Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 1 of 13 EVERGLADES ECOLODGE AT BIG CYPRESS, LLC, a Florida Limited Liability Company vs. Plaintiff, SEMINOLE TRIBE OF FLORIDA, a federally recognized Indian tribe. Defendant. / UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 0:11-cv-60839-Civ-COOKE/TURNOFF EVERGLADES MOTION TO REMAND AND INCORPORATED MEMORANDUM OF LAW Plaintiff, EVERGLADES ECOLODGE AT BIG CYPRESS, LLC ( Everglades ), pursuant to 28 U.S.C. 1447(c), moves to remand the instant matter to the Seventeenth Judicial Circuit in and for Broward County, Florida, and in support states: INTRODUCTION & FACTUAL BACKGROUND 1. On or about March 30, 2011 Everglades filed a two-count Complaint against Defendant, SEMINOLE TRIBE OF FLORIDA (the Tribe ) in the Seventeenth Judicial Circuit, in and for Broward County, Florida. In its Complaint, Everglades asserted two counts: Breach of Contract/Lease (Count I) and, alternatively, Specific Performance (Count II) arising out of the Tribe s breach of a Business Lease ( Lease ) for a fifteen (15) acre parcel of land in which Everglades was going to develop a full service resort-style ecolodge. 1 1 Everglades Complaint is attached as Exhibit A to the Tribe s Notice of Removal (DE #1). The Lease is attached as Exhibit A to Everglades Complaint.
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 2 of 13 2. Prior to the parties entering into the Lease, in February 2007, Everglades made a power point presentation to the Tribe outlining the program for the Concept and the Eco-Tourism Facility. See Complaint 15. 3. At the February 2007 meeting, Everglades was instructed by the Tribe to begin lease negotiations for the (15) acre parcel of land, located at West Boundary Road, Big Cypress Seminole Indian Reservation, Florida. See Complaint 16. 4. From February 2007 through November 2008, Everglades made several power point presentations to certain tribal committees of the Tribe regarding the program for the Ecolodge Concept and the Eco-Tourism Facility. See Complaint 17. 5. On November 28, 2008, lease negotiations were completed and the Tribe, as Landlord, and Everglades, as Tenant, entered into the Lease. The Lease was executed by Mitchell Cypress, Chairman of the Tribal Council on behalf of the Tribe; Mr. Cypress signature was witnesses by two individuals. See Complaint 19; Exhibit A to Complaint at 39. 6. Thereafter, Everglades undertook to fulfill its obligations under the Lease and expended substantial sums of money, in excess of $700,000, in the process. For example, Everglades commissioned surveys of guests at the neighboring Billie Safari; retained architects and developers; hired consultants to assist with the National Environmental Protection Agency ( NEPA ) Environmental Assessment process, which was completed and submitted to the Tribe s Environmental Department in July 2010; formed Florida Everglades Resort LLC to manage the Eco-Tourism Facility; and retained a firm to perform a market feasibility and financial study, which was completed in August 2010 with a favorable endorsement. See Complaint 18-29. In addition, Everglades commission traffic studies, worked to obtain water and sewer permitting as well as secured approval by the Seminole Historic Preservation Society. 2
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 3 of 13 7. Unbeknownst to Everglades, the November 26, 2010 Seminole Tribune reflected that at a Tribal Council meeting held on October 21, 2010, the Tribal Council passed Resolution 35 rescinding Seminole Tribe of Florida Resolution No.: C-070-09 approved on November 20, 2008 the resolution approving the Lease. See Complaint 30. 8. Resolution 35 improperly and ineffectively rescinded the Lease without any notice to Everglades. See Complaint 31 9. On January 4, 2011, Everglades sent notice to the Tribe of their material breach as provided for under section 53(c) of the Lease. See Complaint 34. 10. The Tribe did not rescind its termination of the Lease and Everglades filed suit in the Seventeenth Judicial Circuit in and for Broward County, Florida. See Complaint 35 11. On April 19, 2011, the Tribe filed its Notice of Removal (DE #1) pursuant to 28 U.S.C. 1331 federal question jurisdiction. The Tribe asserts since the Lease was allegedly not approved by the U.S. Secretary of Interior (an assertion that Everglades disputes), it is void ab initio and therefore the rights of the parties are governed by 25 U.S.C. 415(a), 81 and 177 and 25 C.F.R. Part 162. See DE #1 1(d), 2(a). 12. The Tribe argues the issue cannot be determined without resort to those [federal] laws over which this court has original jurisdiction. 2 See DE #1 2(f). However, as set forth herein, the issues surrounding the Lease do not present federal issues. 13. The Tribe s Notice of Removal is premised on the Lease not being approved by the Secretary of Interior. Indeed, without any support, the Tribe makes the blanket assertion that no Secretarial approval has ever been granted. See DE #1 2(a). 2 In its Motion to Dismiss Everglades Complaint for Lack of Subject Matter Jurisdiction and Failure to State Claim (DE #6), the Tribe uses its position regarding the purported invalidity of the Lease as the basis for its argument that Everglades claims are barred by tribal sovereign immunity. The Tribe claims this Court lacks subject matter jurisdiction based on of the sovereign immunity defense. See DE #6. 3
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 4 of 13 14. However, the last page of the Lease, page 39, signed by Everglades and the Tribe, witnessed by four different individuals, provides APPROVED: U.S. DEPARTMENT OF THE INTERIOR, BUREAU OF INDIAN AFFAIRS, SEMINOLE AGENCY. 15. Everglades relied on the language quoted in paragraph 14 supra. The Tribe contends the Lease was not approved by the Secretary, but does not provide any support and fails to explain the above-quoted language in the Lease, which not only negates its contention, but raises the question whether the Tribe speciously inserted page 39 of the Lease after it was executed. The issue of Secretarial approval is therefore a disputed issue of fact. 16. Moreover, there is an ambiguity as to Secretarial approval as paragraph 22 of the Lease provides the Tribe has full right and authority to enter into this Lease and perform Landlord s obligation under this Lease and that the person executing this Lease has been duly authorized to do so. (Emphasis added). Thus, the Tribe s argument that Secretarial approval is a condition precedent to the validity of the Lease is controverted by the plain language of the Lease indicating the Tribe had the full right and authority to enter into the Lease. According to the Lease terms, the parties entered into a valid, binding contract. 17. The Tribe also misled Everglades to believe the Lease had been approved by the Secretary. The Tribe advised Everglades that once the Bureau of Indian Affairs ( BIA ) 3 approved the Lease, it would trigger the NEPA process, which also had to be approved by the BIA. This was confirmed in a July 31, 2008 e-mail sent by Calvin Pell to Everglades principal, Wendell Collins. In that e-mail, Calvin Pell advised the BIA has to sign off on the lease agreement [which] causes the project to enter the NEPA process. See 7/31/08 E-mail 3 The BIA is part of the Department of Interior and has the authority to approve leases of tribal lands on behalf of the Secretary of Interior. 4
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 5 of 13 attached as Exhibit A. On or about January 14, 2009 4, Mr. Collins wrote Chief David Cypress noting the parties understanding that BIA approval of the Lease would trigger the NEPA process. See January 14, 2008 letter attached as Exhibit B. After the Lease was executed, Everglades worked with the Tribe to secure BIA approval of the NEPA process, which suggested the BIA had already approved the Lease. Accordingly, the Tribe, by working with Everglades on the NEPA process, misled Everglades to believe the Lease had been approved by the BIA by virtue of their representation that BIA approval of the Lease triggered the NEPA process. 18. Nevertheless, even assuming arguendo the Secretary of the Interior/BIA did not approve the Lease, such fact does not give rise to federal question jurisdiction. The issue is merely an argument raised by the Tribe to support its defense that Everglades claims are preempted by federal law. The defense of federal preemption is insufficient as a matter of settled law to confer federal question jurisdiction. See infra. 19. In addition, the Tribe consented to jurisdiction in the Seventeenth Judicial Circuit in and for Broward County, Florida. See Lease 53 F (providing that the Tribe consents to the jurisdiction of, to be sued in and to accept and be bound by any order or judgment of the United States District Court for the Southern District of Florida or the 17th Judicial Circuit in and for Broward County, Florida. ). The Lease clearly provides the Tribe consented to suit in state court. While the Tribe also consented to federal court jurisdiction, that fact, without more, cannot provide the basis for federal jurisdiction. The requirements of 28 U.S.C. 1331 and 1441 must still be met. As explain herein, the Tribe fails to meet its burden to establish federal question jurisdiction and this case must therefore be remanded. 4 The letter is inadvertently dated January 14, 2008; it should have been dated January 14, 2009. 5
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 6 of 13 20. This is a contract case which does not present a federal question. The fact the Tribe is a federally recognized Indian tribe does not, de facto, confer federal jurisdiction. See infra. 21. The Court must remand this cause to the Seventeenth Judicial Circuit in and for Broward County, Florida, since: a. There is no federal question as Everglades claims are purely state law claims; b. The Tribe s federal preemption defense is insufficient to establish federal question jurisdiction as a matter of settled law; and c. The Tribe consented to jurisdiction in the Seventeenth Judicial Circuit in and for Broward County, Florida. MEMORANDUM OF LAW A. Law Governing Removal and Remand - the Well-Pleaded Complaint Rule 22. It is axiomatic that federal courts have limited jurisdiction. See Ramirez v. Humana, Inc., 119 F.Supp.2d 1307, 1308 (M.D. Fla. 2000) (citing Kokkonen v. Guardian Life Inso. Co. of America, 511 U.S. 375, 377 (1994)). It is to be presumed that a cause lies outside this limited [federal] jurisdiction and the burden of establishing the contrary rests upon the party asserting jurisdiction. See Ramirez, 119 F.Supp.2d at 1309 (internal citations omitted). Removal statutes are to be narrowly construed and any uncertainties regarding the district court s jurisdiction must be construed in favor of remand. Id. (citing Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994) (emphasis added)). 23. A presumption in favor of remand is necessary because if a federal court reaches the merits of a pending motion in a removed case where subject matter jurisdiction may be lacking, it deprives a state court of its right under the Constitution to resolve controversies in its 6
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 7 of 13 own courts. See Univ. of South Alabama v. American Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999). 24. In considering whether subject matter jurisdiction exists, federal district courts are guided by the well-pleaded complaint rule, which provides that the plaintiff s properly pleaded complaint governs the jurisdictional determination. See Ramirez, 119 F.Supp. 2d at 1309. Under the well-pleaded complaint rule, a case may only be removed based on federal question jurisdiction when plaintiff s cause of action demonstrates it is based on federal law. Id. (citing Blab T.V. of Mobile, Inc. v. Comcast Cable Communications, Inc., 182 F.3d 851, 854 (11th Cir. 1999)). Stated differently, only state-court actions that originally could have been filed in federal court may be removed to federal court. See Ramirez, 119 F.Supp. 2d at 1309 (citing Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987)). B. The Defense of Federal Preemption in Insufficient to Confer Federal Question Jurisdiction and Defeat the Well-Pleaded Complaint Rule 25. Importantly, the existence of a federal defense does not make the case removable, even if the defense is preemption and even if the validity of the preemption defense is the only issue to be resolved in the case. See Ramirez, 119 F.Supp. 2d at 1309 (citing Caterpillar, Inc., 482 U.S. at 393) (emphasis added). In the vast majority of cases, the plaintiff may avoid federal jurisdiction by relying exclusively on state law. See Ramirez, 119 F.Supp. 2d at 1309; Blab T.V. of Mobile, Inc., 182 F.3d at 854 (both citing Caterpillar, Inc., 482 U.S. at 392). 5 5 In Ramirez, the court noted the doctrine of complete preemption is a corollary to the well-pleaded complaint rule. 119 F.Supp.2d at 1309. Complete preemption applies when the pre-emptive force of a statute is so extraordinary that it converts an ordinary state common-law complaint into one stating a federal claim. Id. (citing Blab T.V. of Mobile, Inc., 182 F.3d at 854). The court also acknowledged complete preemption only applies in certain claims under the Labor Management Relations Act ( LMRA ), 29 U.S.C. 185, and certain claims under the Employee Retirement Income Security Act ( ERISA ), 29 U.S.C. 1132(a). There is some dispute whether the Supreme Court s decision in Oneida Indian Nation v. County of Oneida, 414 U.S. 661 (1974), which involved a claim by an Indian nation for the fair rental value of lands ceded to the state of New York in 1795, turned on 7
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 8 of 13 26. In Caterpillar, Inc., the Supreme Court held the application of the well-pleaded complaint rule defeated federal question jurisdiction and removability in a case involving statelaw employment contracts. 482 U.S. at 398-99. The court refused to characterize otherwise state-law claims as arising under federal law even though the interpretation of a collective bargaining agreement might ultimately provide the employer/defendant a complete defense and even though the claims on the collective bargaining agreement would have been the subject of federal jurisdiction. Id. at 396-98. Indeed, the court acknowledged: Id. at 393. [I]t is now settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption, even if the defense is anticipated in the plaintiff s complaint, and even if both parties concede that the federal defense is the only question truly at issue. 27. The court went on to note the presence of a federal question in a defensive argument does not overcome the paramount policies embodied in the well-pleaded complaint rule that the plaintiff is the master of the complaint, that a federal question must appear on the face of the complaint, and that the plaintiff may, by eschewing claims based on federal law, choose to have the cause heard in state court. See Caterpillar, Inc., 482 U.S. at 398-99. If a complete preemption. However, the Eleventh Circuit excludes Oneida from consideration on the complete preemption issue. See Ramirez, 119 F.Supp.2d at 1310, n.2 (citing Blab T.V. of Mobile, Inc., 182 F.3d at 855, n.2). The only other cases in which complete preemption has been applied to contracts with Indian tribes are certain cases involving Indian Gaming Regulatory Act, 25 U.S.C. 2701 et. seq. ( IGRA ), which are inapplicable here. See e.g. Bruce H. Lien Co. v. Three Affiliated Tribes, 93 F.3d 1412 (8th Cir. 1996). Nevertheless, as one court noted, approval of a contract by the Bureau of Indian Affairs under IGRA is perhaps relevant to a defense on the merits as to whether a state (or federal) court can pass on the validity of a contract before NIGC has done so, but such provides no support for removal. See Rumsey Indian Rancheria of Wintun Indian of Cal. V. Dickstein, 2008 WL 648451 *5 (E.D. Cal. 2008) (citing U.S. e. rel. The Saint Regis Mohawk Tribe v. President R.C. St. Regis Mgmt. Co., 451 F.3d 44, 50-51 (2nd Cir. 2006) (emphasis added)). The Tribe has not cited and the undersigned was unable to find one federal case that applied the complete preemption doctrine in the context of removal to claims alleged to be governed by 25 U.S.C. 415, 81 or 177. For the foregoing reasons, the doctrine of complete preemption is inapplicable in the instant case. 8
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 9 of 13 defendant could interject a federal defense into an otherwise state-law claim to transform the action into a federal question, the plaintiff would be master of nothing. Id. at 399. 28. Moreover, in Oklahoma Tax Commission v. Graham, 489 U.S. 838, 839 (1989), the Supreme Court was faced with a similar issue involving an excise tax claim brought by the state against an Indian tribe. The tribe removed the action to federal court on the basis of federal question jurisdiction. Relying on Caterpillar, Inc., the court held the case was improperly removed since only state law claims were asserted. See Graham, 489 U.S. at 841. The court noted that while tribal immunity may provide a federal defense to the state s claim, it has long been settled that the existence of a federal immunity defense to the claims asserted does not convert a suit otherwise arising under state law into one which, in the statutory sense, arises under federal law; the district court s jurisdiction is not affected by the fact that tribal immunity is governed under federal law. Id. See also Tamiami Partners, Ltd. v. Miccosukee Tribe of Inidians of Fla., 999 F.2d 503, 508 (11th Cir. 1999) (finding district court lacked federal question jurisdiction where plaintiff asserted state law breach of contract claims despite the fact the tribe s sovereign immunity defense is governed by federal law); Signer v. DHL Worldwide Express, Inc., 2007 WL 1521497 *3 (S.D. Fla. 2007) (holding the defense of federal preemption of a state law claim may not be used as a basis for removal and remanding case to state court); Rumsey Indian Rancheria of Wintun Indian of Cal. V. Dickstein, 2008 WL 648451 *5 (E.D. Cal. 2008) (granting plaintiff s motion to remand, rejecting the application of the complete preemption doctrine and noting that federal question jurisdiction does automatically arise in every contract claim related to Indian gaming contracts under IGRA); Niagara Mohawk Power Corp. v. Tonawanda Band of Seneca Indians, 94 F.3d 747, 753 (2nd Cir. 1996) (rejecting the proposition that statutory requirements governing federal approval of certain contracts between Indians and 9
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 10 of 13 non-indians give rise to a federal common law governing such contracts, citing Tamiami Partners, Ltd. supra); Veeder v. Omaha Tribe of Nebraska, 864 F.Supp. 889, 898 (N.D. Ia. 1994) (noting that [t]he court cannot exercise federal question subject matter jurisdiction simply because one of the parties is an Indian tribe and the case involves Indian property or contracts, citing Tamiami Partners, Ltd. supra). C. Everglades Claims Are Purely State-Law Contract Claims; this Case Must Be Remanded as the Tribe has Failed to Meet its Burden of Demonstrating the Existence of Federal Question Jurisdiction. 29. Everglades, the master of its Complaint, asserted state-law causes of action for breach of the Lease and for specific performance under the Lease. See Complaint. Nothing in Everglades Complaint or the Lease attached thereto remotely suggests its claims are based on federal law. The Tribe s federal preemption defense does not, as a matter of settled law, confer federal question jurisdiction. This case should therefore be remanded to state court based on the well-pleaded complaint doctrine. 30. The Tribe is attempting to invoke federal question jurisdiction based on their defense that Everglades claims are preempted by federal law. See DE #1 2(a) ( [t]he claims in the complaint are governed by pre-emptive federal law pertaining to the long term Lease of Indian lands. ). The Tribe s claim of preemption is based on its contention that the Secretary of the Interior never approved the Lease and, therefore, the Lease is void ab initio and the rights and duties of the parties are governed solely by federal law. Id. 2(f). 31. As a threshold matter, Everglades disputes the Tribe s unsupported contention that the Secretary of the Interior never approved the subject Lease. In fact, the signature page of the Lease attached to Everglades Complaint provides APPROVED: U.S. DEPARTMENT OF THE INTERIOR, BUREAU OF INDIAN AFFAIRS, SEMINOLE AGENCY. Moreover, the 10
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 11 of 13 Tribe misled Everglades to believe the Lease had been approved by the Secretary/BIA since it represented that BIA approval of the Lease will trigger the NEPA process and the parties worked together during the NEPA process, which indicated, per the Tribe s own representations, the Lease had been approved and that only NEPA approval remained outstanding. 32. But even assuming arguendo the Secretary did not approve the Lease, such fact does not render Everglades state-law contract claims subject to federal jurisdiction. 33. As set forth herein, the law is well-settled that a federal preemption defense does not make a case based on state-law claim removable, even if the validity of the preemption defense is the only issue to be resolved. See e.g. Ramirez, 119 F.Supp.2d at 1309. 34. Thus, the Tribe s Notice of Removal (DE #1) is facially deficient in that it does not provide a basis for the Court to exercise federal question jurisdiction. Everglades Complaint, attached as Exhibit A to the Tribe s Notice of Removal (DE #1), clearly asserts only state-law contract claims. The fact that a dispute arises with an Indian tribe involving Indian property or contracts does not automatically mean there is federal question jurisdiction. See Veeder, 864 F.Supp. at 898 (citing Tamiami Partners, Ltd. supra). 35. Just as in Caterpillar, Inc. and Graham supra, where the defendants sought removal based on their contention the plaintiff s state law claims were preempted by federal law, the Tribe removed this action solely on the basis of federal preemption. However, the Supreme Court in Caterpillar, Inc. and Graham, as well as the Eleventh Circuit in Blab T.V. Mobile, Inc. supra, clearly held that state law claims cannot be removed to federal court based on a federal preemption defense, even if it would provide a complete defense to the plaintiff s claims and even if both parties concede federal preemption is the only issue to be determined in the case. 11
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 12 of 13 36. Moreover, the Lease provides the Tribe consents to jurisdiction in state court. See Lease 53 F. (providing that the Tribe consents to the jurisdiction of the United States District Court for the Southern District of Florida or the 17th Judicial Circuit in and for Broward County, Florida. ). 37. Ultimately, the Tribe has fallen woefully short of meeting its burden to demonstrate the existence of federal question jurisdiction. 38. Based on the above-cited authorities and the guiding principles regarding removal and remand: (1) the presumption against federal court jurisdiction; (2) that removal statutes must be narrowly construed; (3) that all uncertainties must be resolved in favor of remand; and (4) that the plaintiff is the master of the complaint and may choose its forum, the Court must remand this action to the Seventeenth Judicial Circuit, in and for Broward County, Florida. 39. Everglades reserves its right to seek attorney s fees and costs pursuant to 28 U.S.C. 1447(c) and requests the Court retain jurisdiction for that limited purpose. See Montgomery & Larmoyeux v. Philip Morris, Inc., 19 F.Supp.2d 1334, 1336-37 (S.D. Fla. 1998) (holding that a remand order does not divest the district court of its jurisdiction to consider the collateral matter of attorney s fees and costs; the court has jurisdiction to consider an award of attorney s fees post-remand. ). WHEREFORE, Plaintiff, EVERGLADES ECOLODGE AT BIG CYPRESS, LLC, requests the Court remand the instant action to the Seventeenth Judicial Circuit, in and for Palm Beach County, Florida, retain limited jurisdiction to award attorney s fees and costs pursuant to 28 U.S.C. 1447(c) and grant any additional relief the Court deems just and proper. 12
Case 0:11-cv-60839-MGC Document 16 Entered on FLSD Docket 05/18/2011 Page 13 of 13 CERTIFICATE OF SERVICE I hereby certify that on May 18, 2011 I electronically filed the foregoing document with the Clerk of the Court using CM/ECF. I also certify that the foregoing document is being served this day on: Donald A. Orlovsky (counsel for Defendant), Kamen & Orlovsky, P.A., 1601 Belvedere Road, Suite 402, West Palm Beach, FL 33401 in the manner specified, either via transmission of Notices of Electronic Filing generated by CM/ECF or in some other authorized manner for those who are not authorized to receive electronically Notices of Electronic Filing. /s/ J. Michael Burman, Esquire J. MICHAEL BURMAN, ESQ. Florida Bar No. 136214 jmb@bclclaw.com MICHAEL J. PIKE, ESQ. Florida Bar #617296 mpike@bclclaw.com BURMAN, CRITTON, LUTTIER & COLEMAN, LLP 303 Banyan Blvd., Suite 400 West Palm Beach, FL 33401 561/842-2820 Phone 561/515-3148 Fax (Counsel for Plaintiff) 13