Acres Bonusing, Inc v. Marston

District Court, N.D. California·Decided April 15, 2020·No. 3:19-cv-05418·Unknown

Opinion

ACRES BONUSING, INC, et al., Case No. 19-cv-05418-WHO

Plaintiffs, ORDER GRANTING MOTIONS TO DISMISS; DENYING ANTI-SLAPP v. MOTIONS AND MOTION TO STRIKE ANTI-SLAPP MOTIONS AS MOOT LESTER MARSTON, et al., Re: Dkt. Nos. 29, 30, 31, 32, 33, 35, 38, 42, Defendants. 50

Plaintiffs James Acres and Acres Bonusing, Inc. (“ABI”) bring this malicious prosecution action against multiple lawyers, law firms, and court personnel who were involved in a previous contractual fraud case filed against plaintiffs by Blue Lake Casino & Hotel (“Blue Lake Casino”) in Blue Lake Rancheria Tribal Court. They sue three sets of defendants: (i) law firm Boutin Jones, Inc., and associated individual attorneys1, that filed the initial complaint in tribal court on behalf of Blue Lake Casino (hereinafter the “Boutin Jones” defendants); (ii) law firm Janssen Malloy LLP, and associated individual attorneys2, that replaced Boutin Jones as attorneys for Blue Lake Casino (hereinafter the “Janssen Malloy” defendants) (Boutin Jones and Janssen Malloy defendants are collectively “Attorney Defendants”); and (iii) Blue Lake Tribal Court Chief Judge Lester Marston, Court Clerk Anita Huff, two elected tribal officials3, law firm “Rapport and Marston” and

1 Michael Chase, Daniel Stouder, and Amy O'Neill.

2 Megan Yarnall and Amelia Burroughs.

3 Blue Lake Rancheria elected Vice Chair/Tribal Administrator/Tribal Associate Judge/Blue Lake associate tribal judges/attorneys4 (hereinafter the “Blue Lake Defendants”). Before me are seven dispositive motions: motions to dismiss and motions to strike for being sued for conduct protected by California’s anti-SLAPP statute, Cal. Civ. Proc. Code § 425.16, filed by each of the three sets of defendants as well as a motion to strike the anti-SLAPP motions by plaintiffs. For the reasons set forth below, I GRANT the motions to dismiss as to all three sets of defendants [Dkt. Nos. 29, 32, 33] on grounds of tribal sovereign immunity. Because I am granting the motion to dismiss on this basis, I need not address defendants’ failure to state a claim argument. I DENY the anti-SLAPP motions [Dkt. Nos. 30, 31, 50] and motion to strike the anti-SLAPP motion [Dkt. No. 38] as moot.5 The Blue Lake Rancheria is a federally recognized Tribal Nation in Humboldt County, California, and is organized under the Constitution of the Blue Lake Rancheria. Complaint (“Compl.”) [Dkt. No. 1] ¶ 9. The Blue Lake Tribal Court, which is not named as a defendant in this action, is an established judicial arm of the Tribe. Id. ¶ 11. Acres was the owner of ABI, a Nevada gaming company. Compl. ¶ 8. In 2010, Blue Lake Casino and Acres negotiated an agreement whereby Blue Lake Casino purchased an iSlot gaming system from ABI. Id. ¶ 44. In 2015, a dispute arose between them regarding the return of a $250,000 advance deposit. Id. ¶¶ 48-52. In January 2016, Boutin Jones filed a complaint in Blue Lake Tribal Court on behalf of Blue Lake Casino against ABI for contract-based claims and against Acres personally for fraudulent inducement. Id. ¶ 5; see also id., Ex. 1 (underlying complaint in Blue Lake Casino & Hotel v. Acres et al., Blue Lake Tribal Court Case No. 15- 1215IJM) (hereinafter “Blue Lake Casino v. Acres”).

4 David Rapport, Ashley Burrell, Cooper DeMarse, Darcy Vaughn, and Lathouris Kostan.

5 Boutin Jones’ motion to join and adopt Janssen Malloy’s opposition to plaintiffs’ motion to strike the anti-SLAPP motion [Dkt. No 42] is DENIED as moot. Boutin Jones’ request for judicial notice of documents related to its anti-SLAPP motion [Dkt. No. 30-2] and plaintiffs’ Boutin Jones represented Blue Lake Casino in tribal court until February 2017, when Janssen Malloy substituted into the case to serve as counsel for Blue Lake Casino. Compl. ¶¶ 27- 29, 111. Blue Lake Rancheria Tribal Court Chief Judge Marston was the original presiding judge until December 2016 when he voluntarily recused himself and Justice James N. Lambden, a retired justice from the California Court of Appeals, replaced him. Id. ¶¶ 16, 31, 104. While the tribal court case was pending, Acres filed two federal court actions asserting that the tribal court lacked jurisdiction over him. On August 10, 2016, I dismissed his initial federal action for lack of subject matter jurisdiction because he failed to exhaust tribal remedies. Acres v. Blue Lake Rancheria Tribal Court, No. 16-CV-02622-WHO, 2016 WL 4208328, at *4 (N.D. Cal. Aug. 10, 2016) (hereinafter “Acres I”). The following month, Acres and ABI filed another suit arguing that although they did not exhaust tribal remedies, the bad faith exception applies because Judge Marston did not disclose his conflicts of interest and recuse himself. Acres v. Blue Lake Rancheria, No. 16-CV-05391-WHO, 2017 WL 733114, at *1 (N.D. Cal. Feb. 24, 2017) (hereinafter “Acres II”). After granting limited discovery on the issue of bad faith, I dismissed the second federal action for failure to exhaust tribal remedies, which was affirmed by the Ninth Circuit on June 30, 2017. Acres v. Blue Lake Rancheria, 692 F. App’x 894 (9th Cir. 2017).6 The underlying tribal court case continued. In July 2017, Justice Lambden issued an order granting Acres summary judgment and dismissing him from the suit. Compl. ¶ 5 & Ex. 2. In August 2017, Justice Lambden dismissed the suit in its entirety. Id. ¶ 5 & Ex. 3. Because no notice of appeal was timely filed according to tribal law, Acres and ABI contend that ABI’s claims for wrongful use of civil proceedings are ripe and that the statute of limitations has not expired.

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