Case 3:18-cv WHO Document 6 Filed 05/14/18 Page 1 of 33

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1 Case :-cv-0-who Document Filed 0// Page of Padraic I. McCoy Rudy Verner, Pro Hac Vice application pending Berg Hill Greenleaf Ruscitti LLP 0 Maxella Ave., Unit 0 Marina Del Rey, CA 0 p. (0- f. (0-0 pmc@bhgrlaw.com Attorneys for Tribal Defendants 0 0 JW GAMING DEVELOPMENT, LLC., a California limited liability company, v. Plaintiff, UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ANGELA JAMES; LEONA L. WILLIAMS; MICHAEL R. CANALES; MELISSA M. CANALES; JOHN TANG; PINOLEVILLE POMO NATION, a federally-recognized Indian tribe; PINOLEVILLE GAMING AUTHORITY; PINOLEVILLE GAMING COMMISSION; PINOLEVILLE BUSINESS BOARD; PINOLEVILLE ECONOMIC DEVELOPMENT, LLC; a California limited liability company; LENORA STEELE; KATHY STALLWORTH; MICHELLE CAMPBELL; JULIAN J. MALDONADO; DONALD WILLIAMS; VERONICA TIMBERLAKE; CASSANDRA STEELE; JASON EDWARD RUNNING BEAR STEELE; ANDREW STEVENSON; CANALES GROUP, LLC, a California limited liability company; LORI J. CANALES; KELLY L. CANALES; and DOES through 0, Defendants. Case No.: :-cv-0 TRIBAL DEFENDANTS MOTION TO DISMISS HEARING DATE: June, 0 TIME: 0:00 am LOCATION: Federal Courthouse, 0 Boeing Ave., McKinleyville, CA ACTION REMOVED: May, 0

2 Case :-cv-0-who Document Filed 0// Page of 0 0 Notice. TO: This Honorable Court, Plaintiff JW Gaming Development, LLC, and Gregory M. Narvaez, John M. Peebles, and Tim Hennessy, of Fredericks Peebles & Morgan LLP; Manuel Ramirez, counsel to Defendants Michael Canales, Melissa Canales, Kelly Canales, Canales Group, LLC, and Lori Canales; and Douglas Losak, counsel to Defendant John Tang: PLEASE TAKE NOTICE that on June, 0 at 0:00 am in the of the above entitled court, located at the McKinleyville Federal Courthouse, 0 Boeing Ave., McKinleyville, CA. Defendants, the Pinoleville Pomo Nation, a federally-recognized Indian tribe (the Tribe, Pinoleville Gaming Authority, Pinoleville Gaming Commission, Pinoleville Business Board, and Pinoleville Economic Development, LLC (the Tribal Entity Defendants, and the employees and officers of the Tribe and its Tribal arms and entities also named as Defendants in this lawsuit, including Angela James, Leona L. Williams, Lenora Steele, Kathy Stallworth, Michelle Campbell, Julian J. Maldonado, Donald Williams, Veronica Timberlake, Cassandra Steele, Jason Edward Running Bear Steele, and Andrew Stevenson, by and through their counsel, (the Tribal Defendants will appear in a special and limited capacity to move this court to dismiss and hereby does move to dismiss causes of action - in the complaint without leave to amend pursuant to F.R.C.P. (b( and ( for lack of jurisdiction and failure to state a claim. The Tribal Entity Defendants further move this Court for an order dismissing them from First Cause of Action pursuant to F.R.C.P. (b( and (. Relief Requested. Tribal Defendants request this Court dismiss causes of action - of the Complaint without leave to amend, and as a result dismiss all named individual Tribal Defendants, Angela James, Leona L. Williams, Lenora Steele, Kathy Stallworth, Michelle Campbell, Julian J. Maldonado, Donald Williams, Veronica Timberlake, Cassandra Steele, Jason Edward Running Bear Steele, and Andrew Stevenson. Further, the Tribal Entity Defendants, Pinoleville Gaming Authority, Pinoleville Gaming Commission, Pinoleville Business Board, and Pinoleville Economic Development, LLC, request dismissal from the First Claim for Relief, as that claim is only properly brought against the Tribe.

3 Case :-cv-0-who Document Filed 0// Page of 0 0 TABLE OF CONTENTS I. INTRODUCTION STATEMENT OF ISSUES TO BE DECIDED... II. STANDARDS FOR DISMISSAL... A. Dismissal Under Rule (b(.... B. Dismissal Under Rule (b(... III. STATEMENT OF FACTS... A. Facts Relevant to Jurisdictional Arguments..... The Tribal Defendants Were Acting in Their Official Capacities.... Intra-Tribal Dispute... B. Facts Relevant to Rule (b( Arguments... IV. ARGUMENT... A. The RICO and Fraud Claims Must Be Dismissed For Lack of Subject Matter Jurisdiction.... Sovereign Immunity Bars Plaintiff s RICO and Fraud Claims Against the Tribal Defendants.... JW Gaming Lacks Standing to Sue Because JW Gaming Cannot Show that the Alleged RICO Violations Proximately Caused Its Injury.... The Court Lacks Jurisdiction to Adjudicate this Intra-Tribal Dispute... B. The RICO Claims and the Fraud Claim Must Be Dismissed For Failure to State a Claim..... Plaintiff Fails to Allege Fraud With Particularity.... Plaintiff Fails to Establish the Elements of a RICO Claim... a. Plaintiff fails to allege a pattern of racketeering activity... 0 b. Plaintiff fails to adequately allege RICO predicate acts... i. Failure to allege wire fraud... ii. Failure to allege bank fraud... iii. Failure to allege money laundering... C. The Tribal Entity Defendants Must Be Dismissed from the Suit... V. CONCLUSION... i

4 Case :-cv-0-who Document Filed 0// Page of 0 0 Cases TABLE OF AUTHORITIES Ambrosia Coal & Constr. Co. v. Pages Morales, F.d 0 (th Cir Americopters, LLC v. F.A.A., F.d (th Cir Anza v. Ideal Steel Supply Corp., U.S. (00..., Apache Tribe of Oklahoma v. Brown, F. Supp. d (W.D. Okla Ashcroft v. Iqbal, U.S. (00...,, Bell Atlantic Corp. v. Twombly, 0 U.S. (00..., Best Deals on TV, Inc. v. Naveed, No. C 0 0 SBA, 00 WL (N.D. Cal. Sept., Birdnecklace v. Steele, 00 WL 0 (D.S.D. Apr., Bodi v. Shingle Springs Band of Miwok Indians, F.d 0 (th Cir. 0..., Bressner v. Ambroziak, F.d (th Cir Canyon Cty. v. Syngenta Seeds, Inc., F.d (th Cir ,, Carpenter v. United States, U.S. (... Chapman v. Pier Imports (U.S. Inc., F.d (th Cir Cook v. AVI Casino Enterprises, Inc., F.d (th Cir Edmonds v. Seavey, No. 0 Civ. (HB, 00 WL (S.D.N.Y. Sept., Edwards v. Marin Park, Inc., F.d 0 (th Cir ii

5 Case :-cv-0-who Document Filed 0// Page of 0 0 Figueroa Ruiz v. Alegria, F.d (st Cir.0... Fleming v. Pickard, F.d (th Cir Forsyth v. Humana, Inc., F.d (th Cir.... Gemtel Corp. v. Community Redevelopment Agency, F.d (th Cir.... H.J. Inc. v. Northwestern Bell Telephone Co., U.S. (... 0, Holmes v. Sec. Investor Prot. Corp., 0 U.S. (... Imperial Granite Co. v. Pala Band of Indians, 0 F.d (th Cir.... In re: Sac & Fox Tribe of the Miss. In Iowa/Meskwaki Casino Litig., 0 F.d (th Cir , Jarvis v. Regan, F.d (th Cir Katzman v. Victoria's Secret Catalogue, F.R.D. (S.D.N.Y.... Kiowa Tribe of Oklahoma v. Mfg. Techs., Inc., U.S. (... Kokkonen v. Guardian Life Ins. Co. of America, U.S. (... Lancaster Community Hospital v. Antelope Valley Hospital District, 0 F.d (th Cir...., Lewis v. Clarke, S.Ct. (0... Lipsman v. Sec'y of the Army, F Supp. d (D. D.C Mendoza v. Zirkle Fruit Co., 0 F.d (th Cir Miccosukee Tribe of Indians of Florida v. Cypress, F. Supp. d (S.D. Fla. 0..., iii

6 Case :-cv-0-who Document Filed 0// Page of 0 0 Moore v. Kayport Package Exp., Inc., F.d (th Cir.... Odom v. Microsoft Corp., F.d (th Cir Perkumpulan Investor Crisis Ctr. Dressel-WBG v. Regal Fin. Bancorp, Inc., F. Supp. d 0 (W.D. Wash Platten v. HG Bermuda Exempted Limited, F.d (st Cir Runs After v. United States, F.d (th Cir.... Santa Clara Pueblo v. Martinez, U.S. (..., Sever v. Alaska Pulp Co., F.d (th Cir Smith v. Babbitt, F. Supp. (D. Minn...., Snowbird Constr. Co., Inc. v. United States, F. Supp. (D. Idaho... Spokeo, Inc. v. Robins, S. Ct. 0 (0... Starfish Inv. Corp. v. Hansen, 0 F.Supp.d (N.D. Ill Swartz v. KPMG LLP, F.d (th Cir United Bhd. of Carpenters & Joiners of Am. v. Bldg. & Const. Trades Dep't, AFL-CIO, 0 F.d (th Cir United States v. Jacobs, F.d (d Cir.... United States v. Marconi, F. Supp. (C.D. Cal.... United States v. Oregon, F.d 00 (th Cir United States v. Rogers, F.d (th Cir iv

7 Case :-cv-0-who Document Filed 0// Page of 0 0 Vasquez v. L.A. County, F.d (th Cir Vess v. Ciba-Geigy Corp. USA, F.d 0 (th Cir Wasco Products, Inc. v. Southwall Technologies, Inc., F.d (th Cir White v. U. of California, F.d 00 (th Cir.0... Williams v. Gover, 0 F.d (th Cir Federal Rules of Civil Procedure F.R.C.P.... passim F.R.C.P.... passim Federal Statutes U.S.C.... U.S.C....,, U.S.C.... U.S.C...., U.S.C.... 0,, U.S.C....,, U.S.C.... U.S.C U.S.C.... v

8 Case :-cv-0-who Document Filed 0// Page of 0 0 I. INTRODUCTION STATEMENT OF ISSUES TO BE DECIDED For over ten years, the Pinoleville Pomo Nation has sought to build a casino gaming facility on its tribal lands in Mendocino County. Once it is built, revenue from the casino will help fund the operations of Pinoleville s tribal government, which provides essential services to both tribal members and non-tribal members on and around the Pinoleville Reservation. L. Williams Dec., -. Members of the current Tribal Council, including longtime Chairperson, Leona Williams, and Vice Chairperson Angela James, have spent much of their time on Tribal Council working to secure the significant capital investments needed to build and operate a tribal gaming facility. Id. -. As with many tribes, a small faction of tribal members within Pinoleville disagrees with decisions Chairperson Williams and Vice Chairperson James have made while serving on the Tribal Council. This faction, led by Nancy Williams, solicited plaintiff JW Gaming Development LLC ( JW Gaming, an out-of-state entity which possesses a run of the mill breach of contract claim against the Tribe, to serve as its proxy in its ongoing dispute with tribal leaders and to file this RICO suit for the purpose of defaming the Tribe s officers, agents and employees, interfering with the Tribe s self-governance, and attempting to force the Tribe s leadership from office. Because JW Gaming cannot overcome the sovereign immunity to which all of the tribal officers and employees are entitled under the law, this Court lacks jurisdiction over plaintiff s RICO and fraud claims. Moreover, JW Gaming has not alleged basic facts needed to show it has standing to assert such claims. This Court also lacks jurisdiction because the RICO claims are nothing more than a transparent attempt to foment an intra-tribal dispute. Accordingly, this Court must dismiss plaintiff s RICO and fraud claims against the Tribal Defendants pursuant to F.R.C.P. Exhibit, Declaration of Leona L. Williams ( L. Williams Dec. at -. Nancy Williams has a familial relationship with plaintiff s counsel of record, Greg Narvaez. L. Williams Dec. at.

9 Case :-cv-0-who Document Filed 0// Page of 0 0 (b(. Even is this were not the case, plaintiff s failure to plead its claims with the specificity required under F.R.C.P. (b, and to meet its burden to state all required elements of a RICO claim, warrants dismissal of the RICO and fraud counts pursuant to F.R.C.P. (b(. Finally, the Tribal Entity Defendants must be dismissed from this case because plaintiff has no contractual relationship with those entities and therefore cannot state a claim for relief as to them. II. STANDARDS FOR DISMISSAL A. Dismissal Under Rule (b(. Under Rule (b(, a court must dismiss claims over which it lacks subject matter jurisdiction. Chapman v. Pier Imports (U.S. Inc., F.d, (th Cir. 0. 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, U.S., (. 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., F.d, n. (th Cir. 00. 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 motion. Gemtel Corp. v. Community Redevelopment Agency, F.d, n. (th Cir.. A court resolving a motion to dismiss under Rule (b( must give the complaint s factual allegations closer scrutiny than required for a motion to dismiss pursuant to Rule (b(. Lipsman v. Sec'y of the Army, F Supp. d (D. D.C. 00. Motions to dismiss for lack of subject matter jurisdiction based on standing or the sovereign immunity of an Indian tribe are properly resolved under Rule (b(. See Bodi v.

10 Case :-cv-0-who Document Filed 0// Page 0 of 0 0 Shingle Springs Band of Miwok Indians, F.d 0, 0 (th Cir. 0 (tribe s sovereign immunity arguments were properly presented in motion pursuant to F.R.C.P. (b(. B. Dismissal Under Rule (b(. A defendant may move for dismissal when a plaintiff fails to state a claim upon which relief can be granted. To grant a motion to dismiss, the court must be able to 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, F.d, (th Cir. 00. To survive a motion to dismiss, a plaintiff must cite facts supporting a plausible cause of action. Bell Atlantic Corp. v. Twombly, 0 U.S., - (00. 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 (b( motion. Vasquez v. L.A. County, F.d, (th Cir. 00. 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. 0 U.S. at. The litigant must plead a claim that moves across the line from conceivable to plausible. Id. at 0. [W]hen plaintiffs have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed. Id. at 0. 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. U.S., (00. First, the Court may identify those statements in a complaint that are actually legal conclusions, even if presented as factual allegations. Id. at. 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 -0.

11 Case :-cv-0-who Document Filed 0// Page of 0 0 In addition, RICO claims must satisfy F.R.C.P. (b, which requires plaintiffs to state with particularity the circumstances constituting their claims. Moore v. Kayport Package Exp., Inc., F.d, (th Cir.. 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., F. Supp. d 0, 0 (W.D. Wash. 0, citing Odom v. Microsoft Corp., F.d, (th Cir. 00; see also Vess v. Ciba-Geigy Corp. USA, F.d 0, 0 (th Cir. 00 ( Averments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged.. 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., F.d 0, 0 (th Cir. 00. Where a complaint alleges that several defendants participated in a fraudulent scheme, Rule (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, F.d, - (th Cir. 00 (quotations omitted. 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, 0 F.d, 0 (th Cir.. The mere conclusory statements in the complaint that an enterprise was conducted through the 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., Inc. v. United States, F. Supp., (D. Idaho.

12 Case :-cv-0-who Document Filed 0// Page of 0 0 III. STATEMENT OF FACTS A. Facts Relevant to Jurisdictional Arguments.. The Tribal Defendants Were Acting in Their Official Capacities. As plaintiff has alleged, each of the Tribal Defendants is an officer or employee of the Pinoleville Pomo Nation (the Tribe and each of the defendants was acting in his or her official capacities when undertaking the conduct described in the complaint. Leona L. Williams is the Chairperson of the Tribe s seven-member Tribal Council. L. Williams Dec.. Angela James is the Vice Chairperson of the Tribal Council. See Exhibit, Declaration of Angela James ( James Dec. -. Jason Edward Running Bear Steele is the Treasurer of the Tribe. Compl. ; James Dec.. Cassandra Steele is the Secretary of the Tribe. Compl. ; James Dec.. Donald Williams is a Member-at-Large of the Tribal Council. Compl. ; James Dec.. Veronica Timberlake is a Member-at-Large of the Tribal Council. Compl. 0; James Dec.. Andrew Stevenson is a Member-at-Large of the Tribal Council. Compl. ; James Dec. 0. Lenora Steele was, at all times relevant to the alleged events in the Complaint, the Tribe s Self-Governance Director. Compl. ; James Dec.. Ms. Steele is also currently the Chair of the Election Committee. James Dec.. Kathy Stallworth is the Tribe s Accounting Manager. Compl. ; James Dec.. Michelle Campbell was, at all times relevant to the alleged events in the Complaint, the Tribe s Fiscal Director. Compl. 0; James Dec.. Julian Maldonado is the Tribe s Community Health Representative. James Dec.. Mr. Maldonado has held this position since October of 0. Mr. Maldonado has held other positions with the Tribe prior to becoming its Community Health Representative. Compl... Intra-Tribal Dispute. The complaint contains numerous allegations unrelated to JW Gaming s actual legal claims and requested relief. It recites allegations challenging the legitimacy of the current tribal

13 Case :-cv-0-who Document Filed 0// Page of 0 0 leadership, questioning governance decisions unrelated to the claims in the suit, alleging crimes relating to the receipt of federal and state funding, and describing familial and other relationships in an apparent attempt to question the motives and integrity of the Tribal Defendants. As one example, the complaint alleges that Vice Chairperson James and Chairperson Williams assumed control of the Tribe in 00 when they fraudulently executed a certification that the Tribe s citizens had voted on and approved the constitution under which the Tribe currently operates. Compl.. The allegations in paragraphs - of the complaint assert additional claims questioning the legitimacy of the current leadership. The genesis of these allegations lies in a falling-out among sisters and in the tribal enrollment status of plaintiff s counsel. Leona Williams has served as the Chairperson of the Tribal Council for years. See L. Williams Dec.. For much of her time on Tribal Council, her sister, Nancy Williams also served on Tribal Council. Id.. Nancy Williams began serving on Tribal Council sometime before and served in that capacity until September of 0. Id. In 0, Nancy Williams was serving as the Tribal Council Treasurer, a position she had been elected to. In the September 0 election, Nancy Williams ran for Tribal Chairperson instead of running again for Treasurer. Id. Leona Williams won the election for Tribal Chairperson in September 0 and, because of this, Nancy Williams was no longer on Tribal Council beginning in October of 0. Id. Nancy Williams has not run for a Tribal Council office in any elections subsequent to the 0 election. Id.. One of the many aspects of Tribal Governance that Leona and Nancy Williams worked on together over the years was the Enrollment Committee. Id.. The Enrollment Committee is tasked with maintaining the Tribe s official enrollment records and reviewing enrollment applications. Given Nancy Williams experience with the Enrollment Ordinance and Enrollment Committee work, she has considerable experience with the Tribe s enrollment process. Id. The attorney representing JW Gaming in this litigation, Greg Narvaez, has a long-standing

14 Case :-cv-0-who Document Filed 0// Page of 0 0 familial relationship with Nancy Williams. Id.. Although Nancy has never officially adopted Greg Narvaez, Nancy is like a mother to Greg, and served as a sometimes caretaker to Greg throughout his childhood and adolescence. Id. Nancy Williams has previously asserted that Greg Narvaez s biological mother has Native American blood. Id.. However, no documentation has ever been provided to prove that Greg Narvaez has the requisite ¼ Native blood to make him eligible as a citizen of the Pinoleville Pomo Nation, consistent with the Tribal Constitution s requirements at Art. II, Sec.. Id. Prior to JW Gaming filing this lawsuit against the Tribe, in general the Tribe had a communicative and business-like relationship with JW Gaming. Id. 0. JW Gaming s move to litigation was surprising to the Tribe. Id. Leona Williams believes the lawsuit, or at least many of the misleading and inaccurate statements in the complaint, are intended to defame her in the eyes of the Tribe and are an attempt to force her and other members of the Tribal Council from office in hopes of a political take-over. Id. B. Facts Relevant to Rule (b( Arguments. As plaintiff acknowledges, the Tribe possesses reservation lands that are eligible for casino gaming under the Indian Gaming Regulatory Act (IGRA, U.S.C. 0 et seq. Compl. 0. The Tribe designated defendant Michael Canales and his company, Canales Group LLC, as the Tribe s contact for development of the casino (the Pinoleville Casino Project. Id. 0. In 00, Michael Canales and John Tang approached the late James Winner regarding Mr. Winner s potential financial investment with the Tribe to aid in the development of the Pinoleville Casino Project. Id. 0. During the negotiations, Michael Canales and John Tang asked Mr. Winner to make an investment of $,,000, matching the investment of Michael Canales and the Canales Group with the Tribe for the Pinoleville Casino Project. Id. 0. During the negotiation process with Mr. Winner, John Tang provided him with a copy of a promissory note evidencing that Pinoleville Economic Development LLC ( PED, the entity through which the Tribe manages

15 Case :-cv-0-who Document Filed 0// Page of 0 0 the casino development, agreed to pay Canales Group $,,000 in consideration for its investments in the Pinoleville Casino Project over the prior years. Id., 0. Thereafter, Mr. Winner and the Canales Group formed a joint venture for the purpose of facilitating the development of the Pinoleville Casino Project. Id.,,. Pursuant to that agreement, Mr. Winner s company, JW Gaming, made a total investment of $,0,000 in the Pinoleville Casino Project (the Loan. Id.. Near the conclusion of the funding of the Loan, termed the Interim Tribal Loan, the Tribe had not yet completed the Pinoleville Casino Project. Id. 0,. In 0, the Tribe sent to the Canales-Winner joint venture company a 0- day notice of default for failure to perform, and requested that it demonstrate an ability to provide permanent financing for the project. Id. 0-. In February 0, the parties agreed to dissolve the joint venture and each take a promissory note with the Tribe in the amount of their contributions. Id.. In July 0, JW Gaming and the Tribe entered into a promissory note whereby the Tribe agreed to repay JW Gaming the principal amount of $,0,000 plus interest (the Note. Id.. The Note limits recourse for its breach to revenues derived from the future gaming operations at the Pinoleville Casino Project. Id. 0-. The Note had a maturity date of July 0, 0 in the event the Tribe failed to open a casino or other gaming facility before that date. Id.. On the same date of the Note, the Tribe entered a promissory note with the Canales Group for the principal balance of $,,000 in settlement of all debts owed to Canales Group LLC for its investments in the Pinoleville Casino Project. Id. -. Following execution of the Note, the Tribe continued to pursue development of the Pinoleville Casino Project. Id.. However, the Tribe was unable to secure a development partner to provide project financing. Id.. The Tribe has not yet re-paid the Note. Id.. IV. ARGUMENT JW Gaming alleges that the conduct of the Tribal Defendants during the course of the

16 Case :-cv-0-who Document Filed 0// Page of 0 0 Tribe s investor relationship with JW Gaming constitutes a pattern of racketeering activity that affects interstate commerce and, further, that in the course of this relationship, the Tribal Defendants engaged in mail fraud, bank fraud and money laundering in violation of the federal Racketeer Influenced and Corrupt Organizations Act ( RICO, U.S.C. (c. JW Gaming alleges that such conduct entitles it to treble damages under RICO in excess of $ million dollars. As demonstrated below, this Court lacks subject matter jurisdiction over the RICO and fraud claims, and therefore those claims must be dismissed as to the Tribal Defendants pursuant to F.R.C.P. (b(. Alternatively, the RICO and fraud claims should be dismissed pursuant to F.R.C.P. (b( for failure to state a claim. A. The RICO and Fraud Claims Must Be Dismissed For Lack of Subject Matter Jurisdiction. The Note in favor of JW Gaming contains a purported waiver of tribal sovereign immunity for disputes related solely to that contractual agreement. Compl. -. JW Gaming alleges the provision waives any and all immunity of each and every of the Defendants sued in this lawsuit, including the Tribal Defendants. Id.. This is incorrect as a matter of law. Because sovereign immunity extends to officers and employees of a tribe acting within the scope of their authority, and the Tribal Defendants were acting in their official capacities at all times relevant to this case, the RICO and fraud claims against the Tribal Defendants must be dismissed for lack of subject matter jurisdiction.. Sovereign Immunity Bars Plaintiff s RICO and Fraud Claims Against the Tribal Defendants. In the context of lawsuits against governmental employees or entities, courts should look to whether the sovereign is the real party in interest to determine whether sovereign immunity bars the suit. Lewis v. Clarke, S.Ct., 0- (0. In making this assessment, courts may not simply rely on the characterization of the parties in the complaint, but rather must determine in the first instance whether the remedy sought is truly against the sovereign. Id.

17 Case :-cv-0-who Document Filed 0// Page of 0 0 Similarly, lawsuits brought against employees in their official capacity represent only another way of pleading an action against an entity of which an officer is an agent, and they may also be barred by sovereign immunity. Id. 0- (citation omitted. These rules apply in the context of tribal sovereign immunity, as well as state and federal sovereign immunity. Id. at ( There is no reason to depart from these general rules in the context of tribal sovereign immunity. In addition, sovereign immunity extends to tribal officials when they act in their official capacity and within the scope of their authority. United States v. Oregon, F.d 00, 0, fn. ( th Cir.. Notwithstanding JW Gaming s effort to sue the Tribal Defendants in their personal capacities, the primary and obvious focus of its complaint is recovery under a contractual agreement with the Tribe. The complaint alleges JW Gaming is entitled to recover $. million for breach of the Note. It does not allege any independent damages due to the conduct of the individual Tribal Defendants. As such, the Tribe is the real party in interest here, not the individual Tribal Defendants, and this Court lacks subject matter jurisdiction over the fraud and RICO claims asserted against those defendants due to the operation of sovereign immunity. See Cook v. AVI Casino Enterprises, Inc., F.d, (th Cir. 00 ( In these cases the sovereign entity is the real, substantial party in interest and is entitled to invoke its sovereign immunity from suit even though individual officials are nominal defendants. (internal quotations omitted. Second, the complaint expressly concedes that each of the Tribal Defendants was acting within the scope of his or her authority when undertaking the alleged wrongful acts. Tellingly, the complaint names all officers of the Tribal Council as defendants. It alleges [e]ach of the Tribal Council defendants actively participates in the management and direction of the association-in-fact enterprise. Compl. 0. It further alleges those defendants were instrumental to the RICO enterprise because they vote[d] on and approve[d] resolutions they knew, or reasonably should 0

18 Case :-cv-0-who Document Filed 0// Page of 0 0 have known, would be used by Chairperson Williams and Vice Chairperson James to perpetrate frauds against third parties such as JW Gaming. Compl.. As an example, the complaint alleges the Tribal Council Defendants voted to create the Business Board which they then voted to charge with authority to create bank accounts and make expenditures of proceeds of the Company Loan[.] Id.. Voting on and approving tribal resolutions is the very definition of action taken within an official capacity. See Imperial Granite Co. v. Pala Band of Indians, 0 F.d, ( th Cir. (claims 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. The complaint also confirms the non-tribal Council defendants were acting in a representative capacity and within the scope of their authority. For instance, it alleges that Michelle Campbell and Kathy Stallworth, fiscal directors of the Tribe, had a prominent role in the creation of the allegedly misleading 0 accounting the Tribe prepared at the request of JW Gaming. Compl.. As the Tribe s accountants, preparing an accounting clearly falls within the scope of their authority. Lenora Steele, the Tribe s chief administrator and supervisor of the Tribe s accounting staff, is alleged to have had significant involvement with the 0 accounting. Compl.. This falls within the scope of her authority, too. Finally, the complaint alleges the Non-Governmental Defendants also participate in the RICO enterprise through their prominent roles on subordinate Tribal entities such as the Gaming Commission, Gaming Authority, Business Board, and PED. Compl.. As arms of the Tribe s government, these boards and commissions share the Tribe s sovereign immunity. See White v. U. of California, F.d 00, 0 (th Cir. 0. Because the Tribe is the real party in interest here and the Tribal Defendants were admittedly acting within the scope of their authority in undertaking the alleged wrongful acts, sovereign immunity bars assertion of the RICO and fraud claims in this suit. Those claims must be

19 Case :-cv-0-who Document Filed 0// Page of 0 0 dismissed for lack of subject matter jurisdiction. Kiowa Tribe of Oklahoma v. Mfg. Techs., Inc., U.S., ( ( As a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity... JW Gaming Lacks Standing to Sue Because JW Gaming Cannot Show that the Alleged RICO Violations Proximately Caused Its Injury. Under RICO s civil enforcement mechanism, [a]ny person injured in his business or property by reason of a violation of [ U.S.C. ] may sue therefor in any appropriate United States district court. U.S.C. (c. To have standing under (c, a civil RICO plaintiff must show: ( that his alleged harm qualifies as injury to his business or property; and ( that his harm was by reason of the RICO violation, which requires the plaintiff to establish proximate causation. Canyon Cty. v. Syngenta Seeds, Inc., F.d, (th Cir. 00 (citing Holmes v. Sec. Investor Prot. Corp., 0 U.S., (. The burden is on the plaintiff to allege sufficient facts to establish standing. Spokeo, Inc. v. Robins, S. Ct. 0, (0. Here, even assuming JW Gaming has adequately alleged injury to its business or property, its RICO claims must be dismissed because it cannot show the alleged violations of federal law were the proximate cause of its injury. A showing that the defendant violated, the plaintiff was injured, and the defendant s violation was a but for cause of plaintiff s injury is insufficient to meet the requirement in (c that the plaintiff s injury be by reason of the RICO violation. Holmes, 0 U.S. at. Rather, a plaintiff must also show that the defendant s RICO violation proximately caused her injury. Id. at. Proximate causation requires some direct relation between the injury asserted and the injurious conduct alleged. Id. In Anza v. Ideal Steel Supply Corp., U.S., (00, the Supreme Court clarified that the proximate cause requirement articulated in Holmes precludes recovery by plaintiffs whose

20 Case :-cv-0-who Document Filed 0// Page 0 of 0 0 injuries are only tenuously related to the RICO violation at issue. Under Anza, courts must scrutinize the causal link between the RICO violation and the injury, identifying with precision both the nature of the violation and the cause of the injury to the plaintiff. See id. at. Where the violation is not itself the immediate cause of the plaintiff s injury, proximate cause may be lacking. In Anza, Ideal Steel Supply Company sued its competitor, alleging that the competitor had violated RICO by conducting its business through a pattern of defrauding the State of New York of sales tax payments. Id. at. According to Ideal, the defendant was able to undersell Ideal by not charging sales tax on cash purchases, and thus deprived Ideal of sales it otherwise would have made. Id. at,. Rejecting Ideal s argument, the Court concluded that the competitor s alleged violations could not have proximately caused Ideal s injuries, because [t]he cause of Ideal s asserted harms... is a set of actions (offering lower prices entirely distinct from the alleged RICO violation (defrauding the State. Id. at. Under Anza, this Court must determine whether JW Gaming meets the proximate cause requirement by examining whether the alleged violation led directly to the plaintiff s injuries. Canyon Cty., F.d at. According to the complaint, the alleged RICO violations consisted of sending or receiving s, or being copied on s, that transmitted the Canales Note for the purpose of inducing JW Gaming to make the Loan to the Tribe or to enter into the Note. Compl. - (wire fraud. The complaint also alleges the Tribe made false representations with the intent to defraud JW Gaming s bank, id. -00 (bank fraud, and engaged in transactions involving criminally derived property. Id. 0- (money laundering. This was all part of a scheme, the complaint continues, to convert funds obtained from third party sources to the personal use of the Tribal Defendants. Id.,,,. Despite these allegations of fraud and criminal conduct, however, the only harm the complaint alleges that JW Gaming has suffered in this case arises from the Tribe s failure to pay on

21 Case :-cv-0-who Document Filed 0// Page of 0 0 the Note. Id., -,, 0,, Prayer for Relief. The complaint exclusively refers to the contract damage figure of $,0,000, nothing else. It even reveals the real reason the Tribe failed to repay this amount. According to the complaint, it was the Tribe s inability to secure permanent financing and open the Pinoleville Casino Project, (id. -, -, not because of some conversion of Loan proceeds to personal use. This is the fatal flaw in plaintiff s RICO claims, and indeed in its case as a whole. JW Gaming s injuries were not caused by criminal racketeering activity, but from the Tribe s alleged breach of the Note. As such, the direct relationship between the injury and the alleged RICO violations necessary to establish proximate cause is lacking. In Platten v. HG Bermuda Exempted Limited, F.d ( st Cir. 00, the First Circuit reached a similar conclusion in a RICO action arising from breach of contract. There, the plaintiffs, former employees of HG Bermuda Exempted Limited ( HG Limited, alleged that HG Limited committed breach of contract and violated RICO when it failed to pay termination distributions upon their departure from the company. Plaintiffs alleged that, through the use of the mails and through wire fraud, HG Limited fraudulently induced them to enter into the agreement that provided for such distributions and intentionally misrepresented the meaning of the agreement s terms. In affirming the district court s denial of leave to amend to add the RICO claims, the First Circuit held that plaintiffs RICO claims would have failed because plaintiffs never alleged proximate cause between defendants wrongful conduct and plaintiffs injuries. Id. at. Even Indeed, the complaint contains only conclusory and unsupported allegations on this point. E.g., Compl., 0. The only allegation specifically pertaining to a transfer of Loan proceeds asserts that the recipient of the Loan, the Gaming Commission, transferred $00,000 of the Loan proceeds to PED. Id. -. And it alleges Leona Williams and Angela James are members of PED. These allegations are insufficient to meet the plausibility test of Twombly and Iqbal, or the heightened pleading standard of FRCP (b, to substantiate that the proceeds were converted to personal use. As such, the Court need not accept them as true.

22 Case :-cv-0-who Document Filed 0// Page of 0 0 if defendants could be held responsible for misrepresentations by mail or wire, the court stated, [the plaintiffs ] injuries, if proven, come not from those misrepresentations, but from HG Limited s alleged breach of the Agreement by failing to pay the three men their termination distributions. Id. Similarly, here, even if the Tribal Defendants could be shown to have committed the predicate acts of wire fraud, bank fraud and money laundering, JW Gaming s injuries do not arise from those acts, but rather from the Tribe s failure to pay the Note when it allegedly became due. Accordingly, plaintiff cannot show that the predicate acts under RICO were the proximate cause of its claimed damages, which it must do to establish standing. See Canyon Cty., F.d at (affirming dismissal of RICO claims based on failure to adequately allege proximate causation; see also Birdnecklace v. Steele, 00 WL 0, at * (D.S.D. Apr., 00 (dismissing plaintiff s RICO claims for failure to show sufficient connection between predicate acts and alleged damages.. The Court Lacks Jurisdiction to Adjudicate this Intra-Tribal Dispute. Further, the Court should dismiss the RICO and fraud claims for lack of jurisdiction because they originate in an intra-tribal dispute regarding the tribal leadership s authority to govern, its policies and business decisions, and the enrollment status of plaintiff s counsel of record, Greg Narvaez. An intra-tribal dispute is one that affects matters of tribal self-government and sovereignty. Santa Clara Pueblo v. Martinez, U.S.,, n. (. 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 v. Babbitt, F. Supp., (D. Minn., judgment aff'd, appeal dismissed in part, 00 F.d (th Cir. (citing cases; Runs After v. United States, F.d, (th Cir. (federal courts do not have jurisdiction to interpret tribal constitutions or tribal laws. The Tribe s right to determine who is, and is not, a

23 Case :-cv-0-who Document Filed 0// Page of 0 0 member, is immune from review by a federal court. Santa Clara Pueblo, U.S. at n.; Williams v. Gover, 0 F.d, 0 (th Cir. 00 ( Under Santa Clara Pueblo, Mooretown Rancheria had the power to squeeze the plaintiffs out, because it has the power to define its own membership.. The issue driving this case is a factional dispute regarding internal business and governance decisions made by the Tribe s current leaders. The plaintiff, JW Gaming, serves as a proxy in this fight. It was solicited to file this action and assert not just a breach of contract claim regarding payment under the Note, but claims which sound in fraud and which carry the potential for a massive punitive damage award. Given the patent deficiencies of the RICO and fraud claims, and the allegations of tribal discord interspersed throughout the complaint, these claims must be regarded as nothing more than disagreement with the tribal leadership s exercise of their power. See Miccosukee Tribe of Indians of Florida v. Cypress, F. Supp. d, 0 (S.D. Fla. 0, aff d, F.d 0 (th Cir. 0 ( the Miccosukee Tribe is attempt[ing] to move this dispute, over which this court would not otherwise have jurisdiction, into federal court, because at its core, this is a dispute involving the Miccosukee Tribe and the alleged abuse of power granted to its former chairman under its tribal constitution. The Miccosukee Tribe is bootstrapping what is discontent with the prior leadership onto alleged federal claims that are better resolved in another venue.. The fact that counsel bringing this suit on behalf of JW Gaming has been personally impacted by the Tribe s policies is indicative of the suit s real motive. See L. Williams Dec. 0. If there were any question about motive, Plaintiff s fifth Prayer for Relief confirms that the purpose of this lawsuit is to leverage a political takeover of the Tribe. See Compl., Prayer for Relief (requesting [t]he appointment of a receiver over all business and affairs of the Tribal Organizational Defendants.. As such, the Court should rule that it lacks subject matter jurisdiction and dismiss the RICO and fraud claims under F.R.C.P. (b(. See In re: Sac & Fox Tribe of the Miss. In

24 Case :-cv-0-who Document Filed 0// Page of 0 0 Iowa/Meskwaki Casino Litig., 0 F.d (th Cir. 00 (dismissing for lack of subject matter jurisdiction a RICO claim centering on a dispute concerning the authority of a tribal council to act on behalf of the tribe; see also Smith, 00 F.d at (dismissing intra-tribal dispute for lack of subject matter jurisdiction and holding that [f]ederal court jurisdiction does not reach this matter simply because the plaintiffs carefully worded their complaint. B. The RICO Claims and the Fraud Claim Must Be Dismissed For Failure to State a Claim. Even if this Court determines it possesses subject matter jurisdiction over the RICO claims, it must still dismiss the RICO claims, and, additionally, the fraud claim, because plaintiff fails to meet the heightened pleading standard for claims sounding in fraud, and fails to allege the necessary elements of a RICO cause of action.. Plaintiff Fails to Allege Fraud With Particularity. The RICO claims must be dismissed for failure to satisfy the heightened pleading requirement of F.R.C.P. (b. Rule (b applies to all claims that sound in fraud, which includes claims arising under RICO. Lancaster Community Hospital v. Antelope Valley Hospital District, 0 F.d, 0 (th Cir.. The heightened requirement also applies to claims of conspiracy to defraud. Wasco Products, Inc. v. Southwall Technologies, Inc., F.d, (th Cir. 00. As such, the pleading requirements of the federal rules do not extend merely to plausibility, they demand plausibility based upon Rule (b s heightened degree of specificity. Ambrosia Coal & Constr. Co. v. Pages Morales, F.d 0, - ( th Cir. 00 (to satisfy Rule (b, RICO complaints must allege what the defendants gained by the alleged fraud. At first blush, plaintiff s complaint appears to contain the sort of particularity required when pleading fraud and RICO claims. It contains over pages of allegations relating to the workings of the Pinoleville tribal government, composition of tribal commissions and boards, decisions of the

25 Case :-cv-0-who Document Filed 0// Page of 0 0 Tribal Council, the Tribe s business ventures, and the Tribe s casino development consultants and other agents and employees of the Tribe. It contains verbatim recitations of s from Melissa Canales and Donna Winner regarding the status of the Pinoleville Casino Project and JW Gaming s investment; tables showing expenditures by the Tribe and other accounting figures; excerpts of deposition testimony from the Forster-Gill case purporting to show that Chairperson Williams, Vice Chairperson James and Michael Canales know very little about the Tribe, PED and Canales Group. Much of the remainder of the complaint is a disjointed recitation of the history of Mike Canales and JW Gaming s investments with the Tribe and the parties mutual attempts to bring the Pinoleville Casino Project to fruition. Upon close examination, the complaint s 0 paragraphs of allegations, appear largely to be an attempt to create the impression of specificity through page number shock and awe, and numbing detail. See Miccosukee Tribe of Indians of Florida v. Cypress, F.d 0, (th Cir. 0. As the Eleventh Circuit noted in Miccosukee, it is unnecessary in this case to even reach the elements of the predicate offenses for the RICO claims. The deficiency of the pleadings exists at a more fundamental level. Id. at. Although it contains a smattering of conclusory and speculative allegations regarding the underlying motives of the individual defendants, especially Chairperson Williams and Vice Chairperson James, there are few, if any, plausible allegations regarding the very heart of the alleged racketeering scheme conducted by the defendants the conversion of the Loan proceeds to personal use. Beyond the mere assertion that this is what occurred, there is no attempt to identify what amount of the Loan was converted to personal use, when such conversion occurred, how it occurred, and by whose direction or orders. Further, nothing is plausibly alleged to suggest that the Tribal Defendants who played more minor roles in the alleged scheme, i.e., Lenora Steele, Kathy Stallworth, Michelle Campbell, Julian J. Maldonado, Donald Williams, Veronica Timberlake, Cassandra Steele, Jason Edward Running Bear Steele, and Andrew Stevenson, had actual knowledge of any illicit transfers. Most significantly, there are no

26 Case :-cv-0-who Document Filed 0// Page of 0 0 specific factual references to support the allegation that Leona Williams and Angela James personally gained through the alleged fraud against JW Gaming, and that the other Tribal Defendants were complicit in the scheme. In short, the allegations underlying plaintiff s claims are simply too vague, conclusory and speculative to be plausible. See Ashcroft, U.S. at ( A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.. For these reasons, JW Gaming fails to satisfy the heightened pleading requirements for federal RICO claims and is left with the only claim that it ever had to begin with breach of contract. The RICO and fraud claims should be dismissed on this basis alone. See Apache Tribe of Oklahoma v. Brown, F. Supp. d (W.D. Okla. 0 (granting motion to dismiss RICO claims for failure to plead with requisite particularity under Rule (b.. Plaintiff Fails to Establish the Elements of a RICO Claim. To state a RICO claim under (c, a plaintiff must show: ( conduct ( of an enterprise ( through a pattern ( of racketeering activity (known as predicate acts ( causing injury to plaintiff s business or property. United Bhd. of Carpenters & Joiners of Am. v. Bldg. & Const. Trades Dep't, AFL-CIO, 0 F.d, (th Cir. 0. Here, JW Gaming s complaint In light of this stark deficiency, it is no stretch to conclude that the RICO claims were brought for the purpose of stigmatizing the Tribal Defendants in furtherance of the intra-tribal dispute described above. See Katzman v. Victoria's Secret Catalogue, F.R.D., (S.D.N.Y. (quoting Figueroa Ruiz v. Alegria, F.d, 0 (st Cir.0 ( Because the mere assertion of a RICO claim... has an almost inevitable stigmatizing effect on those named as defendants,... courts should strive to flush out frivolous RICO allegations at an early stage of the litigation.. The utter lack of basic allegations to support a RICO claim also calls into question the propriety of allegations regarding conversion of federal funds, and other defamatory averments, which plaintiff no doubt assumed would be seen as supportive of the broad, but ultimately unfounded, racketeering scheme among tribal leaders. The Court may exercise supplemental jurisdiction over the fraud claim pursuant to U.S.C., because the fraud claim is so related to the claims in th[is] action that they form part of the same case or controversy.

27 Case :-cv-0-who Document Filed 0// Page of 0 0 is deficient because it fails to allege a pattern of racketeering activity or any viable predicate acts in support of such racketeering. a. Plaintiff fails to allege a pattern of racketeering activity. A pattern of racketeering activity requires the commission within a ten year period of at least two predicate acts that violate laws listed in U.S.C. (. These acts must be related and must amount to, or threaten the likelihood of, continued criminal activity. See H.J. Inc. v. Northwestern Bell Telephone Co., U.S., (. In the Ninth Circuit, cases which allege only one scheme, perpetrated on one victim, are usually insufficient to establish a pattern. See, e.g., Sever v. Alaska Pulp Co., F.d, (th Cir. (affirming dismissal of RICO claims where although [plaintiff] alleges a number of acts, [defendant s] collective conduct is in a sense a single episode having the singular purpose of impoverishing [plaintiff], rather than a series of separate, related acts, and noting there was but a single victim involved. ; Jarvis v. Regan, F.d, - (th Cir. (affirming dismissal of RICO claim where alleged pattern consisted of three acts of mail and wire fraud committed by legal aid organizations in obtaining a single federal grant. Although not entirely clear, the essence of Plaintiff s RICO argument is that the 00 promissory note from the Tribe to Canales Group, LLC was a sham because Canales Group had not in fact provided the Tribe with funds in the amount of the note. The complaint then alleges that the 00 note to the Canales Group was later replaced by the 0 note from the Tribe to the Canales Group. The thrust of the complaint is that had JW Gaming known the debt owed to Canales Group was not the result of a loan for the full amount of the note, JW Gaming would not have agreed to loan the Tribe $. million. Because the Ninth Circuit requires more than one scheme perpetrated against more than one victim, plaintiff has failed to allege a pattern of racketeering activity. JW Gaming is the only alleged victim here. And, despite the numerous and wide-ranging allegations, there is only but one 0