Agamenv, LLC v. Laverdure

Citations: 866 F. Supp. 2d 1091; 2012 U.S. Dist. LEXIS 80223; 2012 WL 2090367Docket: No. 4:12-cv-074

Court: District Court, D. North Dakota; June 11, 2012; Federal District Court

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The court denied the Plaintiffs' Emergency Motion for Temporary Restraining Order and Preliminary Injunction, filed on June 8, 2012. The case stems from a resolution by the Turtle Mountain Band of Chippewa Indians' Tribal Council on December 21, 2011, initiating a casino project in Trenton and entering a development agreement with AGAMENV. Following this, AGAMENV signed a Gaming Equipment Participation Agreement and Loan Agreement on February 22, 2012, for the Painted Pony Casino's construction and operation. However, on April 30, 2012, Lorraine Laverdure, a Gaming Investigator for the Tribe, informed Ray Brown of AGAMENV that their application to distribute gaming equipment had not been received, thus preventing business operations at the casino.

On May 2, 2012, four Tribal Council members who opposed the initial resolution filed a complaint in Turtle Mountain Tribal Court, alleging a lack of proper resolutions to verify the development agreement and the absence of required documentation from the National Indian Gaming Commission (NIGC). They claimed the defendants did not comply with the Turtle Mountain Tribal Gaming Code regarding vendor license applications and had not allowed the Tribal Gaming Commission to approve gaming expenditures or identify primary management officials.

The plaintiffs sought a temporary restraining order to prevent the defendant from acting as a developer for the Trenton property, a preliminary injunction against operational services related to the property during the case, a permanent injunction against the defendant’s involvement in the development if tribal laws were not adhered to, and additional relief as deemed appropriate by the court.

On May 10, 2012, Tribal Court Associate Judge Andrew Laverdure issued an Ex Parte Temporary Restraining Order and Preliminary Injunction prohibiting AGAMENV, LLC (Dakota Gaming, LLC), its investors Ray Brown and Steven Haynes, from acting as Developer or engaging in activities related to the Trenton property until a Show Cause Hearing could be held. The injunction also mandated compliance with the Turtle Mountain Gaming Code and prohibited attempts to open the Trenton property or provide related services. A Show Cause Hearing was scheduled for June 8, 2012.

On May 12, 2012, the Turtle Mountain Tribal Council passed a resolution by a 5-0 vote affirming their commitment to the gaming development contract with Dakota Gaming for the Painted Pony Casino project, and officially withdrew the complaint and request for preliminary injunction initiated by four individuals. The Council asserted that construction would proceed and the casino was set to open on May 18, 2012.

Subsequently, on June 7, 2012, Judge Laverdure issued an Order for Closure of the Painted Pony Casino based on a Motion for Order of Contempt filed by the petitioners, which alleged that the respondents had violated the May 10, 2012 Order by opening the casino around May 25, 2012. The Court ordered the respondents to show cause for potential civil contempt and mandated the immediate closure of the Painted Pony Casino until the matter was resolved in Turtle Mountain Tribal Court, with assistance from Bureau of Indian Affairs law enforcement for compliance.

A second show cause hearing was scheduled by Judge Laverdure for June 15, 2012. On June 8, 2012, AGAMENV, Ray Brown, and Steven Haynes filed a complaint and an 'Emergency Motion for Temporary Restraining Order and Preliminary Injunction' in federal court, alleging that Tribal Council members acted without authority, rendering the Tribal Court's jurisdiction void and Judge Laverdure's orders invalid. The plaintiffs sought to prevent Judge Laverdure from enforcing his orders and to stop the Tribal Council members from pursuing claims against them in Tribal Court. 

In evaluating the request for a temporary restraining order (TRO), the court follows Rule 65(b) of the Federal Rules of Civil Procedure, which requires an assessment of immediate and irreparable injury. The determination for a preliminary injunction involves considering four factors: 1) the threat of irreparable harm to the movant; 2) the balance of harm between the parties; 3) the likelihood of success on the merits; and 4) the public interest. The burden of proof lies with the movant to demonstrate the necessity for the TRO or preliminary injunction, as established in case law. The plaintiff must prove a significant risk of irreparable harm that cannot be compensated by monetary damages; mere possibilities of harm are insufficient for relief.

Plaintiffs claim they face irreparable harm without injunctive relief, asserting that their business's very existence is threatened. However, they have not sufficiently demonstrated this risk, as they only argue that litigation in a tribal court lacking jurisdiction would be resource-intensive. Any losses from the casino's closure are potentially compensable through damages, thus weakening their claim for irreparable harm. 

While Plaintiffs argue that a temporary restraining order (TRO) would merely restore the status quo, Judge Laverdure noted that they would indeed suffer irreparable harm due to the Gaming Participation Agreement, estimating potential financial losses from the casino's operation. However, the court finds that the record does not allow for a clear assessment of the penalties related to the casino's temporary closure, leaving this factor neutral regarding the TRO.

In evaluating the likelihood of success on the merits, the court must consider the specific circumstances without requiring a showing of greater than fifty percent likelihood of prevailing. The Eighth Circuit emphasizes the importance of this factor in considering preliminary injunctive relief. Plaintiffs contend that the tribal court lacks jurisdiction, asserting that exhausting tribal remedies is unnecessary. However, established legal principles dictate that such remedies must be exhausted before federal courts may intervene in cases involving tribal activities on reservation land.

Exhaustion of tribal remedies requires that tribal appellate courts review decisions made by lower tribal courts before outside intervention. This doctrine promotes self-governance and self-determination for tribes and is mandatory in cases that align with this policy. While tribal courts face significant federal limitations in criminal jurisdiction, they possess broader civil jurisdiction, particularly over nonmembers under specific conditions. Absent federal authorization, tribes typically have limited authority over nonmembers, unless the conduct directly affects the tribe's political integrity, economic security, health, or welfare, or involves consensual relationships with the tribe or its members. The current dispute involves agreements with the Turtle Mountain Tribal Council for casino operations, implicating both exceptions outlined by the Montana decision. Questions regarding compliance with tribal law are best resolved initially in tribal courts, and external judicial involvement is discouraged at this stage.

The Court finds that the Plaintiffs have not demonstrated a likelihood of success on the merits, which is a critical factor against granting a temporary restraining order (TRO). The public interest is involved in the operation of the Painted Pony Casino, including its employment and revenue generation, as well as ensuring compliance with the tribal constitution and gaming code. However, the Court is unable to assess the potential costs and benefits of temporarily closing the casino, rendering this factor neutral regarding the TRO. Ultimately, after reviewing the case and the relevant factors, the Court concludes that the Plaintiffs have not established the need for a TRO at this early litigation stage. The Court also notes that a temporary restraining order from the Turtle Mountain Tribal Court had been issued on May 10, 2012, requiring the Plaintiffs to cease their involvement with the casino until a hearing on June 8, 2012. The Plaintiffs only sought federal relief on the same day as the show cause hearing, indicating a prolonged dispute among the involved parties. The Court declines to intervene in this tribal matter at short notice and denies the motion for a TRO, also highlighting the unusual filing of a motion to withdraw the complaint by a non-party in Tribal Court and noting the absence of required affidavits or verified complaints per Federal Rule 65(b).