Case 1:14-cv LJO-SAB Document 30 Filed 10/23/14 Page 1 of 12

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1 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of 0 Robert A. Rosette (CA SBN ) Geoffrey M. Hash (CA SBN ) ROSETTE, LLP Blue Ravine Rd., Suite Telephone: () -0 Facsimile: () -0 rosette@rosettelaw.com ghash@rosettelaw.com Attorneys for the Picayune Rancheria of the Chukchansi Indians, a federally recognized Indian tribe UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA STATE OF CALIFORNIA, Plaintiff, vs. PICAYUNE RANCHERIA OF CHUKCHANSI INDIANS OF CALIFORNIA, A FEDERALLY RECOGNIZED INDIAN TRIBE, Defendant. Case No.: :-CV-0 LJO SAB DEFENDANT S RESPONSE TO PLAINTIFF S REQUEST FOR PRELIMINARY INJUNCTION Time: :00 a.m. Courtroom Four th Floor Date: October, Hon. Lawrence J. O Neill Blue Ravine Road Suite I. INTRODUCTION Defendant, comprised of the duly elected governing bodies of the Picayune Rancheria of Chukchansi Indians ( Tribe ) - specifically, the 0 Tribal Council, the Tribal Council, the Tribal Council, the Tribal Council and the Unification Council ( Defendant or Elected Leadership ) respectfully submits the following brief in response to the Plaintiff s Request for Preliminary Injunction filed on October, ( Motion ) The Defendant has a deep understanding and appreciation of the gravity of the issues at hand. Indeed, their efforts toward working amicably through the democratic processes and laws CASE NO.: :-CV-0 LJO SAB

2 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of of the Tribe demonstrate how the Elected Leadership has done everything in its capacity to avoid the worst case scenario that the Tribe is faced with today the closure of the Casino. The actions of a group of unelected individuals seeking to gain control through violence and intimidation should not be afforded any credence whatsoever. For this reason, the Elected Leadership restates its position that a modified form of the existing Temporary Restraining Order as issued on October, ( TRO ) be implemented as a Preliminary Injunction. In addition, there are several matters that this Court should consider before deciding the terms of any preliminary injunction. II. STATEMENT OF FACTS Defendant hereby incorporates the facts alleged in Defendant s Response To Temporary 0 Restraining Order And Request For Modification Of Order (ECF No. 0) ( Response to TRO ) as if fully stated herein, including the declarations and exhibits submitted therewith, as well as the Supplemental Declarations of Chairpersons Nancy Ayala ( Ayala Decl. ) and Reggie Lewis ( Lewis Decl. ), filed concurrently herewith. III. ARGUMENT A. THE STATE HAS MISCHARACTERIZED THE ACTIONS OF THE DEFENDANT As a threshold matter, the State s Request for Preliminary Injunction improperly attributes actions of the McDonald Faction to the Defendant. Such mischaracterization is fundamental in that it directly affects the nature of appropriate injunctive relief under the applicable standards. For example, the State alleges that Firearms or other weapons were drawn and brandished by both sides. The opposing groups security forces were held at gunpoint and/or tazered during the takeover. ECF No., :-. However, there is absolutely no evidence before this Court establishing that the Elected Leadership s security or Casino Security ever possessed any firearms. Equally absent is any evidence demonstrating that the Elected Leadership s security or Casino Security ever brandished or drew any other weapons. And, there is no evidence that the Elected Leadership s security or Casino Security ever held anyone at gunpoint and/or tased [anyone] during the takeover. ECF No., :-. Instead, all evidence presently before this CASE NO.: :-CV-000-LJO-MJS DECLARATION OF S. OLSON

3 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of 0 Blue Ravine Road Suite Court including the surveillance footage provided as Exhibit A to the Declaration of Ken Frazel (ECF No. 0-) demonstrates that it was only the unelected members of the McDonald Faction that engaged in such conduct. It is simply inaccurate and inequitable to characterize the Elected Leadership as having engaged in conduct similar to that in which the McDonald Faction alone engaged. The State s Motion for Preliminary Injunction also contains speculation that is unsupported by any admissible evidence. For example, in the Supplemental Declaration of Joginder Dhillon, Mr. Dhillon claims that The groups... remain poised to take actions which would threaten public safety. ECF No. -, :-. Again, however, there is absolutely no evidence that the Elected Leadership has taken any action that has ever threatened public safety. And, there is certainly no evidence that the Elected Leadership remain[s] poised to take actions which would threaten public safety. See Lewis Decl.,, and Exhibit K attached thereto. Moreover, the State mischaracterizes Defendant s position regarding public safety. The Tribe is not arguing that economics of the Casino are more important than public safety. Instead, it argues that the economics of the Casino (the jobs, benefits, multiplier effects, etc.) are an essential component of public health, welfare and safety. While threats of violence are one aspect of public health, welfare and safety, there are many other factors that are a part of evaluating the state of public health, welfare and safety. B. MAINTAINING THE STATUS QUO REQUIRES THAT PROPER DEFERENCE BE AFFORDED TO THE TRIBE S CURRENT LAWFUL GOVERNING BODY, THE UNIFICATION COUNCIL, WHICH DEFERENCE IS CONSISTENT WITH BOTH FEDERAL RECOGNITION AND WITH THE DEMOCRATIC ACTIONS OF THE TRIBE S CITIZENS The TRO previously entered by this Court maintained the status quo as it existed on October,, to a large but incomplete degree. See Reporter s Transcript of Proceedings for the October, Hearing Re Temporary Injunction Issues, :- and :-. This ruling was consistent not only with prior federal government determinations, but also with definitive See also, Carmen George, Sherriff Anderson: Chukchansi cases to go to DA; those who committed violations will be arrested. Fresno Bee, October, (Sherriff Anderson states, I went to both sides and said, Let s voluntarily disarm. The Lewis group agreed, the McDonald group did not. ). CASE NO.: :-CV-0 LJO SAB

4 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of 0 Blue Ravine Road Suite actions taken by the Tribe s citizens, in accordance with the Tribe s Constitution. For these reasons, any Order granting the Plaintiff s requested relief for a preliminary injunction should continue to maintain the status quo by affording requisite deference to the Tribal governing body in possession and control of the Casino as of October,, and providing governmental benefits to Tribal citizens as of October,. As set forth below, such a ruling would continue to be consistent with prior federal recognition and past democratic processes. Background on Unification Council By way of background, on August,, the elected Tribal Council members from the four previous Tribal Elections (0-), joined together in an historic moment for the Tribe, pursuant to a duly-authorized Mediation Agreement, to establish the Unification Council an interim governing body that would serve as the leadership of the Tribe until a Clean Slate Election takes place in May of. See Ayala Decl., - and -, and Exhibits B and C attached thereto. Recognizing the undue burden that continued governance contentions were having on the Tribe and its citizens, members of the factions previously led by Nancy Ayala and Reggie Lewis chose to put aside their differences and join together to restore the faith of its citizens through the implementation of a democratic process. See id. In doing so, they also invited Morris Reid and Dora Jones (the two persons comprising the Reid Faction ) as well as Tex McDonald, to participate in this unification process. See Ayala Decl.,. The legality and validity of each of these separately elected Tribal Councils pursuant to both United States recognition and federal law serve as the basis for the legality and validity of the Unification Council. Moreover, the action of the Elected Leadership to unite for the good of the Tribal citizens is wholly consistent with federal policy, as emphasized in several correspondences from the Bureau of Indian Affairs ( BIA ), emphasizing that the Tribe work together to resolve its internal disputes itself. See letter dated February, from Amy Dutschke (Regional Director of the BIA s Pacific Regional Office), previously attached as Exhibit D to the Declaration of Robert A. Rosette (ECF No. 0-). The Tribe has done so through this momentous effort and, for the reasons set forth below, appropriate deference to the status quo under the governing authority of the Unification CASE NO.: :-CV-0 LJO SAB

5 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of 0 Council (which, again, is comprised of a total of the last four duly-elected Tribal Councils), should be afforded by this Court in the issuance of its preliminary injunction order.. Deference to the Unification Council is Mandated by Tribal Law and Democratic Actions Taken by the Tribe s Citizens In addition to the definitive federal recognition afforded to the Unification Council (vis-à-vis the determinations recognizing the 0 and Councils), the most significant body of the Tribe it s General Council (comprised of the Tribe s entire adult voting membership) took historical action, pursuant to the Tribe s Constitution, to recognize the authority of the Tribal Council, which also, significantly is part of and has authorized the Unification Council. On September,, faced with an on-going Tribal governance dispute that was jeopardizing the Tribe s government programs and businesses, the Tribe s General Council assembled, for only the second time in the Tribe s twenty-five year history, and passed law in the form of six () General Council Resolutions ( General Council Resolutions ). See Lewis Decl.,, Exhibits B-G thereto. Each of these resolutions affirmed and expressed the democratic will of the Tribe s citizens that the Council served as the authorized governing body of the Tribe. Id. at. Moreover, and significantly, through these resolutions, the General Council also granted this Court the jurisdiction to enforce the General Council Resolutions. Id. at 0. Therefore, as the Tribal Council, also acting in the best interest of the Tribe, is part of and has authorized the Unification Council, this Court s deference to the status quo government the Unification Council is both necessary and appropriate pursuant to the Tribe s democratic processes. In addition to the plain language of the Tribal law itself, there is significant precedent predating the action, which serves to further reaffirm deference to the Tribe s status quo government and the related General Council Resolutions. When faced with a Tribal government Blue Ravine Road Suite Pursuant to Article VI of the Tribe s BIA-approved Constitution, when a meeting of the General Council obtains a quorum (or % of the General Council), all those present at such a meeting may conduct all business for the Tribe. See Lewis Decl. at. CASE NO.: :-CV-0 LJO SAB

6 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of dispute in early, the Tribe experienced a crisis situation when the bonds that were issued in the principal amount of $0,000,000 to build the Casino, which bonds were due, with a looming maturity date. See Lewis Decl., The Tribe, in effect, became paralyzed from curing any 0 Blue Ravine Road Suite defaults and negotiating a restructure of the outstanding bonds, as a result of the governance dispute. Consequently, the General Council took action for the Tribe s benefit by establishing a quorum of the General Council on March 0, which was the first time in the Tribe s twenty-five year history that a General Council Meeting quorum had been established. See Lewis Decl.,. Through these resolutions the General Council voted to recognize the Tribal Council elected in (a body that is also part of the Unification Council), and authorized this governing body to negotiate and enter into the Indenture with the Trustee, and voted to authorize that Tribal Council to appropriately waive the Tribe and the Authority s sovereign immunity from suit to grant the New York Supreme Court with jurisdiction over the Indenture. See Lewis Decl., -. With hundreds of millions of dollars at stake, by entering into the Indenture, the Trustee recognized the absolute legitimacy of the Tribe s constitutional authority to make laws through the General Council Resolution process, as did the NIGC through review of the Indenture. Id. The BIA followed suit in its recognition of the Tribal Council through Superintendent Burdick s May letter. See Letter dated May, from Troy Burdick (Superintendent of the BIA s Central California Agency), previously attached as Exhibit C to the Declaration of Robert A. Rosette (ECF 0-). Therefore, in deferring to the Tribe s constitutional process, the Court would be acting consistent with the similar affirmation of this identical process provided by federal government agencies (including the NIGC, the DOI and the BIA), along with courts and other third parties (e.g., banking institutions and investors). To be clear, in asking that this Court defer to the legitimacy of the General Council Resolutions, the Defendant is not asking that this Court improperly involve itself in the Tribe s affairs. Indeed, the decision as to which individuals comprise the Tribal Council has already been made by the Tribe s citizens through this Constitutionally-enacted democratic process. Moreover, the New York Supreme Court has already applied such General Council decisions in CASE NO.: :-CV-0 LJO SAB

7 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of 0 Blue Ravine Road Suite finding that the Tribe had waived sovereign immunity through recognizing the General Council Resolution process for approving the Indenture and the grant of subject matter jurisdiction and limited waiver of sovereignty contained therein.. See Lewis Decl.,. Therefore, the only improper intrusion on the part of this Court would be to ignore this Tribal law and democratic process and refuse to uphold the status quo of the Tribe s government, as reflected by the Unification Council. i. Deference to the Unification Council is Both Necessary and Consistent with Prior Federal Government Determinations As explained in the TRO hearing before this Court on October,, the current governing body of the Tribe which was fully functioning and assisting in the operations and regulation of the Casino as of October, has been recognized by federal government, by virtue of recognition of prior uncontested Tribal elections. It is standard practice of the BIA, when faced with competing claims to tribal leadership, to conduct business with the last uncontested tribal council. See Alturas Indian Rancheria v. Acting Pacific Regional Director, IBIA, (). Moreover, pursuant to the Article V of the Constitution, the Tribal Council is delegated with broad governing authority as is necessary to carry out its powers. Pursuant to Article VII, Section of the Tribe s Constitution (adopted in ), on December,, the Tribe held an election for Tribal Council positions wherein Nancy Ayala, Charles Sargosa and Carl Bushman were elected to the Tribal Council. See Ayala Decl.,. The authority of the Council as the last recognized governing body of the Tribe was made clear in the BIA s letter dated May,. See Letter dated May, from Troy Burdick (Superintendent of the BIA s Central California Agency), previously attached as Exhibit C to the Declaration of Robert A. Rosette (ECF 0-). In that letter, the BIA, through Superintendent Troy Burdick, recognized that the December election was conducted consistent with the The composition of the Tribal Council following the election was: Nancy Ayala, Chairperson; Reggie Lewis, Vice-Chairperson; Tracy Brechbuehl, Secretary; Dr. Karen Wynn, Treasurer, Chance Alberta, Member-at-Large; Charles Sargosa, Member-at-Large; and Carl Buzz Bushman, Member-at-Large ( Council ). CASE NO.: :-CV-0 LJO SAB

8 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of 0 Blue Ravine Road Suite Election Ordinance and Tribal Constitution, and was the most recent successful election of the Picayune Rancheria. Id. at. As such, the BIA recognized the Council as the governing body authorized to conduct government to government business with the [federal government]. Id. Various appeals and competing federal contract applications resulted in the issuance of a decision by BIA Regional Director Amy Dutschke, dated February, ( February Decision, previously attached previously attached as Exhibit D to the Declaration of Robert A. Rosette (ECF 0-). This decision vacated Superintendent Burdick s May recognition of the Council, but it is currently under appeal with the IBIA pursuant to CFR Part, and its effect is, therefore, automatically stayed. It is important to note, however, that even the February Decision acknowledges that the December,, election was conducted in accordance with the Tribe s Constitution... and the Election Ordinance. See February Decision at. Therefore, the validity and legitimacy of the Council has never been questioned by the United States. Similarly, federal recognition was also afforded to the status quo government with the February Decision, wherein the BIA recognized the 0 Council as the last uncontested Tribal Council with whom the BIA would conduct business on an interim basis, until such time as the issue is resolved in accordance with the Tribe s laws. (February Decision at ). Though not dispositive to the issues addressed in this Response, it is important to note that neither Morris Reid nor Dora Jones have standing to represent the Tribe or its governing body in any capacity whatsoever. As members of the 0 Tribal Council, Reid and Jones have two votes on the 0 Tribal Council and and Reid, as a member of the Council, has one vote on that Council. Quorums of both the and 0 Tribal Councils have adopted resolutions delegating governing authority to the Unification Council to lead the Tribe to the Clean Slate Election in May. These voting rights, in no way, vest upon Morris Reid and Dora Jones the requisite standing to make representations, arguments or appearances on behalf of the Tribe, in this or other fora. The arguments and representations made by Reid and Jones through their legal counsel, John Peebles, are statements of two individual Tribal members and should be treated as such by this Court. Moreover, in making its case that that State is likely to succeed on the merits, the State argues that the Tribe has through Morris Reid admitted a Compact breach. (See ECF No., fn, at :-). There is no evidence that in filing his pending suit, or through any other action, Morris Reid presently speaks on behalf of the Tribe or under any authority other than that which is self-anointed. Indeed, the Tribe is in the process of preparing a Motion to Intervene and Motion to Dismiss on the grounds that Reid does not have any standing vis-à-vis the Tribe and, as such, may not bring the case referenced by the State. The BIA subsequently filed a Motion with the Interior Board of Indian Appeals ( IBIA ) to place its February Decision into immediate effect in light of exigent circumstances and threats to public health and safety. The IBIA declined to put the decision into immediate effect based upon representations by the McDonald Faction that () there were no threats of violence () Tribal government programs were properly funded and administered and () CASE NO.: :-CV-0 LJO SAB

9 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of 0 Blue Ravine Road Suite As parties to the Mediation Agreement, the 0 Council and Tribal Council expressly voted and adopted Tribal Council resolutions to participate as part of the Unification Council, authorizing the Unification Council to serve as the interim governing body of the Tribe until a new election takes place. See Ayala Decl., - and Exhibits B and C attached thereto. This is not only consistent with the broad authority vested to the 0 and Tribal Councils, pursuant to the Tribe s Constitution, but also serves to address the statement in the February Decision that the 0 Council would be recognized as the interim governing body until such time as the issue is resolved in accordance with the Tribe s laws. Therefore, notwithstanding any appeals that are pending in relation to the May and February BIA letters, the definitive fact remains that the 0 and Councils which are a part of the Unification Council, the Defendant in this action were the last uncontested authoritative bodies recognized by the United States in connection with this Tribe. As such, maintenance of the status quo under the Unification Council is both appropriate and proper as it is consistent with prior United States determinations. ii. Deference Would be Appropriately Afforded by this Court by Leaving Intact the Status Quo for Purposes of Tribal Governmental Funding Funding Upon Which The Tribal Citizens Desperately Rely As set forth above, deference to the status quo with regard to the Tribe s governing body as it existed on October,, is necessary and appropriate not only pursuant to federal policy and prior federal recognition, but also consistent with previous democratic actions taken by the Tribe s citizens under the Tribe s laws. Such deference would require leaving intact the treatment and allocation of Tribal governmental funding, as it existed on October,. there was no risk of default under the Tribe s loan agreements for its Casino. See, IBIA Order Denying Motion to Place Regional Director s Decision Into Immediate Effect, Ayala Decl.,, Exhibit D thereto. Clearly, current circumstances demonstrate that all three circumstances do not exist in light of the threats to public health and safety, the jeopardized governmental programs and the current default due to Casino closure. CASE NO.: :-CV-0 LJO SAB

10 Case :-cv-0-ljo-sab Document 0 Filed 0// Page 0 of 0 As set forth in Defendant s prior filing, the revenues generated by the Casino are the sole source of monies utilized by the Tribe to fund the Tribal government and to supply basic governmental services to its citizens, including eldercare, healthcare, education and other social services. See Ayala Decl.,. On October, all enrolled members of the Tribe were receiving tribal benefits regardless of their political affiliation. Id. Disruption in funding to the lawfully recognized government, as it existed on October,, would result in dire consequences, having disastrous impacts on the Tribe s citizens. Id. Moreover, such a modification and interruption in governmental services would run afoul of the requirement that a court narrowly tailor injunctive relief to remedy the specific harm alleged. See Lamb-Weston, Inc. v. McCain Foods, Ltd., F.d 0, ( th Cir. ); Califano v. Yamasaki, U.S., 0 () ( injunctive relief should be no more burdensome to the defendants than necessary to provide complete relief to the plaintiffs ). Thus, to ensure that the preliminary injunction order reached by this court prevents and does not create immediate and irreparable injury, this Court must keep intact the status quo for purposes of the Tribe s governmental funding. Fed. R. Civ. P. (b). C. THE MCDONALD FACTION COMES TO THIS COURT WITH UNCLEAN HANDS, AND MUST NOT BE AFFORDED ANY RECOGNITION Under established law, [h]e who comes into equity must come with clean hands. Blain v. Doctor s Co., Cal. App. d. 0, 0 (0). The question of unclean hands is a question of fact in which the court has a great deal of discretion. Kendall-Jackson Winery, Ltd. v. Superior Court, Cal. App. th 0 (Cal. App th, ), as modified on denial of reh'g (Jan., 00)(Quoting CrossTalk Productions, Inc. v. Jacobson, Cal.App.th, (Cal App nd, )). But for the McDonald Faction s violent take-over attempt of October,, there would be no present closure orders due to public safety concerns at either the state or federal levels. The McDonald Faction alone is the source of the violent conduct that has created the public safety Blue Ravine Road Suite 0 CASE NO.: :-CV-0 LJO SAB

11 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of 0 Blue Ravine Road Suite concern. Under the doctrine of unclean hands, the McDonald Faction should be barred from reaping any benefit of its actions. However, to the extent the McDonald Faction now has a seat at the table (i.e., in any mandatory settlement discussions) and may impact the status of such matters as the Court s TRO, and specifically, how the Elected Leadership may receive and disburse its Governmental funds, it is directly benefiting from its own illegal conduct, and its ability to do so would be facilitated by this Court. At this time, the State and this Court are essentially holding the Casino hostage and forcing the Tribe through its Elected Leadership to negotiate in good faith with a party (the McDonald Faction) that has demonstrated nothing but bad faith and placed the public s safety, health and welfare directly at risk. For example, the State alleges the Tribe is in a position to resolve the issue in a manner that is consistent with its sovereign interests and that preserves jobs and economic development for the Tribe as well as the local community. See ECF No. at 0:-. Similarly, the State alleges the keys to the Casino s reopening to the public are in the Tribe s hands. Id., at :-. Frankly, because of the position taken by the State and adopted by the Court, the Tribe is now being forced to include an unelected violent faction in settlement negotiations that would never have been required but for that faction s violent actions. This is all the more troubling as the Tribe was well on its way through the Unification Council to finally resolving the leadership dispute through a clean-slate election in which all members will be eligible to vote. IV. CONCLUSION For the foregoing reasons, the Tribe respectfully requests that the existing TRO and any related Preliminary Injunction be modified to preserve the status quo as it existed in nearly all respects including operation of the Casino and the related governmental functions as existed on October,, just prior to the violent actions of the McDonald Faction. Solely the CASE NO.: :-CV-0 LJO SAB

12 Case :-cv-0-ljo-sab Document 0 Filed 0// Page of McDonald Faction and individuals associated with the McDonald Faction must be enjoined from entering the Casino premises and from any efforts aimed at repossessing the Casino. RESPECTFULLY SUBMITTED, /s/ Robert A. Rosette Attorneys for Defendant Picayune Rancheria of the Chukchansi Indians 0 Blue Ravine Road Suite CASE NO.: :-CV-0 LJO SAB