UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF OREGON BACKGROUND

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1 DISTRICT OF OREGON F I L E D April 02, 2015 Clerk, U.S. Bankruptcy Court Below is an Order of the Court. UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF OREGON FRANK R. ALLEY U.S. Bankruptcy Judge In re Curtis Vale Womelsdorf & LaVonne Mae Womelsdorf, Debtors. Case No fra7 ORDER DENYING EMERGENCY MOTION TO VACATE ORDER FOR FED. R. BANKR. PROC EXAMINATION (Seven Feathers Casino Resort) BACKGROUND 1. On March 3, 2015, this Court issued an ex parte Order For FRBP 2004 Examination that required Seven Feathers Casino Resort ( Casino ), produce various documents and records to the Trustee on or before March 20, 2015, or on another date agreed to by the Casino and the Trustee ( March 3, 2015 ex parte Order ). 2. On March 13, 2015, the Umpqua Indian Development Corporation (the Corporation ) specially appeared and moved to vacate the Court s March 3, 2015 ex parte Order, challenging the Court s jurisdiction. Pending the Corporation s motion, the Court suspended all discovery activities contemplated by that ex parte Order, on (Seven Feathers Casino Resort)- 1

2 March 17, In its Emergency Motion to Vacate Order for Fed. R. Bankr. Proc Examination, the Corporation argued in chief that (1) the Corporation s tribal sovereign immunity was a bar to the Court s subject matter jurisdiction, (2) Seven Feathers Casino Resort is a trade name of the Corporation and thus not the real party in interest to the March 3, 2015 ex parte Order, and (3) the Trustee s ineffective service of process of that order, as a matter of the codified laws of the Cow Creek Band of Umpqua Tribe of Indians, precluded the Court s personal jurisdiction. 4. The Trustee, meanwhile, argued in chief that the waiver of sovereign immunity in 11 U.S.C. 106(a) of the Federal Bankruptcy Code, as applied to Indian tribes by the Ninth Circuit Court of Appeals in Krystal Energy Company v. Navajo Nation, 357 F.3d 1055 (9 th Cir. 2004), was controlling and vested jurisdiction with the Court. 5. On March 24, 2015, with the matter having been fully briefed, the Court heard arguments on the Corporation s motion to vacate, and made the following: FINDINGS OF FACT 1. The Corporation is a federal corporation wholly owned by the Cow Creek Band of Umpqua Tribe of Indians, and chartered pursuant to Section 17 of the Indian Reorganization Act of 1934 (IRA), 25 U.S.C. 477 ( Section 17 ). 2. The Corporation is the real party in interest to the Court s March 3, 2015 ex parte Order. 3. On March 4, 2015, the Trustee attempted to serve process of that Order on the Casino via U.S. Mail to the attention of various offices or agents of the Casino. (Seven Feathers Casino Resort)- 2

3 CONCLUSIONS OF LAW 1. The Court has subject matter jurisdiction over the matter at bar pursuant to Title 11 of the United States Code. 2. Regarding the issue of tribal sovereign immunity, the waiver of which can be neither inferred nor implied, the holding in Krystal Energy controls: Sovereign immunity is waived as to governmental units, including Indian tribes, pursuant to Section 106(a) of the Bankruptcy Code. That waiver of tribal sovereign immunity extends to Fed. R. Bankr. Proc via Section 106(a)(3), specifically. 3. The more difficult question is whether, notwithstanding the fact that an Indian tribe s immunity is waived pursuant to Section 106(a), a separate, federal Section 17 corporation, wholly owned by a tribe, falls beyond the ambit of Krystal Energy such that the corporation s immunity withstands that decision. The Court concludes that if a tribe s immunity attaches to such a corporation, then an immunity waiver attributable to the tribe s governmental unit status is also effective as to that corporation. Here, the governmental unit waiver in Section 106(a) extends to the Corporation. 4. The Trustee s service of the March 3, 2015 ex parte Order on the Casino was not effective service on the Corporation. ORDER The Corporation s motion to vacate is DENIED. Notwithstanding, the Trustee must serve process of the Court s March 3, 2015 ex parte Order issued against the Casino, by (1) mailing that prior Order to the chief executive officer of the Corporation, and (2) (Seven Feathers Casino Resort)- 3

4 accomplishing service of process as required by Section 3-220(a) of the Cow Creek Band of Umpqua Tribe of Indians Tribal Legal Code. # # # Certification of Counsel on Following Page Presented by: GALANDA BROADMAN, PLLC s/gabriel S. Galanda Anthony S. Broadman, OSB # Gabriel S. Galanda, WSBA #30331, Pro Hac Vice Attorneys for Umpqua Indian Development Corporation d/b/a Seven Feathers Casino Resort Fax: (206) anthony@galandabroadman.com gabe@galandabroadman.com (Seven Feathers Casino Resort)- 4

5 Pursuant to LBR (a)(3), this order has been lodged after circulation to opposing counsel, who confirmed no objection to lodging the Corporation s proposed form of order. By: /s/gabriel S. Galanda Gabriel S. Galanda, WSBA #30331 Pro Hac Vice Attorneys for Umpqua Indian Development Corporation d/b/a Seven Feathers Casino Resort cc: ECF Recipients and to the following parties requesting special notice by U.S. Mail: Terry Hanscom Oregon Land and Wildlife LLC 1245 Casino Rd Medford, OR ODR Bkcy 955 Center St NE Salem OR Ronald C. Becker on behalf of Plaintiff US Trustee, Eugene 405 E 8 th Ave #1100 Eugene OR Ellie George 1575 E. McAndrews Rd #200 Medford OR Krista Lacis 4088 Hampshire Ln Eugene, OR Gary Rhinehart, MBA, LTC Jackson County Accounting & Tax Svc Inc W Main St Medford OR Rob Cockburn Moss Adams LLP 221 Stewart Ave #301 Medford OR (Seven Feathers Casino Resort)- 5