss, the court must be able to


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

conclude that the moving party is entitled to judgment as a matter of law, even after accepting

all factual allegations in the complaint as true and construing them in the light most favorable

to the non-moving party. Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). However, to

survive a motion to dismiss, a plaintiff must cite facts supporting a “plausible” cause of

action. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56, 127 S. Ct. 1955, 167 L. Ed. 2d

929 (2007). Although the Court must accept as true a complaint’s well-pleaded facts,

conclusory allegations of law and unwarranted inferences will not defeat an otherwise proper

Rule 12(b)(6) motion. Vasquez v. L.A. County, 487 F.3d 1246, 1249 (9th Cir. 2007).

The Supreme Court instructed in Twombly that a litigant cannot simply recite the

elements of a cause of action to avoid dismissal under this rule. He or she must instead

“provide the grounds of his entitlement to relief, which requires more than labels and

conclusions.” 550 U.S. at 555. The litigant must plead a claim that moves “across the line

from conceivable to plausible.” Id. at 570.

“[W]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need

detailed factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to

relief requires more than labels and conclusions, and a formulaic recitation of the elements of

a cause of action will not do.” Id. at 555. “[W]hen plaintiffs “have not nudged their claims

across the line from conceivable to plausible, their complaint must be dismissed.” Id. at 570.

In Ashcroft v. Iqbal, the Supreme Court set out a two-pronged approach for reviewing

the sufficiency of a complaint in the face of a motion to dismiss for failure to state a claim.

556 U.S. 662, 129 S. Ct. 1937, 1949-50, 173 L. Ed. 2d 868. First, the Court may identify

those statements in a complaint that are actually legal conclusions, even if presented as factual

allegations. Iqbal at 1949-50. Such conclusory statements are not entitled to a presumption

of truth. Id. Second, the Court presumes the truth of any remaining “well-pleaded factual

allegations,” and determines whether those allegations and reasonable inferences from them

plausibly support a claim for relief. Id. at 1950.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

In addition, RICO claims must satisfy Rule 9(b), which requires plaintiffs to “state

with particularity the circumstances constituting” their claims. Moore v. Kayport Package

Exp., Inc., 885 F.2d 531, 541 (9th Cir. 1989). The Ninth Circuit has interpreted this

particularity requirement as requiring that a plaintiff “state the time, place, and specific

content of the false representations as well as the identities of the parties to the

misrepresentation.” Perkumpulan Investor Crisis Ctr. Dressel-WBG v. Regal Fin. Bancorp,

Inc., 781 F. Supp. 2d 1098, 1108 (W.D. Wash. 2011), citing Odom v. Microsoft Corp., 486

F.3d 541, 553 (9th Cir. 2007); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106

(9th Cir. 2003)(“Averments of fraud must be accompanied by ‘the who, what, when, where,

and how’ of the misconduct charged.”); Moore v. Kayport Package Exp., Inc., 885 F.2d 531,

541 (9th Cir. 1989) (“Rule 9(b) requires that the pleader state the time, place, and specific

content of the false representations as well as the identities of the parties to the

misrepresentation.”).

Given these pleading requirements, plaintiffs may not simply assert that each of the

defendants made a false statement, but must at least “state the time, place, and specific content

of the false representations as well as the identities of the parties to the misrepresentation.”

Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004).

Where a complaint alleges that several defendants participated in a fraudulent scheme,

“Rule 9(b) does not allow a complaint merely to lump multiple defendants together but

require[s] plaintiffs to differentiate their allegations . . . and inform each defendant separately

of the allegations surrounding his alleged participation in the fraud.” Swartz v. KPMG LLP,

476 F.3d 756, 764-65 (9th Cir. 2007) (quotations omitted).

“Clearly, one conclusory allegation fails to meet the ‘who, what, when, where, and

how’ requirements to properly allege fraud with specificity.” Siver v. CitiMortgage, Inc., 830

F. Supp. 2d 1194, 1201 (W.D. Wash. 2011), citing Fed. R. Civ. P. 9(b). “The mere

conclusory statements in the complaint that an enterprise was conducted through the


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

fraudulent use of the United States mails and telephone wires is not sufficient to set forth a

claim under RICO, absent the allegation of some specific and identifiable scheme on the part

of the defendants.” Snowbird Constr. Co.,666 F. Supp. at 1442.

This heightened pleading requirement applies to all claims that sound in fraud, which

includes claims arising under RICO. Lancaster Community Hospital v. Antelope Valley

Hospital District, 940 F.2d 397, 405 (9th Cir. 1991). The heightened requirement also applies

to claims of conspiracy to defraud. Wasco Products, Inc. v. Southwall Technologies, Inc., 435

F.3d 989, 991 (9th Cir. 2006).

III. STATEMENT OF FACTS

As plaintiffs have alleged, each of the moving defendants is an employee of the

Nooksack Indian Tribe. FAC ¶¶ 10 – 16, 18 – 21. Most, but not all, of the moving defendants

are also enrolled members of the Tribe. Defendants Robert Kelly, Rick D. George, Agripina

Smith, Bob Solomon, Lona Johnson, and Katherine Canete are members of the Tribal

Council, the governing body of the Tribe. FAC ¶¶ 11 – 16; Exhibit 2, Armstrong Decl. Ms.

Canete is also the General Manager of the Tribe. FAC ¶ 16. Defendant Elizabeth King

George is the Director of the Nooksack Enrollment Department (NED). FAC ¶ 18.

Defendant Katrice Romero is the Director of the Nooksack Indian Housing Authority (NIHA).

FAC. ¶ 19. Defendant Donia Edwards is the Director of the Nooksack Education Department

(Edu.). FAC ¶ 20. Defendant Rickie Armstrong is the Tribe’s in-house attorney. FAC ¶ 21;

Armstrong Decl. ¶1.

B. Leadership and Governance of the Nooksack Tribe

The Tribe is a federally recognized Indian tribe. The Tribe’s governing body consists

of seven elected officials: One Chairman, one Vice-Chairman, one Treasurer, and four

Councilmembers. FAC ¶ 26. Each official is elected by vote of all eligible voters (Tribal

members who are 18 years or older). Const. & Bylaws of the Nooksack Indian Tribe (Const.),

Art. VI, Sec. 1(c). Exhibit 3, Armstrong Decl.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

Tribal Council Regular Elections are conducted on the third Saturday in March on

even numbered years. Nooksack Tribal Code (N.T.C.) 62.02.020. Exhibit 3, Armstrong

Decl. Starting with the 1990 election the Tribal Chairman, Tribal Secretary, and Council

Positions A and B elections are held every four years thereafter. Starting with the 1992

elections the Tribal Vice-Chairman, Treasurer, and Council Positions C and D are held every

four years thereafter. N.T.C. 62.02.030(B). Id. There are no limits to the number of terms a

Council Member may serve.

Eligible voters and candidates may contest the election results to the Election Board,

and final decisions of the Election Board may be appealed to the Nooksack Tribal Court

sitting as an appellate court. N.T.C. 62.07.020, .030. Under the time frames proscribed by

ordinance, a contest that is appealed must be decided within approximately fourteen days of

the election. Id.

If the time for appeals has passed for decisions of the Election Board and there are

no pending appeals of decisions, the Election Superintendent certifies the election.

N.T.C. 62.07.040. The new Council Members are sworn in the day after the Tribal Council

Secretary has received the Election Board’s certification of the results. N.T.C. 62.08.010.

Because the new Council Members cannot, by ordinance, be sworn in until the election results

are certified, and the results cannot be certified until all pending appeals have been decided,

the ordinance implicitly provides that the Council Members whose terms expired continue on

as holdovers during any appeal period, so the Tribe is not left in a position of being unable to

govern or transact the business of the Tribe.

This implicit allowance for holdover terms under the Constitution has been recognized

and upheld by the Nooksack Tribal Court sitting as an appellate court for election appeals.

See Campion v. Swanaset, No. NOO-C-496-004, April 7, 1997 Order at 2:38-40, Exhibit 3,

Armstrong Decl. (“Since the intent of the Nooksack tribal government was not with malice or

ill will, the court decrees the current tribal council shall stand until the orderly transition of


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

power of the government and the new election is completed.”). The Campion court also

refused the plaintiff’s request that it invalidate any actions taken by the council members

between the time of their election and the time of the decision. Campion, at 3:1 – 3.

Mr. Kelly was elected Chairman by a vote of all members of the Nooksack Indian

Tribe in 2010, and reelected in 2014. Exhibit 2, Armstrong Decl. Chairman Kelly’s second

term expires March 17, 2018. Id. He is, without any dispute, the Chairman of the Tribe and

a member of the Tribal Council. He is not in “holdover” status, as plaintiffs allege. There is

absolutely no factual or legal basis to support plaintiffs’ allegation, in footnote 1, that

Chairman Kelly’s receipt of his salary was part of a scheme to personally enrich the

defendants. FAC ¶ 31. Mr. Solomon was elected to the Tribal Council, Position A, by a vote

of all members of the Tribe in 2014. His term expires on March 17, 2018. Ms. Johnson also

was elected to the Tribal Council in 2014, occupying Position B, and her term expires on

March 17, 2018. Exhibit 2, Armstrong Decl. Neither Mr. Solomon nor Ms. Johnson are in

“holdover” status.

In 2016, there were four Tribal Council seats up for election: the Tribal Vice-

Chairman (held by Mr. George, who was elected in 2012), Treasurer (held by Ms. Smith,

elected in 2012), Council Position C (vacant following a recall election) and Council Position

D (held by Ms. Canete, elected in 2012, who is also employed as the Tribe’s General

Manager). FAC ¶ 28; Exhibit 2, Armstrong Decl.

Due to extraordinary circumstances related to the disenrollment of approximately 306

individuals, including the plaintiffs, and previous security concerns and threats of violence

associated with disenrollment protests, the Tribe postponed the regular elections that were to

have been held on March 26, 2016. Vice-Chairman George, Council Member/Treasurer

Smith, and Council Member Canete continued to occupy their Council seats as holdovers until

an election could be held, consistent with the holdover terms provided for under Nooksack

law. Armstrong Decl., ¶ 3.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

In August, 2016, the Northwest Regional Director of the BIA, Stanley Speaks

confirmed that neither the Nooksack Constitution nor federal law authorized the Secretary of

the Interior to conduct or approve Tribal Council elections. Exhibit 4, Armstrong Decl. As

Mr. Speaks noted, “Tribal Council elections are recognized as sovereign tribal processes.

Garcia v. Western Regional Director, 61 IBIA 45 (2015). Absent any constitutional authority

specifically instructing the Secretary to conduct a tribal election, it is up to the Nooksack

Tribe through its own internal processes and operating through its own internal forums to

carry out this inherently sovereign function.” Id., at 1-2.

In a breach of contract suit brought by the Tribe in November, 2016 against the

organization that provided its appellate court services, the Nooksack Tribal Court affirmed

sub silentio the validity of the Council Members’ holdover terms. Nooksack Indian Tribe v.

Northwest Intertribal Court System, Case No. 2016-CI-CL-006, (11/17/2016) (entering

preliminary injunction in Tribe’s favor over Northwest Intertribal Court System’s objection

that the Tribal Council had no standing to initiate litigation because of the alleged lack of

quorum), Exhibit 6, Armstrong Decl. The Order was not appealed.

Tribal Council elections were conducted in January, 2017, open to all enrolled Tribal

members over the age of 18, and the results were certified by the Election Superintendent,

pursuant to Title 62. Vice-Chairman George, Council Member/Treasurer Smith, and Council

Member Canete were reelected. New Council Member Roy L. Bailey was elected to fill the

vacant Position C. Exhibit 2, Armstrong Decl. The Council is fully seated. There were no

challenges to the election results.

C. The Disenrollment Dispute

The eligibility criteria for membership of the Nooksack Indian Tribe are identified in

the Tribe’s Constitution. Const. Art. II, Sec. 1. The Constitution further provides that the

Tribal Council is authorized to enact ordinances concerning future membership in the Tribe,

adoption into the Tribe, and loss of membership, subject to the approval of the Secretary of


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

Interior. Const. Art. II, Sec. 2. On June 21, 2013, in a Secretarial election called to amend the

membership criteria in the Constitution, Nooksack voters approved the deletion of Article II,

Section 1(H), which had permitted the membership in the Tribe of individuals who were at

least one- fourth degree Indian blood who could prove Nooksack ancestry to any degree.

After Article II, Section 1(H) was deleted, the Tribal Council amended the corresponding

section of the Tribe’s enrollment ordinance, Part 63.01.001(1)(h). Exhibit 3 and ¶ 8,

Armstrong Decl.

Between November 10, 2016 and November 22, 2016, the Tribe disenrolled 289

individuals, including the plaintiffs, who failed to demonstrate legally sufficient blood

connections to the Tribe to satisfy the criteria established under the Tribe’s amended

Constitution and enrollment code. ¶ 9 and Exhibit 6, Armstrong Decl.1

Because the plaintiffs were disenrolled, they are no longer entitled to the benefits of

Tribal membership. They do not qualify for services provided by Tribal departments and

agencies, including but not limited to housing, social services, health care, and educational

services. The Tribe has begun to take steps to disenroll the plaintiffs from the various

programs to which they had been entitled when they were enrolled Nooksack Tribal members.

The Tribe has also taken steps to evict two of the plaintiffs from residences on

Nooksack tribal trust property for failure to pay rent. NIHA is a division of the

Nooksack Tribal Administration. NIHA was empowered by the Tribe to manage

the Nooksack public housing stock, including the authority to enter into lease agreements and

pursue evictions. NIHA evicted Elizabeth Oshiro and obtained an Order of Eviction against

Margretty Rabang, although at present Ms. Rabang has neither vacated the premises nor been

removed. ¶ 10 and Exhibit 7, Armstrong Decl.; FAC ¶¶ 43-49, 53, 67-68, 71, 87a, 88e-k,

1 Those disenrolled on November 22, 2016 include plaintiffs Dominador Aure, Christina Peato, Elizabeth Oshiro, Olive Oshiro, and Michelle Roberts (Plaintiff and Relator in plaintiffs’ original Complaint). Plaintiff Margretty Rabang was disenrolled on June 3, 2016. FAC ¶ 9.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

88v.

Neither Ms. Oshiro nor Ms. Rabang appealed the Tribal court orders. Ms. Rabang,

however, filed a collateral attack in Whatcom County Superior Court, alleging claims of

trespass and seeking a writ of restitution restoring her to her property. The Whatcom County

Superior Court dismissed Rabang’s suit for lack of subject matter jurisdiction. ¶ 10,

Armstrong Decl. Ms. Rabang did not appeal the dismissal. Id.

Since the Tribe began the process of amending the Constitution and beginning the

disenrollment process, individuals subject to disenrollment, including the plaintiffs

(represented by the same counsel who represent them in this suit) have filed twenty-seven

lawsuits, appeals, and administrative appeals in multiple fora, including Tribal, state, and

federal courts (including this one), the BIA and its Interior Board of Indian Appeals (IBIA), as

well as grievances against all of the Tribe’s attorneys involved with (or falsely alleged to be

involved with) the disenrollment matters, which were all dismissed by the Washington State

Bar Association. ¶ 2 and Exhibit 1, Armstrong Decl. This RICO suit is simply the latest

effort in this long, intra-tribal dispute over Tribal leadership and disenrollment.

IV. LAW AND LEGAL ARGUMENT

A. Dismissal Under Rule 12(b)(1) is Warranted 1. The Court Lacks Jurisdiction to Adjudicate an Intra-Tribal Dispute

The Court should dismiss this lawsuit for lack of jurisdiction because it originates in a

several years-long intra-tribal dispute regarding membership in the Tribe, disenrollment, and

disagreement with the policies of Chairman Kelly and the Nooksack Tribal Council.

An intra-tribal dispute is one that affects matters of trial self-government and

sovereignty. Santa Clara Pueblo v. Martinez, 436 U.S. 49, 53, 98 S. Ct. 1670, 56 L. Ed. 2d

106 (1978). Some such matters include (but are not limited to) the inherent power to

determine tribal membership, to regulate domestic relations among members, to prescribe


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

rules of inheritance for members, and the power to punish tribal offenders. Montana v. U. S.,

450 U.S. 544, 564, 101 S. Ct. 1245, 67 L. Ed. 2d 493 (1981)(“Indian tribes retain their

inherent power to determine tribal membership”). The enforcement of a tribe’s own tribal

laws against members of the tribe – here, the Tribe’s Constitution, its Enrollment Ordinance,

its Election Ordinance, and its Unlawful Detainer Ordinance - is certainly within the scope of

the tribe’s inherent sovereignty. Boney v. Valline, 597 F. Supp. 2d 1167, 1175 (D. Nev.

2009).

“Federal courts do not have jurisdiction to resolve tribal law disputes. . . These

disputes are within the exclusive jurisdiction of the Community’s tribal court.” Smith, 875 F.

Supp. at 1362 (citing cases); Runs After v. United States, 766 F.2d 347, 352 (8th Cir. 1985)

(holding that federal courts do not have jurisdiction to interpret a tribal constitution or tribal

laws). The Tribe’s right to determine who is, and is not, a member, is immune from review

by a federal court. Santa Clara Pueblo, 436 U.S. at 72 n.32; Williams v. Gover, 490 F.3d 785,

790 (9th Cir. 2007) (“Under Santa Clara Pueblo, Mooretown Rancheria had the power to

squeeze the plaintiffs out, because it has the power to define its own membership. It did not

need the BIA’s permission and did not ask for it, and the BIA never purported to tell it how to

define its membership.”); see, also, Adams v. Morton, 581 F.2d 1314, 1320 (9th Cir. 1978)

(“[U]nless limited by treaty or statute, a Tribe has the power to determine tribal

membership.”), accord, Apodaca v. Silvas, 19 F.3d 1015 (5th Cir. 1994) (per curiam);

Ordinance 59 Assn. v. United States Dept. of the Interior, 163 F.3d 1150 (10th Cir. 1998).

In addition to the Tribe’s disenrollment decisions, the Court would also have to

adjudicate other issues of Tribal law: whether the Tribal Council and the Tribal departments

were authorized to act to revoke member benefits from disenrolled plaintiffs, or to evict

Rabang and Elizabeth Oshiro. Those issues have already been appropriately adjudicated by

Tribal authorities under Nooksack law, in the Nooksack Tribal Court. See Miccosukee Tribe of

Indians, 975 F. Supp. 2d 1298 (federal court lacked subject matter jurisdiction over intra-tribal


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

dispute alleging the misuse of broad and unfettered power bestowed on Tribe’s chief.).

Once tribal remedies have been exhausted, the Tribal court’s resolution of tribal law is

not subject to review by this Court. Smith, 875 F. Supp. at 1367 n.13; Burlington Northern

R.R. v. Crow Tribal Council, 940 F.2d 1239, 1246 (9th Cir. 1991) (explaining that exhaustion

of tribal court remedies would provide any subsequently reviewing federal court with an

“authoritative interpretation” of tribal law). Unless the Court determined the tribal court

lacked jurisdiction, plaintiffs are precluded from relitigating issues raised and resolved in the

tribal forum, including the authority of the holdover Council members to govern, and the

evictions of plaintiffs Rabang and Elizabeth Oshiro. Iowa Mut. Ins. Co. v. LaPlante, 480 U.S.

9, 19, 107 S. Ct. 971, 978, 94 L. Ed. 2d 10 (1987); United States v. Turtle Mountain Housing

Auth., 816 F.2d 1273, 1277 n.2 (8th Cir. 1987).

In In re: Sac & Fox Tribe of the Miss. In Iowa/Meskwaki Casino Litig., 340 F.3d 749

(8th Cir. 2003), the Court dismissed for lack of subject matter jurisdiction a RICO claim

centering on a dispute (like the case at bar) concerning the authority of a tribal council to act

on behalf of the tribe. Similarly, in Smith v. Babbit, the district court concluded it had no

basis to assert jurisdiction over a claim arising from an intra-tribal dispute regarding

membership—a subject matter governed by tribal code—despite the reference to RICO and

mail fraud. 875 F. Supp. at 1366, judgment aff’d, appeal dismissed in part, 100 F.3d 556, 559

(8th Cir. 1996).

RICO violations are inapplicable to tribal disputes and acts allegedly committed within

the course and scope of a defendant’s employment with the Tribe. Plaintiffs allege that

“RICO Defendants carried out their scheme to defraud Plaintiffs, through their official

positions in or other affiliations with the Tribe. . .” FAC ¶ 3. As the FAC demonstrates, the

issues in this lawsuit relate solely to “purely intramural matters touching exclusive rights of

self-government.” Donovan v. Coeur d’Alene Tribal Farm, 751 F.2d 1113 (9th Cir. 1985). As

such, the Court lacks jurisdiction and dismissal is warranted.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

2. Sovereign Immunity Bars Plaintiffs’ Claims

An additional basis for dismissal is the Tribe’s sovereign immunity. Notwithstanding

plaintiffs’ efforts to sue the defendants in their personal capacities (FAC, ¶ 22), they

affirmatively allege that all acts and omissions of the defendants’ alleged fraudulent conduct

were done in the course and scope of their governance of and employment by the Tribe (FAC

¶¶ 3, 10-21, 31-36, 41-48, 51-53, 57, 59-62, 65-68, 70-72, 100, 102, 104, 106, 108, 110, 112,

114-115, 119-125). Tribal sovereign immunity extends to individual tribal officers where, as

here, they are acting in their representative capacity and within the scope of their authority.

Stock West Corp. v. Taylor, 942 F.2d 655, 664 (9th Cir. 1991); Hardin v. White Mountain

Apache Tribe, 779 F.2d 476, 479 (9th Cir. 1985); accord Cameron v. Bay Mills Indian

Community, 843 F. Supp. 334, 336 (W.D. Mich. 1994); Smith, 875 F. Supp. at 1363.

Indeed, the acts complained of (disenrollment (FAC ¶¶ 9, 31, 41-43, 51, 54-55, 57, 59-

60, 70, 87a, 88a-d, 88l-q), eviction (FAC¶¶ 43-49, 53, 67-68, 71, 87a, 88e-k, 88v), and the

denial of benefits afforded to enrolled Tribal members (FAC¶ 60-62, 65-66, 70, 88p-u, 88w)

could not have been carried out but for the fact that the defendants were acting in their official

capacity to carry out the Tribe’s power and authority. Imperial Granite Co. v. Pala Band of

Indians, 940 F.2d 1269, 1271 (9th Cir. 1991) (plaintiffs’ complaint against tribal officials

barred by sovereign immunity because “the [officials’] votes individually [had] no legal

effect” and it was “the official action of the Band, following the [officials’] votes, that caused

[plaintiff’s] injuries”); see, also, Weeks Constr., Inc. v. Oglala Sioux Housing Auth., 797 F.2d

668, 670-71 (8th Cir. 1986) (“as an arm of tribal government, a tribal housing authority

possesses attributes of tribal sovereignty” and suits were barred by sovereign immunity).

The Tribal Council is an arm of Tribal government, and as such is presumptively

immune from suit. The same is true for each of the other Tribal departments plaintiffs have

identified as both “RICO enterprises” (Tribal Court, NIHA, Enrollment Department, Indian

Health Department, and Education Department). Plaintiffs have not alleged that this


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

immunity has been waived by the Tribe. RICO contains no language which suggests

Congress “unequivocally” waived Indian tribes’ sovereign immunity. Absent a congressional

or tribal waiver, the Tribe, like other sovereigns, is immune from suit for alleged RICO

violations. Smith, 875 F. Supp. at 1365, citing Bair v. Krug, 853 F.2d 672, 674-75 (9th Cir.

1988) (holding that State of Nevada was immune from RICO suit absent a waiver or its

sovereign immunity); Snowbird Constr. Co. v. United States, 666 F. Supp. 1437, 1440-41 (D.

Idaho 1987) (allowing RICO suit to proceed only after concluding that “sue and be sued”

clause in tribal ordinance “unequivocally expressed” waiver of sovereign immunity); see also

McMaster v. State of Minnesota, 819 F. Supp. 1429, 1434 (D. Minn. 1993), aff'd, 30 F.3d 976

(8th Cir. 1994) (holding that State of Minnesota was immune from RICO suit absent a waiver

of its sovereign immunity); Ungaro v. Desert Palace, Inc., 1989 WL 199264 (D. Nev. 1989)

(holding United States government is immune from RICO suit).

B. Plaintiffs’ RICO Claim Against the Tribal Government Fails as a Matter of Law.

1. The Tribal Council Cannot be Liable Under RICO

Plaintiffs allege that six of the seven members of the governing body of the Nooksack

Tribe constitute a RICO defendant called the “Holdover NITC.” It is well-established that a

governmental entity such as the Tribal Council is not capable of forming the criminal intent

necessary to support the alleged predicate RICO offenses. Smith, 875 F. Supp. at 1365 n.11

(dismissing RICO claims against tribal governing body, noting “The Business Council, as a

governmental entity, is not capable of forming the criminal intent necessary to support the

alleged predicate RICO offenses.”); Lancaster Community Hosp. v. Antelope Valley Hosp.

Dist., 940 F.2d 397, 404 (9th Cir. 1991) (holding that RICO claims against a public hospital

were properly dismissed because “government entities are incapable of forming [the]

malicious intent” required under RICO); County of Oakland v. City of Detroit, 784 F. Supp.

1275, 1283 (E.D. Mich. 1992) (holding that “a municipal corporation cannot form the


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

requisite criminal intent and cannot be held liable under civil RICO laws”).

2. Plaintiffs Have Not Pled, and Cannot Establish, Elements of RICO Claim

To establish the basic elements of a civil RICO claim, a private plaintiff must allege

(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. Sedima

S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985). The plaintiff must also allege that he was

injured in his business or property “by reason of” the RICO violation. 18 U.S.C. § 1964(c).

The complaint must allege sufficient facts to render the actual existence of a conspiracy

plausible. Twombly, at 566; American Dental Association v. Cigna Corp., 605 F.3d 1283,

1294 (11th Cir. 2010). The failure to allege any one of the elements of a RICO claim is fatal.

Here, plaintiffs have failed on every single one.

a. No “Conduct”

To adequately plead the “conduct” element of a RICO claim, a party must do more

than allege mere knowledge of or participation in the alleged enterprise; a party must allege

facts sufficient to establish that each of the named defendants participated in the operation and

management of the enterprise alleged in the complaint. Reves v. Ernst & Young, 507 U.S.

170, 113 S. Ct. 1163, 122 L. Ed. 2d 525 (1993). Plaintiffs, who allege that the defendants

have performed their employment or leadership duties to the Tribe and thereby have provided

services to an enterprise, have failed to meet this burden. Univ. of Md. at Balt., et al. v. Peat,

Marwick, Main & Co., 996 F.2d 1534, 1539 (3rd Cir. 1993) (“simply because one provides

goods or services that ultimately benefit the enterprise does not mean that one becomes liable

under RICO as a result. There must be a nexus between the person and the conduct in the

affairs of an enterprise. The operation or management test goes to that nexus.”).

Plaintiffs’ claims against defendant Armstrong, the Tribe’s in-house attorney, fail as a

matter of law because attorneys cannot be held liable under Civil RICO for the performance

of legal services, even if plaintiffs alleged such services involved fraud, because the

performance of legal services does not constitute “operation and management” of an


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

enterprise. See Baumer v. Pachl, 8 F. 3d 1341, 1344 (9th Cir. 1993) (lawyer’s role limited to

providing legal services cannot rise to the level of RICO liability); Handeen v. Lemaire, 112

F.3d 1339, 1348 (8th Cir. 1997) (attorney does not conduct an enterprise's affairs through run-

of-the-mill provision of professional services); Azrielli v. Cohen Law Offices, 21 F.3d 512,

521 (2nd Cir. 1994)(RICO liability where defendant “acted as no more than [an] attorney”);

Menuskin v. Williams, 940 F. Supp. 1199, 1210 (E.D. Tenn.)(attorney who performed

“standard, routine” services for construction company not liable under RICO).

b. No Enterprise

An enterprise under RICO’s §1962 must be “engaged in, or the activities of which

affect, interstate or foreign commerce.” An effect on commerce is a jurisdictional basis for 18

USCS § 1962. United States v Malatesta, 583 F2d 748 (5th Cir. 1978). “The statute requires

that the activity of the Enterprise, not each predicate act of racketeering, have an effect on

interstate commerce.” United States v. Rone, 598 F.2d 564, 573 (9th Cir. 1979), citing United

States v. Nerone, 563 F.2d 836, 852-54 (7th Cir. 1977). Plaintiffs must show a nexus of the

enterprise to interstate or foreign commerce, albeit minimal, to satisfy the requirement, which

they have failed to do. Rone, at 573.

c. No Predicate Acts of Racketeering

RICO’s §1962 sets forth four specific prohibitions aimed at different ways in which a

pattern of racketeering activity may be used to infiltrate, control, or operate “a[n] enterprise

which is engaged in, or the activities of which affect, interstate or foreign commerce.” RJR

Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090, 2097, 195 L.Ed.2d 476, 488-89 (2016).

These prohibitions can be summarized as follows: Section 1962(a) makes it unlawful to

invest income derived from a pattern of racketeering activity in an enterprise. Section 1962(b)

makes it unlawful to acquire or maintain an interest in an enterprise through a pattern of

racketeering activity. Section 1962(c) makes it unlawful for a person employed by or

associated with an enterprise to conduct the enterprise’s affairs through a pattern of


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

racketeering activity. Finally, §1962(d) makes it unlawful to conspire to violate any of the

other three prohibitions.

Plaintiffs appear to allege that the predicate acts of racketeering at issue are violations

of 18 U.S.C. §§ 1341 (mail fraud), 1343 (wire fraud), and 1956(a)(1)(A)(i) (money

laundering). Plaintiffs’ FAC fails on to satisfy plaintiffs’ burden to allege facts sufficient to

plausibly allege such violations, much less with the specificity required under Rule 9(b).

Conclusory allegations do not satisfy plaintiffs’ burden, and are not entitled to a presumption

of truth in evaluating defendants’ Rule 12(b)(6) motion.

(i) Mail and Wire Fraud

Plaintiffs allege a pattern of mail fraud, which occurs “whenever a person, ‘having

devised or intending to devise any scheme or artifice to defraud,’ uses the mail ‘for the

purpose of executing such scheme or artifice or attempting to do so.’” Bridge v. Phoenix Bond

& Indem. Co., 553 U.S. 639, 647, 128 S. Ct. 2131, 170 L. Ed. 2d 1012 (2008) (quoting 18

U.S.C. § 1341).

The plaintiffs’ theory of injury in most RICO mail-fraud cases depends on establishing

that someone - whether the plaintiffs themselves or third parties - relied on the defendant’s

misrepresentation. See Bridge, 553 U.S. at 658-59; In re U.S. Foodservice Inc. Pricing Litig.,

729 F.3d 108, 119 n.6 (2nd Cir. 2013), cert. denied, 134 S. Ct. 1938, 188 L. Ed. 2d 960 (2014).

That is because reliance will typically be a necessary step in the causal chain linking the

defendant’s alleged misrepresentation to the plaintiffs’ injury. Sergeants Benevolent Ass'n

Health & Welfare Fund v. Sanofi-Aventis United States LLP, 806 F.3d 71, 87 (2nd Cir. 2015).

If the person who was allegedly deceived by the misrepresentation (plaintiff or not) would

have acted in the same way regardless of the misrepresentation, then the misrepresentation

cannot be a but-for, much less proximate, cause of the plaintiffs’ injury. See Bridge, 553 U.S.

at 658-59.

A specific intent to deceive is an element of the predicate act, mail fraud, on which


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

plaintiffs’ RICO claim is based. 18 U.S.C. § 1341; Sun Sav. and Loan Assoc. v. Dierdorff, 825

F.2d 187 (9th Cir. 1987). Plaintiffs fail to allege the specific intent to deceive by any

defendant. Plaintiffs also fail to allege whether and how they, or third parties, were somehow

deceived by defendants’ alleged misrepresentations. Indeed, plaintiffs do not even allege that

the transmittals were made to third parties so as to further some fraudulent scheme, they

simply allege the defendants communicated amongst themselves, with the plaintiffs, and by

filing papers in tribal court. FAC ¶¶ 87 – 91. Plaintiffs do not allege that anyone was

deceived by these communications because the recipients were either the plaintiffs themselves

(who did not believe the communications to be true), or members of the alleged enterprise,

who were allegedly all in on the scheme. Id. Nor do plaintiffs allege any reliance on the

alleged misrepresentations, a necessary element of demonstrating proximate cause in a mail

fraud claim. Bridge, 553 U.S. at 658-59.

(ii). Money Laundering

Out of thin air in the middle of their complaint, and out of whole cloth, plaintiffs insert

an unfounded – and slanderous – allegation that all of the defendants “have, on multiple

occasions,” engaged in money laundering. FAC ¶ 92. There is not a single fact alleged to

support this claim, or to satisfy the plausibility standard under Iqbal. 556 U.S. 678 – 79.

Plaintiffs failed to plead the predicate act of money laundering.

e. No Pattern of Racketeering

A “pattern of racketeering” is demonstrated by two or more instances of “racketeering

activity” that occur within 10 years of one another. 18 U.S.C. § 1961(5). To establish a

“pattern of racketeering activity” for purposes of Section 1962(c), the plaintiffs must show

that each defendant committed at least two acts of racketeering, “the last of which occurred

within ten years ... after the commission of a prior racketeering act.” 18 U.S.C. § 1961(5).

Defendants have already established, above, that plaintiffs have not adequately alleged

“racketeering activity.” Even if that were not true, plaintiffs’ claims fail anyway because they


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

cannot establish a pattern.

One of the prime considerations in finding a pattern is whether the predicate acts

alleged are both related and sufficiently differentiated. Mullin v. Bassett, 632 F. Supp. 532,

542 (D. Del. 1986). If the acts are too similar, then no ongoing design or continuity can be

found. Id. The repetition of an act taken against a single victim or set of victims following

closely on the heels of the original wrong, which follows closely on the heels of the original

wrong, suggests no expansion, ongoing design, or continuity for RICO purposes and is

insufficient to establish a pattern of racketeering activity. Satellite Financial Planning Corp.

v. First Nat'l Bank, 646 F Supp 118, 120 (D. Del. 1986).

In Temporaries, Inc. v. Maryland National Bank, 638 F. Supp. 118 (D. Md. 1986), the

court held that there was no pattern of racketeering activity because the acts alleged took place

in a definite period of time and did not have the potential to continue indefinitely. In Satellite

Financial Planning Corp., the defendants’ acts took place in a one year period, with an

alleged goal of stealing the plaintiff’s business. Once that was accomplished, the defendants

ended the relationship and thus the court concluded that the defendants were not trying to

perpetrate an ongoing fraud. Id. at 121.

The court thereafter held that the plaintiffs failed to allege a pattern of racketeering

activity on two levels: first, the activities undertaken were not sufficiently unconnected in

time or substance to constitute separate criminal episodes. Second, the acts were not

sufficiently continuous and ongoing to create a pattern. Id.

Here, plaintiffs’ claims are similarly flawed. The sum and substance of their

allegations are that the governing body of the Tribe disenrolled a finite group of individuals,

including the plaintiffs, and thereafter denied certain of the plaintiffs benefits to which only

tribal members are entitled. The “scheme” was a single, continuous series of events that

occurred in a limited period of time (which would have been even shorter but for the twenty-

seven proceedings plaintiffs have initiated). There is no fact alleged that would show that the


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

defendants are trying to perpetuate an ongoing fraud or continuing harm against the plaintiffs.

Rather, from any construction of the FAC, it appears that with the completion of plaintiffs’

disenrollment proceedings and termination of tribal benefits, the goal of the alleged “scheme”

has been accomplished and will not continue. Aside from a wholly conclusory allegation that

“RICO Defendants’ fraudulent activities remain ongoing,” (FAC ¶ 72) there is not a single

fact alleged in the FAC to establish a “pattern of racketeering.”

A violator of § 1962(c) who commits the pattern of predicate racketeering acts must be

distinct from the enterprise whose affairs are thereby conducted. Bishop v. Corbitt Marine

Ways, Inc., 802 F.2d 122 (5th Cir. 1986). When the alleged section 1962(c) violator is a legal

entity, such as a corporation, this required separation is not established merely by showing

that the corporation, through its employees, officers, and/or directors, committed a pattern of

predicate acts in the conduct of its own business. Atkinson v. Anadarko Bank and Trust Co.,

808 F.2d 438, 440-41 (5th Cir.) (per curiam), cert. denied, 483 U.S. 1032, 107 S. Ct. 3276, 97

L. Ed. 2d 780 (1987). Plaintiffs have failed to allege the existence of an enterprise that is

separated from the conduct of the Tribe’s business and governance; rather, the FAC

demonstrates that each of their alleged RICO defendants is an employee, officer, and/or

director conducting the business of the Tribe and its departments.

f. No Income Derived from a Pattern of Racketeering

18 USC §1962(a) requires that a person receive “income derived, directly or

indirectly, from a pattern of racketeering activity.” The gravamen of § 1962(a) is not the

receipt of funds or benefits from a pattern of racketeering activity; rather, it is the investment

of such funds to acquire an interest in, establish, or operate an “enterprise.” Guerrero v.

Katzen, 571 F. Supp. 714, 721 (D. D.C. 1983).

In order to recover under section 1962(a), plaintiffs would have to show that at least

one of the defendants received income from a pattern of racketeering activity and used at least

some of it, or the proceeds of it, in acquiring, establishing or operating an enterprise engaged


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

in interstate commerce. Kirschner v. Cable/Tel Corp., 576 F. Supp. 234, 242 (E.D. Pa. 1983).

There is no such allegation in plaintiffs’ FAC. Indeed, there is not a single fact alleged in

plaintiffs’ complaint that any defendant received income from a pattern of racketeering and

used a penny of it for acquiring, establishing or operating an enterprise engaged in interstate

commerce.” Kirschner, at 242. The FAC fails to state or suggest that any income received

from disenrolling the plaintiffs, denying them benefits, or evicting them from tribally-owned

housing was used in acquiring, establishing or operating an enterprise.

g. No Injury to Business or Property

To prove injury to business or property, “plaintiffs must show proof of concrete

financial loss, and not mere injury to a valuable intangible property interest.” Chaset v.

Fleer/Skybox Int’l, LP, 300 F.3d 1083, 1086–87 (9th Cir. 2002). “Without a harm to a

specific business or property interest – a categorical inquiry typically determined by

reference to state law - there is no injury to business or property within the meaning of

RICO.” See 18 U.S.C. 1964(c); Canyon County v. Syngenta Seeds, Inc., 519 F.3d 975 (9th

Cir. 2008) (quoting Diaz v. Gates, 420 F.3d 897, 900 (9th Cir. 2005) (en banc), cert. denied,

546 U.S. 1311 (2006)). This limitation to a person “injured in his business or property” has a

“restrictive significance,” Reiter v. Sonotone Corp., 442 U.S. 330, 339, 60 L. Ed. 2d 931, 99

S. Ct. 2326 (1979), which helps to assure that RICO is not expanded to provide “a federal

cause of action and treble damages to every tort plaintiff.” Oscar v. University Students Co-

op Ass’n, 965 F.2d 783, 786 (9th Cir.) (en banc), cert. denied, 121 L. Ed. 2d 581, 113 S. Ct.

655 (1992).

Here, plaintiffs have failed to allege the concrete loss required under RICO because

they have failed to document the amount of damages to which each plaintiff claims to be


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

entitled. Fireman's Fund Ins. Co. v. Stites, 258 F.3d 1016 (9th Cir. 2001). Plaintiffs have

alleged no out-of-pocket losses, but, rather, “injury to a valuable intangible property interest”

which is not sufficient to give them standing under RICO. Diaz, 420 F.3d at 900.

h. No Conspiracy

The plaintiffs must prove: (1) that two more people agreed to violate Section 1962(c),

and (2) that the defendant knew of and agreed to the overall goal of the violation. United

States v. Philip Morris Inc., 130 F.Supp.2d 96 (D. D.C. 2001). “[W]holly conclusory

allegations of conspiracy” must be disregarded, including such assertions as that the

defendants acted “as part of a common scheme and conspiracy” or that the defendants

“agreed to the overall objective of the conspiracy.” Id. at 1293. “These are the kinds of

‘formulaic recitations’ of a conspiracy claim that the Court in Twombly and Iqbal said were

insufficient.” Id. at 1294.

Plaintiffs have not alleged any facts to render the actual existence of a conspiracy

plausible. All conspiracy allegations - ¶¶ 126 - 132 are the “formulaic recitations” and

“wholly conclusory allegations” soundly rejected under Twombly and Iqbal. American

Dental Assoc., at 1294. “To state a claim for conspiracy to violate RICO, the complaint

must allege some factual basis for the finding of a conscious agreement among the

defendants.” Sebastian Int'l, Inc. v. Russolillo, 186 F. Supp. 2d 1055, 1069 (C.D. Cal. 2000).

There is not a single fact alleged anywhere in plaintiffs’ FAC to establish that (1) that two

more people agreed to violate Section 1962(c), and (2) any defendant knew of and agreed to

the overall goal of the violation. Philip Morris, 130 F.Supp.2d 96.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26




PDX\124302\192359\CSMM\20094110.2

C. Plaintiffs’ Claims Should be Dismissed With Prejudice and Without Leave to Amend

Under any internally consistent set of facts, the scheme that plaintiffs allege is one

that is intra-tribal, undertaken in the course and scope of tribal self-governance, and allowing

plaintiffs to file a second amendment to their complaint would not cure. For that reason,

plaintiffs’ claims against defendants should be dismissed without leave to file a second

amended complaint. Albrecht v. Lund, 845 F.2d 193, 195 (9th Cir. 1988) (if “the allegation

of other facts consistent with the challenged pleading could not possibly cure the deficiency,

then . . . dismissal without leave to amend is proper.”) (internal quotation, citation omitted).

Dated this 2nd day of March, 2017.

SCHWABE, WILLIAMSON & WYATT, P.C.

By: /s/ Connie Sue Martin Connie Sue Martin, WSBA #26525 Email: [email protected] Christopher H. Howard, WSBA #11074 Email: [email protected] 1420 5th Avenue, Suite 3400 Seattle, WA 98101-4010 Attorneys for Defendants Robert Kelly, Jr., Rick D. George, Agripina Smith, Bob Solomon, Lona Johnson, Katherine Canete, Elizabeth King George, Katrice Romero, Donia Edwards, and Rickie Armstrong


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

CERTIFICATE OF SERVICE - 1 SCHWABE, WILLIAMSON & WYATT, P.C.

Attorneys at Law U.S. Bank Centre

1420 5th Avenue, Suite 3400 Seattle, WA 98101-4010 Telephone 206-622-1711

PDX\124302\192359\CSMM\20094110.2

CERTIFICATE OF SERVICE

The undersigned declares under penalty of perjury, under the laws of the State of

Washington, that the following is true and correct:

That on the 2nd day of March, 2017 I electronically filed the foregoing MOTION TO

DISMISS with the Clerk of the Court using the CM/ECF System which will send

notification of such filing to the following:

Gabriel S. Galanda Anthony S. Broadman Ryan D. Dreveskracht Bree R. Black Horse Galanda Broadman, PLLC P.O.Box 15146 8606 35th Avenue NE, Suite L1 Seattle, WA 98115

/s/ Connie Sue Martin Connie Sue Martin


Documents

THE HONORABLE JOHN C. COUGHENOUR · case no. 2:17-cv-00088-jcc schwabe, williamson & wyatt, p.c. attorneys at law 1420 5th avenue, suite 3400 seattle, wa 98101-4010 telephone: 206.622.1711