Opinion
No. X03 CV 03 4000287
May 2, 2005
This action arises out of an alleged breach of contract caused by the defendants, the Historic Eastern Pequot Tribe, a.k.a. Eastern Pequot Tribal Nation (Historics); Eastern Pequot Indians of Connecticut, Inc., a.k.a. Eastern Pequot Tribe (Easterns); Mark R. Sebastian; Marcia Jones-Flowers a.k.a Marcia Flowers; Lynn D. Powers; Ronald M. Jackson; Joseph A. Perry, Jr.; Katherine H. Sebastian; William O. Sebastian, Jr.; Mary B. Sebastian; and Lewis E. Randall, Sr. (Eastern councillors). The plaintiff, Amalgamated Industries, Inc., filed an eighteen-count complaint on July 10, 2003, alleging, inter alia, breach of contract (counts one though five), conversion (count six), breach of implied covenant of good faith and fair dealing (count seven), tortious interference with contract (count eight), tortious interference with business relations (count nine), commercial disparagement (count ten), civil conspiracy (count eleven), and violations of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. (count twelve). The plaintiff also sets forth five alternative claims against the defendants. As alternative grounds for recovery against the Historics, the plaintiff claims successor liability (count fourteen), breach of implied contract (count sixteen), quantum meruit/unjust enrichment (count seventeen), and promissory estoppel (count eighteen). As its remedies, the plaintiff seeks a mandatory injunction (count thirteen), reformation of contract (count fifteen), specific performance, a prohibitive injunction, money damages, punitive damages, attorneys fees and costs, reimbursement of sums paid for and on behalf of the defendants; and imposition of a constructive trust (count seventeen).
Although the Paucatuck Eastern Pequot Tribal Nation (PEPs), Eastern Capital Development LLC f.k.a Eastern Capital Funding, LLC, Eugene R. Young, Jr., James L. Williams, Sr., James A. Cunha, Jr., Beverly Kilpatrick, Frances M. Young, Agnes E. Cunha, Gina M. Hogan and Christine C. Meisner (PEP councillors) were also named as defendants, they are not parties to this motion to dismiss. Accordingly, unless otherwise specified, all references herein to the defendants are to the Historics, Easterns and/or the Eastern councillors.
Although the defendants have moved to dismiss counts one, two, three, seven, eight, nine, ten, eleven, twelve, thirteen, fourteen, fifteen, sixteen, seventeen and eighteen of the complaint, counts thirteen and fifteen are not proper counts because they do not contain separate and distinct claims. See Practice Book § 10-26 (separate and distinct causes of action, as distinguished from separate and distinct claims for relief, shall be pleaded in separate counts). Accordingly, counts thirteen and fifteen will not be addressed in considering this motion to dismiss because they may be more properly addressed by a motion to strike.
Counts one through three, count seven, and counts twelve through eighteen are directed against the Historics, Easterns and Paucatuck Eastern Pequot Tribal Nation (PEPs). Counts four and five are directed against the individual PEP councillors. Count six is directed against Eastern Capital Development, LLC (ECD). Counts eight and eleven are directed against ECD, Eugene R. Young, Jr. and the individual Eastern councillors. Counts nine and ten are directed against ECD, Mark R. Sebastian, Ronald M. Jackson and Eugene R. Young, Jr.
The defendant Historics, Easterns and Eastern councillors have moved to dismiss counts one, two, three, seven, eight nine, ten, eleven, twelve, thirteen, fourteen, fifteen, sixteen, seventeen and eighteen of the complaint on the grounds that the court lacks subject matter jurisdiction to consider the plaintiff's claims because these claims (1) have not ripened into an actual controversy, (2) are dependent upon a political determination committed to another branch of government and (3) are barred by principles of tribal sovereignty and tribal sovereign immunity.
In the complaint, the plaintiff alleges the following relevant facts: The plaintiff "partnered" with the defendant PEPs, an Indian tribe recognized by the state of Connecticut, in the PEPs' project to become a federally recognized Indian tribe. (Complaint, ¶¶ 1, 2 and 16.) In exchange for the PEPs' promises to pay the plaintiff according to the terms of their written agreements, the plaintiff, inter alia, "spent over ten years assisting, guiding and strategizing day to day with the [PEPs] Tribal Council regarding, among other things, the [PEPs'] efforts to become officially recognized by the United States government" (Complaint, ¶ 2); provided the PEPs with "valuable business and financial advice and council"; introduced the PEPs to, garnered support from, and assisted in negotiations with "world class developers and financial partners." (Complaint, ¶¶ 2 and 3.) The plaintiff and others "funded more than fourteen million dollars to pay for the numerous academic, legal and other experts necessary to prepare a competent federal recognition petition, as well as all [PEP] [t]ribal salaries, offices and operations." (Complaint. ¶ 4.)
In exchange for the plaintiff's assistance, the PEPs "agreed to compensate [the plaintiff] by paying it amounts equal to a small percentage of any future gaming proceeds, and of any financing originated for the [PEPs]." (Complaint, ¶ 8.) The PEPs "also wanted a right of first refusal to meet or best any acceptable financing otherwise arranged for the [PEPs]." (Complaint, ¶ 8.)
"To reflect [the plaintiff's] acceptance and performance of increasing responsibilities with the [PEPs], and to reflect the [PEPs'] desire that [the plaintiff] continue its work, the [PEP] [t]ribal [c]ouncil by unanimous [r]esolution dated January 12, 1999, authorized a Restated Agreement and a separate Restated Capital Fee Agreement [(Amalgamated Agreements)] with [the plaintiff]." (Complaint, ¶ 56.) This resolution "authorized Grand Chief Sachem Williams to execute the Amalgamated Agreements on the [PEPs'] behalf, which he did (Complaint, ¶ 57.) Each PEP councillor signed this resolution and "individually signed their agreement to the Amalgamated Agreements before a notary, acknowledging that [the plaintiff] had performed all its obligations to earn, and had earned, all the compensation detailed in the Amalgamated Agreements." (Complaint, ¶ 58.) `The Restated Agreement also provides that the [PEPs] will pay additional compensation for [the plaintiffs] efforts for the period from the date the [PEPs'] petition was placed on active status until the [PEPs become] federally recognized." (Complaint, ¶ 60.)
The plaintiff also includes in its complaint a lengthy recitation of facts that was allegedly part of the Restated Agreement, which includes the following statements: "WHEREAS, because the [t]ribe lacked funds, [the plaintiff] financed many [t]ribal governmental and other activities, as well as substantial portions of the [t]ribal government's federal recognition project; and . . . WHEREAS, [the plaintiff] . . . at its own expense flew in gaming [i]ndustry experts as well as persons and entities with established backgrounds in either the gaming industry or structuring large and/or sophisticated investment packages . . . and . . . WHEREAS, due to the [t]ribe's historic lack of an economic base, it could offer [the plaintiff] no consideration other than the possibility of payment if the [t]ribal government, through [the plaintiff's] intervention, succeeded in its lengthy, expensive, time-consuming and highly speculative project to pursue federal recognition and economic development . . ." (Complaint, ¶ 62.)
The plaintiff further alleges the following with regard to compensation: The PEPs agreed to pay the plaintiff five percent of the net revenues of the PEPs' gaming activities, as well as an additional five percent of any and all other PEP tribal economic activities in which the plaintiff participates, "paid quarterly over a period of fifteen (15) years, commencing thirty (30) days subsequent to the first quarter of operation of a casino gaming facility." (Complaint, ¶ 63.) The PEPs also agreed to pay the plaintiff "as presently earned and payable, `additional compensation' for continuing to advise and assist until the date the [PEPs'] petition was placed on active status," 0.625 percent "of gross revenues of any and all gaming and related gaming facility activities . . . paid quarterly as an operating expense, for a period of [eighty-four] months, commencing thirty (30) days subsequent to the first quarter of operation of a casino gaming facility." (Complaint, ¶ 64; see also Complaint, ¶ 65.) The plaintiff further alleges that the Restated Agreement provides that "if the [PEPs] . . . for any reason other than [the plaintiff's] gross misconduct, prevents [the plaintiff] from completing its performance to earn additional compensation for the period from the date the [PEPs'] [p]etition was placed on active status until the [PEPs are] federally recognized, this entire additional compensation amount also is immediately earned and payable as a debt of the [PEPs] in its entirety." (Complaint, ¶ 66.) Further, the plaintiff alleges that the PEPs agreed in the Restated Capital Fee Agreement to pay the plaintiff two percent "of all sums procured, originated or financed by or through any source for the [PEPs], for a period from the date the [PEPs] first associated with [the plaintiff] and ending [ninety-six] months subsequent to the date the [PEPs receive] final federal recognition." (Complaint, ¶ 67.)
In the Amalgamated agreements, the PEPs "purposefully, intentionally, expressly and unequivocally waived, as to the subject matter of its agreements with [the plaintiff], any and all sovereign immunity it had or may have at any time in the future." (Complaint, ¶ 69.) Further, the PEPs expressly and unequivocally consented to submit to the jurisdiction of the United States District Court for the District of Connecticut and the courts of the state of Connecticut. (Complaint, ¶ 70; see Complaint, exhibit B, ¶¶ 7.a. and 7.b.; Complaint, exhibit C, ¶¶ 3.a. and 3.b.)
The Easterns, "at various relevant times claimed to be part of the [PEPs] that shared the state reservation located in New London County, Connecticut, and at other times held themselves out as a separate Indian tribe. The Easterns sought federal recognition separately from the [PEPs]." (Complaint, ¶ 18.) The Historics consist of the PEPs and the Easterns. (Complaint, ¶ 20.)
On July 1, 2002, the Assistant Secretary of the Interior for Indian Affairs "determined that the [PEPs] and the Easterns equally and together comprise the Historic Tribe that qualifies for federal recognition." (Complaint, ¶ 22; see Complaint, ¶ 87.) The court notes that, in rendering its decision, the BIA determined that both groups "had derived in recent times from the historical Eastern Pequot Tribe which had existed continuously since first sustained contact with Europeans . . . This determination does not merge two tribes, but determines that only a single tribe exists which is represented by two petitioners." Final Determination to Acknowledge the Historical Eastern Pequot Tribe, 67 Fed.Reg. 44, 234, 44, 235 (Bureau of Indian Affairs July 1, 2002). The BIA's determination was to become final after ninety days from the date of publication, unless a request for reconsideration was filed. 67 Fed.Reg. 44, 240; 25 C.F.R. § 83.11. The BIA's determination is "currently pending appeal." (Complaint, ¶ 87; see Complaint, Count Seventeen, ¶ 189.)
Shortly after the BIA issued its determination, the defendant Historics "approved an interim Historic [t]ribal constitution in January 2003 authorizing a [j]oint [i]nterim [t]ribal [c]ouncil composed of [five PEPs] and [nine Easterns], with a quorum of ten, thereby allowing either side to prevent a quorum if necessary to protect their rights and interests." (Complaint, ¶ 92.) The defendant PEPs "chose its five [j]oint [t]ribal [c]ouncil members from among the nine members of the [PEP] [t]ribal [c]ouncil, which continues to control internal [PEP] matters." (Complaint, ¶ 93.) The defendants "ECD, Mark R. Sebastian and others advised the [j]oint [i]nterim [t]ribal [c]ouncil that it could pick and choose among backers, notwithstanding written agreements with them, and void the agreements with [the plaintiff] and Trump [i.e., Donald Trump, Trump Hotels and Casino Resorts Development Company, LLC, and Seven Arrows Investment and Development Corp.] without cause or justification." (Complaint, ¶ 95.) The defendant "ECD also demanded that the [j]oint [i]nterim [t]ribal [c]ouncil not meet with [the plaintiff]." (Complaint, ¶ 96.) Defendants "ECD, Mark Sebastian and others advised the [Historics'] [j]oint [i]nterim [t]ribal [c]ouncil to breach its agreements with [the plaintiff] and Trump." (Complaint, ¶ 98.)
In March 2003, defendant Eugene R. Young, Jr., a PEP councillor and councillor on the joint interim tribal council, called the plaintiff and stated "that he wanted a `bonus,' and demanded that either Trump or [the plaintiff] immediately pay him ten thousand dollars . . ." (Complaint, ¶¶ 101-02.) Young also "demanded from both [the plaintiff] and the [PEPs'] attorney that he receive a substantial increase in his annual salary as a [t]ribal [c]ouncil member." (Complaint, ¶ 104.) "Young further stated that `[t]hings have changed on the council, and I have the power now,' and threatened that [the plaintiff] and Trump would be `out' and ECD would be `in' if [the plaintiff] and Trump failed to meet his demands for money." (Complaint ¶ 106.) The plaintiff was later told that "Young went to Mark Sebastian and other Eastern members of the [j]oint [i]nterim [t]ribal [c]ouncil to request protection from any administrative action by the [PEP] [t]ribal [c]ouncil, and was promised their protection." (Complaint. ¶ 115.)
"In March 2003, with Eugene Young providing a quorum, the Eastern members of the [j]oint [i]nterin [t]ribal [c]ouncil voted to breach the Amalgamated and Trump [a]greements in favor of ECD." (Complaint, ¶ 118.) In May 2003, defendant "Marcia Flowers, an Eastern member and the [j]oint [i]nterim [t]ribal [c]ouncil chair, delivered separate letters to [the plaintiff] and Trump on behalf of the [j]oint [i]nterim [t]ribal [c]ouncil, terminating the [Historics'] relationship with each." (Complaint, ¶ 119.) At that time, the plaintiff had "completed all its obligations under the Amalgamated [a]greements." (Complaint, ¶ 120.)
The plaintiff commenced this suit by service of process on the various defendants on July 9, 2003. (Marshal's returns.) On May 19, 2004, the defendants Historics, Easterns and Eastern councillors filed a motion to dismiss counts one, two, three, seven, eight, nine, ten, eleven, twelve, thirteen, fourteen, fifteen, sixteen, seventeen and eighteen, accompanied by a memorandum in support as required by Practice Book § 10-31. In response to the defendants' motion to dismiss, the plaintiff filed a memorandum in opposition on August 19, 2004. Additional facts will be set forth where appropriate.
With regard to this motion to dismiss, the parties filed numerous documents in addition to those mentioned above, including the plaintiff's " STATEMENT OF UNDISPUTED FACTS" and " OBJECTIONS TO EXHIBITS AND PORTIONS OF INDIAN DEFENDANTS' MOTIONS TO DISMISS AND SUPPORTING MEMORANDUMS" filed on August 19, 2004, the AFFIDAVIT OF MARCIA J. FLOWERS In Re: MOTION TO DISMISS — MAY 19, 2004" filed on September 8, 2004, the plaintiff's " HEARING MEMORANDUM AS TO INDIAN DEFENDANTS' CITED CASES" filed on September 10, 2004, the plaintiff's " POST HEARING MEMORANDUM TO CLARIFY MISTATEMENTS IN HEARING ON MOTIONS TO DISMISS" filed October 6, 2004, the plaintiff's " POST HEARING MEMORANDUM REGARDING `FACTION' ARGUMENTS IN THE INDIAN DEFENDANTS' MOTIONS TO DISMISS" filed October 18, 2004, and the defendant Historics' " REPLY TO AMALGAMATED INDUSTRIES' POST-HEARING MEMORANDA" filed December 13, 2004. These have all been considered by the court in rendering its decision with regard to this motion to dismiss.
I STANDARD OF REVIEW CT Page 8158
"The standard of review of a motion to dismiss is . . . well established. In ruling upon whether a complaint survives a motion to dismiss, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Dyous v. Psychiatric Security Review Board, 264 Conn. 766, 773, 826 A.2d 138 (2003). "When a [trial] court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light." (Internal quotation marks omitted.) Martin v. Brady, 261 Conn. 372, 376, 802 A.2d 814 (2002)."Jurisdiction of the subject-matter is the power [of the court] to hear and determine cases of the general class to which the proceedings in question belong." (Internal quotation marks omitted.) New England Pipe Corp. v. Northeast Corridor Foundation, 271 Conn. 329, 334, 857 A.2d 348. "[A] reviewing court should indulge every presumption in favor of the trial court's subject matter jurisdiction." (Internal quotation marks omitted.) Amore v. Frankel, 228 Conn. 358, 374, 636 A.2d 786 (1994). "[T]he doctrine of sovereign immunity implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss." Gordon v. H.N.S. Management Co., 272 Conn 81, 92, 861 A.2d 1160 (2004).
"[I]t is the burden of the party who seeks the exercise of jurisdiction in his favor . . . clearly to allege facts demonstrating that he is a proper party to invoke judicial resolution of the dispute." (Internal quotation marks omitted.) St. George v. Gordon, 264 Conn. 538, 544-45, 825 A.2d 90 (2003). "The plaintiff bears the burden of proving subject matter jurisdiction, whenever and however raised." Fink v. Golenbock, 238 Conn. 183, 199 n. 13, 680 A.2d 1243 (1996).
II JUSTICIABLITY
The defendants contend that the plaintiff's claims are not justiciable because (1) they are dependent upon a political determination committed to the BIA and (2) they have not ripened into an actual controversy. The court disagrees.
"Because courts are established to resolve actual controversies, before a claimed controversy is entitled to a resolution on the merits it must be justiciable . . . Justiciability requires (1) that there be an actual controversy between or among the parties to the dispute . . . (2) that the interests of the parties be adverse . . . (3) that the matter in controversy be capable of being adjudicated by judicial power . . . and (4) that the determination of the controversy will result in practical relief to the complainant . . . As [the Supreme Court has] recognized, justiciability comprises several related doctrines, namely, standing, ripeness, mootness and the political question doctrine, that implicate a court's subject matter jurisdiction and its competency to adjudicate a particular matter." (Citations omitted; internal quotation marks omitted.) Office of the Governor v. Select Committee of Inquiry, 271 Conn. 540, 568-69, 858 A.2d 709 (2004).
A Political Question
The defendants contend that the plaintiff's claims are dependent on a political determination and are therefore beyond this court's jurisdiction. They argue that the plaintiff seeks damages based on gambling revenue to be generated by a federally recognized tribe. They argue that acknowledgment of an Indian tribe for federal benefits such as the right to operate a gaming facility is a political question committed by Congress exclusively to the BIA. They further maintain that the determination of whether the Easterns and/or the PEPs are a dependent sovereign nation that is entitled to operate a casino gaming facility requires specialized agency expertise and reflects Congress' intent that recognized status be determined through the administrative process.
The plaintiff argues that its claims are not dependent upon any political determination. It contends that recognition of Indian tribes does not lie exclusively with the federal government and federal acknowledgment proceedings do not control the state's recognition of tribes or preempt state courts from adjudicating issues regarding state-recognized tribes. It maintains that any political determination whether to acknowledge an Indian tribe under federal law is irrelevant to this court's adjudication of the plaintiffs state law claims against a state-recognized Indian tribe.
"The political question doctrine itself is based on the principle of separation of powers . . . as well as the notion that the judiciary should not involve itself in matters that have been committed to the executive and legislative branches of government. To conclude that an issue is within the political question doctrine is not an abdication of judicial responsibility; rather, it is a recognition that the tools with which a court can work, the data which it can fairly appraise, the conclusions which it can reach as a basis for entering judgments, have limits . . . Whether a controversy so directly implicates the primary authority of the legislative or executive branch, such that a court is not the proper forum for its resolution, is a determination that must be made on a case-by-case inquiry.
"In considering whether a particular subject matter presents a nonjusticiable political question, [the Supreme Court has] articulated a number of relevant factors, including: a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question. Unless one of these formulations is inextricable from the case at bar, there should be no dismissal for nonjusticiability on the ground of a political question's presence . . . Furthermore, simply because the case has a connection to the political sphere [is not] an independent basis for characterizing an issue as a political question . . ." (Citations omitted; internal quotation marks omitted.) Office of the Governor v. Select Committee of Inquiry, supra, 271 Conn. 572-74. As discussed, infra, none of these factors regarding nonjusticiable political questions is inextricably linked to the present case.
In the context of a civil case, the courts of this state have not held that recognition of a group as an Indian tribe by the state is a nonjusticiable political question. In State v. Sebastian, 243 Conn. 115, 134, 701 A.2d 13 (1997), the court considered "whether a state court may exercise criminal jurisdiction over an Indian who is a member of a tribe that has not been acknowledged by the executive or legislative branches of the federal government." In that case, the Supreme Court held, inter alia, that "the decision to acknowledge a tribe federally for criminal jurisdictional purposes is a political question"; id., 139; but did not address the issue of whether state tribal recognition is a nonjusticiable political question in the context of a civil dispute. (Emphasis in original.) In Sebastian, the defendant's motion to dismiss asserted federal preemption under the Indian Civil Rights Act of 1968, 25 U.S.C. §§ 1301- 1341, which deprives state courts of jurisdiction to prosecute members of federally recognized tribes for crimes committed on tribal land. State v. Sebastian, supra, 243 Conn. 132. In this case, federal recognition is relevant only to the plaintiff's claims pertaining to casino revenue, not to the defendants' sovereign immunity defense. State recognition alone is sufficient to support that defense, in the absence of a clear and unequivocal waiver by the tribe or congressional abrogation. See First American Casino v. Eastern Pequot Nation, Superior Court, judicial district of New London, Docket No. 541674 (July 15, 2001, Robaina, J.) ( 30 Conn. L. Rptr. 107) ("[f]ederal recognition of a tribe is not required for the tribe to assert sovereign immunity"), and cases cited therein; Kizis v. Morse Diesel International, Inc., 260 Conn. 46, 53, 794 A.2d 498 (2002). The Sebastian holding, therefore, is inapplicable to the issue of whether this court has jurisdiction over civil claims action against defendants who assert the defense of tribal sovereign immunity under state law.
In Schaghticoke Tribal Nation v. Harrison, 264 Conn. 829, 836, 826 A.2d 1102 (2003), the Supreme Court rejected "the defendant's claim that . . . the federal government has preempted the field of determination of tribal status of Native American groups . . ." Moreover, it rejected the defendant's assertion "that federal recognition of some tribes precludes state recognition of additional tribes not recognized by the federal government and, therefore, precludes the trial court from determining whether [a party] is in fact the tribe recognized by the state under § 47-63." Id., 836-37. Further, it held that "the fact that the plaintiff has petitioned the [BIA] for federal recognition does not, by itself, render the present case not ripe or otherwise not justiciable." Id., 837.
General Statutes § 47-63 provides in relevant part, "`Indian' means a person who is a member of any of the following tribes, Paucatuck Eastern Pequot, Mashantucket Pequot, Schaghticoke, Golden Hill Paugussett and Mohegan . . ."
In State of Alaska v. Native Village of Venetie, 856 F.2d 1384, 1387 (9th Cir. 1988), the United States Court of Appeals explained that the absence of federal recognition is not conclusive evidence of tribal status. "If the [Indian Reorganization Act of 1934, 25 U.S.C. § 461 et seq. (IRA)] does not settle the matter, the inquiry would shift to whether [the Historics or Easterns have] been otherwise recognized as a tribe by the federal government . . . Failing there, tribal status may still be based on conclusions drawn from careful scrutiny of various historical factors . . .
"Once tribal status is determined, other considerations arise. The sovereign immunity that naturally flows from tribal sovereignty will not be effective if it has been divested by Congress or otherwise lost by implication . . . Nor will it be effective if it was waived during incorporation under the IRA . . . And even if the tribe and its instrumentalities are immune, the individual officers of the tribe will not be immune unless they were acting in their representative capacity and within the scope of their authority." (Citations omitted; internal quotation marks omitted.) Id. In the absence of a final determination by the federal government, recognition of Indian tribes, therefore, is not a political question and may be determined by the court. Accordingly, the court rejects the defendants' contention that the subject matter of the claims against them involves a nonjusticiable political question.
B Ripeness
The defendants next assert that the plaintiff's claims are not ripe for adjudication and that the court, therefore, lacks subject matter jurisdiction. They argue that there is no actual and existing controversy between the parties because the plaintiff's claims dependent rely upon its contract with the PEPs and its entitlement to damages depends upon federal recognition of the PEPs by the BIA. They also argue that the plaintiff's claims to casino gaming revenue are contingent on the PEPs' rights to operate a casino pursuant to the Indian Gaming Regulatory Act, 25 U.S.C. § 2703(5)(A), which, in turn, are contingent on federal recognition and regulatory approval. They contend that unless the PEPs are recognized by the BIA as a distinct tribe and granted the right to operate a casino, the plaintiff will not have any rights to casino gaming revenue. They further contend that additional regulatory approval would have to be obtained. They note that class III gaming ordinances must be approved under the Indian Gaming Regulatory Act, 25 U.S.C. § 2710(d)(1)(A), and that a state compact would have to be negotiated by the governor and ratified by the General Assembly with the consent of the Mashantucket Pequot and Mohegan Indians pursuant to their state compacts in accordance with General Statutes § 3-6c. They argue that before these conditions are met, the plaintiff has no enforceable contractual right to "a percentage of all gaming and gaming facility activities." They maintain that because the plaintiff's claims are contingent on several events that have yet to occur, they are entirely speculative, premature and not ripe for adjudication and that the court, therefore, lacks subject matter jurisdiction over such claims.
25 U.S.C. § 2710(d)(1)(A) provides in relevant part, "Class III gaming activities shall be lawful on Indian lands only if such activities are —
(A) authorized by an ordinance or resolution that —
(i) is adopted by the governing body of the Indian tribe having jurisdiction over such lands,
(ii) meets the requirements of subsection (b) of this section, and
(iii) is approved by the Chairman . . ."
General Statutes § 3-6c provides in relevant part, "Within ten days after the date of execution of any compact . . . between the state of Connecticut and . . . an Indian tribe, the Governor shall file such compact . . . with the clerks of the House of Representatives and the Senate. The General Assembly may approve such compact . . . in whole, by a majority vote of each house or may reject such compact or amendment, in whole, by a majority vote of either house . . ."
The plaintiff argues that its claims are ripe for adjudication and that the court has jurisdiction to consider them. It argues that an actual controversy exists because its claims are not contingent upon federal acknowledgment of the PEPs. Relying on O'Halloran v. Charlotte Hungerford Hospital, 63 Conn.App. 460, 465-66, 776 A.2d 514 (2001), it argues that the requirement that there be an "actual controversy" requires only a "colorable claim of direct injury," which "need not be great." It maintains that its claim that it is entitled to compensation under written agreements after working over ten years and providing millions of dollars satisfies this requirement. It contends that under the restated capital fee agreement, the plaintiff is entitled to two percent of sums procured, originated or financed by or through any source for the tribe, and, under the right of first refusal, to meet or best any acceptable financing otherwise arranged. It further contends that all of its performance is completed and that all compensation is presently earned and payable as a debt of the tribe, prior to any federal acknowledgment.
The plaintiff also argues that the contract possesses value outside the specific terms of the agreement. As an example, it notes that the agreements contain provisions allowing the transfer of all or a portion of the plaintiff's interest therein. It argues that "[n]o compensation under the Restated Agreement references tribal gaming other than in part, and then does so simply as a measurement, and never as a requirement or contingency." (Plaintiff's memorandum filed 8/19/04, p. 14.) It also notes that the Restated Agreement provides for alternative compensation if the PEPs never engage in gaming, which would require the PEPs to pay the plaintiff an amount based on an estimate of what the gaming proceeds would have been. Finally, relying on Connecticut General Life Ins. Co. v. Zurich American Life Ins. Co., Superior Court, judicial district of New Britain, Complex Litigation Docket, Docket No. CV X03 01 0510268 (March 28, 2003, Peck, J.) ("[t]hat the liability may be contingent does not necessarily defeat jurisdiction of a declaratory judgment action"), it contends that its claim for specific performance is essentially the same as a declaratory judgment action, which contingent liability does not defeat.
Paragraph 5.a. of the Restated Agreement provides, "If the Tribe does not establish gaming for any reason, the Tribe and Amalgamated agree, that as Amalgamated's Alternative Primary Compensation for prior services rendered hereunder by Amalgamated, the parties shall then enter into agreements that shall provide Amalgamated with equivalent amounts as would have been paid to Amalgamated through gaming, to be paid in a manner and over a time which would be reasonable to both the Tribe and Amalgamated from all economic activities, provided also that both the Tribe and Amalgamated receive a fair and equitable return." (Emphasis added.)
"In light of the rationale of the ripeness requirement, to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements . . . [the court] must be satisfied that the case before [it] does not present a hypothetical injury or a claim contingent upon some event that has not and indeed may never transpire." (Citation omitted; internal quotation marks omitted.) Esposito v. Specyalski, 268 Conn. 336, 346, 844 A.2d 211 (2004).
The court finds that the plaintiff's claims are ripe for adjudication. In paragraph 13 (1) of the complaint, the plaintiff alleges that the PEPs "converted to their own use and benefit opportunities gained as a result of millions of dollars of funding [the plaintiff] invested or caused to be brought to the [PEPs], as well as its more than ten years of assisting day to day, at the [PEPs] [c]ouncil's behest, among other things, the [PEPs'] federal recognition efforts." In paragraph 44, the plaintiff alleges that it "incurred substantial expenses and guaranteed long-term obligations on the [PEPs'] behalf, including . . . costs for personnel to assist researching the [PEP] [t]ribal history and other matters necessary to support the [PEPs'] petition for federal recognition, as well as to procure, research, review and consult potential gaming investors, developers and managers, architects and construction managers for initial overviews of appropriate gaming facilities, legal fees and costs, and travel and entertainment costs. [The plaintiff] also obtained for the [PEPs'] office space and personnel necessary to facilitate the aforementioned, as well as assisted the [PEPs] in handling its day-to-day operations." In addition to agreeing to pay the plaintiff five percent of the net revenue of PEP tribal gaming activities, the PEPs also agreed to pay the plaintiff an additional five percent "of any and all other [PEP] [t]ribal economic activities in which Amalgamated participates . . ." (Complaint, ¶ 63.) The PEPs also allegedly agreed to pay the plaintiff 0.625 percent "of the gross revenues of any and all gaming and related gaming facility activities, including, but not limited to, restaurants, hotels, entertainment facilities, gift shops, and any other related activities . . ." (Emphasis added.) (Complaint, ¶¶ 64 and 65.)
In counts one, two and three, the plaintiff alleges that as a result of the defendants' breaches of contract, specifically the Restated Agreement, the Restated Capital Fee Agreement and the Right of First Refusal, the plaintiff "has suffered severe and continuing economic harm." (Complaint, ¶¶ 122-23, 128-29, 132-33.) In count seven, it alleges that the defendants breached an implied covenant of good faith and fair dealing under the Restated Agreement, Restated Capital Fee Agreement and Right of First Refusal, "injuring Amalgamated's right to receive benefits it reasonably expected to receive" under those agreements. (Complaint, ¶¶ 143-44.) Count eight includes allegations that certain defendants, including Eastern councillors Mark R. Sebastian, Marcia Flowers, Lynn D. Powers, Ronald M. Jackson, Katherine H. Sebastian, William O. Sebastian, Jr., Mary E. Sebastian, Lewis E. Randall, Sr. and Joseph A. Perry, Jr., knew of and intentionally interfered with the various agreements, causing the plaintiffs "severe and continuing economic harm and actual damages . . ." (Complaint, ¶¶ 146-148.) In counts nine and ten, the plaintiff alleges that certain defendants, including Mark R. Sebastian and Ronald M. Jackson, made disparaging statements and engaged in activity that "caused the breach of Amalgamated's written agreements, and prohibited any further business relations with Amalgamated. Amalgamated's business relationship has ceased to exist as a result of such interference." (Complaint, ¶¶ 151, 159.) It alleges that those defendants intentionally interfered with this business relationship, causing the loss of this relationship, resulting in severe and continuing economic ham and actual damages. (Complaint, ¶¶ 151-54, 160-62.) In count eleven, it alleges that these acts constitute a civil conspiracy. (Complaint, ¶¶ 164-67.)
In count twelve, the plaintiff alleges that the defendant Historics "maintain a continuous and ongoing business practice of entering agreements to induce parties to provide substantial services and/or funding of millions of dollars, and accept such substantial services and/or funding, with the intention never to honor those agreements, and/or to seek to avoid all obligations under those agreements." It alleges that these practices have caused the plaintiff "ascertainable damages." (Complaint, ¶¶ 169-71.) In counts fourteen, sixteen, seventeen and eighteen, the plaintiff sets forth several alternative theories of liability based on these allegations, namely. successor liability, breach of implied contract, quantum meruit/unjust enrichment and promissory estoppel, respectively. (Complaint, ¶¶ 176, 182-87.) Finally, in its request for relief, the plaintiff requests the court to award, inter alia, "all monetary damages to which it is entitled" and "reimbursement of sums paid for and on behalf of [the] [d]efendants . . ." (Complaint. p. 57.)
All of these claims are ripe for adjudication. They are not dependant upon federal recognition of the defendants as an Indian tribe because they are not entirely contingent on future gaming revenue. They are based, in part, on the allegations that the Easterns and individual Eastern councillors engaged in certain activities which, inter alia, caused the plaintiff to lose the use of funds that had been paid to the PEPs. The foregoing claims are also based on the allegation that the defendants damaged valuable business relationships resulting in the loss of the value of its transferrable contractual rights and the loss of future economic activities other than casino gaming. These claims are not contingent on federal recognition because the plaintiff has alleged that it has already suffered harm and that it will continue to suffer harm in the future regardless of whether the defendants successfully enter into a casino gaming enterprise.
These claims are based, in part, therefore, on claims arising from the breach of contract by the PEPs, which, the plaintiff claims in its request for relief, requires the repayment of funds that the plaintiff advanced to the PEPs pursuant to the Amalgamated agreements. The plaintiff's claims against the defendants are ripe for adjudication because they are not dependant on federal recognition of the defendants as a tribe. The court, therefore, rejects the defendants' motion to dismiss on the ground of ripeness because it has jurisdiction over the portions of those counts relating to the funds and assistance already provided by the plaintiff to the defendants. A motion to dismiss directed to counts over which the court has partial jurisdiction must be denied. See Bazzano v. Arroyo, Superior Court, judicial district of Litchfield, Docket No. CV 93 0063015 (November 2, 1993, Pickett, J.) (a motion to dismiss a single count must be denied when the court has jurisdiction over a portion of that count).
III TRIBAL SOVEREIGN IMMUNITY
The defendants argue that the plaintiff's claims against them are barred by the doctrine of sovereign immunity. They argue that suits against Indian tribes are barred unless there is a clear waiver by the tribe or an express waiver by Congress and that the Historics have not waived their immunity. They argue that the Historics are immune from the plaintiff's claims because they have been provisionally recognized by the BIA. They contend that the PEPs' contractual waiver of sovereign immunity is ineffective as to the Easterns and the Historics because the plaintiff's contract was exclusively with the PEPs and because the PEPs have not been recognized either by the state or by the federal government as a distinct tribe. They further argue that the PEPs had no authority to waive the Easterns' or the Historics' sovereign immunity because only the sovereign can waive its immunity from suit. They contend that the Historics, therefore, have not unequivocally expressed a waiver of immunity from claims arising under the plaintiff's contracts with the PEPs.The plaintiff makes several arguments against the defendants' assertion of tribal sovereign immunity. First, it argues that this matter does not infringe tribal sovereignty or implicate sovereign immunity. It contends that "because the [t]ribe exercised its sovereignty [in submitting to the jurisdiction of the state courts in its contracts with the plaintiff], the court is actually obligated to uphold the tribe's sovereignty by exercising its jurisdiction to enforce the [t]ribe's sovereign choices." (Plaintiff's memorandum filed 8/19/04, p. 22.) Nevertheless, the plaintiff also contends that the Historics are bound by the PEPs' waiver of sovereign immunity either because they are the same tribe as the PEPs with the addition of Easterns as members or because they are the PEPs' successor in interest.
A review of the case law reveals no instance in which the courts of this state have applied the principles of successor liability outside the context of the sale of a business. See, e.g., Northeast Connecticut Economic Alliance, Inc. v. ATC Partnership, 272 Conn. 14, 38, 861 A.2d 473 (2004); Lynch v. Infinity Outdoor, Inc., Superior Court, judicial district of New Haven, Docket No. CV 01 0453323 (May 7, 2003, Licari, J.). In that context, the Superior Court has held, "Under Connecticut law, a corporation which purchases the assets of another company does not automatically become liable for the debts and liabilities of its predecessor unless there exists one of four established exceptions to this general rule. Specifically, the party seeking to impose liability on the basis of de facto successorship must establish: (1) that the purchase agreement expressly or impliedly so provides; (2) there was a merger or consolidation of the two firms; (3) the purchaser is a `mere continuation' of the seller; or (4) the transaction is entered into fraudulently for the purpose of escaping liability." Lynch v. Infinity Outdoor, Inc., supra, Docket No. CV 01 0453323.
The plaintiff argues that the Historics admit in their memorandum in support of their motion to dismiss that they are the same tribe with which the plaintiff contracted. In their memorandum, the defendants note that the Historics' interim constitution "acknowledged that the Tribe was `the same Tribe referred to in . . . General Statutes as the Paucatuck Eastern Tribe . . . [§§]47-59a and 47-59b . . .'" They do not admit that they are the same tribe with which the plaintiff contracted. Moreover, the interim constitution to which the defendants refer in their memorandum does not provide, expressly or impliedly, that the defendants are liable as a successor tribe to the PEPs. Although the plaintiff has alleged that "[t]he Historic Tribe is successor in interest to the Paucatuck Tribe as to all agreements with Amalgamated, and is liable to Amalgamated for all obligations and all claims and causes of action alleged herein," such statements are legal conclusions that cannot be accepted as true for the purposes of ruling upon a motion to dismiss. Ellef v. Select Committee of Inquiry, Superior Court, judicial district of Hartford, Docket No. CV 04 0832432 (April 8, 2004, Booth, J.) ( 36 Conn. L. Rptr. 841).
In sum, the plaintiff has failed to allege sufficient facts in the complaint to support its successor liability argument. It has not alleged that the defendants purchased an interest in the PEPs, but simply that the Easterns, "at various relevant times claimed to be part of the Paucatack [t]ribe that shared the state reservation located in New London County, Connecticut, and at other times held themselves out as a separate Indian tribe. The Easterns sought federal recognition separately from the Paucatucks. The Connecticut General Statutes and [s]tate of Connecticut recognized the Paucatucks as an Indian tribe." (Complaint, ¶ 18.) The plaintiff further alleges that [t]he defendant Historic Eastern Pequot Tribe . . . consists of the Paucatuck Tribe together with the Easterns." (Complaint, ¶ 20; see Complaint, ¶ 92.) The complaint also fails to allege that the Easterns and the PEPs no longer exist as distinct groups. Further, in the BIA's decision, the Assistant Secretary noted that "[t]his determination does not merge two tribes, but determines that only a single tribe exists which is represented by two petitioners." Final Determination to Acknowledge the Historical Eastern Pequot Tribe, supra, 67 Fed.Reg. 44, 235. According to the complaint, the Historic tribe consists of all of the members of the Easterns and the PEPs. The Easterns and the PEPs apparently continue to exist as distinct subgroups; they are named as separate defendants. The Easterns are not bound by the PEPs' waiver of sovereign immunity under a theory of successor liability because the plaintiff has neither pleaded nor proved that the Historics are a successor to the PEPs. Accordingly, the Historics are not bound by the PEPs' waiver of sovereign immunity. Moreover, any waiver of sovereign immunity must be unequivocal. Assuming the Historics are entitled to sovereign immunity, the joining together of the two groups, one of which has waived its sovereign immunity, is not sufficient to constitute an unequivocal waiver of the Historics' sovereign immunity.
The plaintiff next argues that the doctrine of collateral estoppel, or issue preclusion, prohibits the defendants from arguing that the PEPs were not the state recognized tribe at the time the plaintiff entered into contacts with them, and therefore could not have bound any successor tribe. It contends that the court previously decided this issue in Sebastian v. Indian Affairs Council, Superior Court, judicial district of New London, Docket No. 028949 (November 30, 1979, Hendel, J.), which, it maintains, upheld a 1977 ruling of the Connecticut Indian Affairs Council (CIAC) determining that descendants of Tamar Brushel Sebastian, the Easterns, were not members of the state recognized tribe. The plaintiff contends that the Easterns had the opportunity to fully litigate the issue at that time, and did not appeal the court's decision. Based on this case, the plaintiff argues that the PEPs had the authority to enter into contracts and to waive sovereign immunity, "thereby subjecting itself and its agreements to state court jurisdiction and state law."
In Sebastian v. Indian Affairs Council, supra, Docket No. 028949, the court dismissed an appeal of a CIAC decision, which found that Tamar Brushell Sebastian was at least "one-half blood Eastern Pequot Indian and that all direct linear descendents of Tamar Brushell Sebastian found to have at least one-eighth percentage of her blood are recognized as members of the Eastern Pequot tribe of Indians." Contrary to the plaintiff's assertion, the CIAC had not determined that descendants of Tamar Brushell Sebastian were not members of the PEPs, but merely had placed a limitation on the number of descendants who would have qualified for membership. Further, as the defendants note, the CIAC subsequently changed its criteria to include factors in addition to blood quantum. Moreover, the General Statutes were amended in 1989 to eliminate the role of the CIAC in determining tribal membership. See Public Acts 1989, No. 89-368. Tribal membership is now determined by the tribes. See General Statutes § 47-66j(b). Collateral estoppel, therefore, does not preclude the defendants from litigating the issue of whether the PEPs were the state recognized tribe at the time the parties entered into the contracts because the CIAC decision at issue in Sebastian v. Indian Affairs Council, supra, Docket No. 028949, was superceded by statute. Nevertheless, this issue is irrelevant because, as discussed above, the Historics are not successors to the PEPs, but merely consist of the PEPs and the Easterns, which are still distinct groups that have begun to function as a single tribe. The court must now determine whether the Historics or the Easterns are entitled to the protections of sovereign immunity.
General Statutes § 47-66j(b) provides, "[a] membership dispute shall be resolved in accordance with tribal usage and practice. Upon request of a party to a dispute, the dispute may be settled by a council. Each party to the dispute shall appoint a member of the council and the parties shall jointly appoint one or two additional members provided the number of members of the council shall be an odd number. If the parties cannot agree on any joint appointment, the Governor shall appoint such member who shall be a person knowledgeable in Indian affairs. The decision of the council shall be final on substantive issues but an appeal may be taken to the Superior Court to determine if membership rules filed in the office of the Secretary of the State pursuant to this section have been followed. If the court finds that the dispute was not resolved in accordance with the provisions of the written description, it shall remand the matter with instructions to reinstitute proceedings, in accordance with such provisions.
"[A]s 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 . . . and the tribe itself has consented to suit in a specific forum . . . Absent a clear and unequivocal waiver by the tribe or congressional abrogation, the doctrine of sovereign immunity bars suits for damages against a tribe . . . However, such waiver may not be implied, but must be expressed unequivocally." (Citations omitted; internal quotation marks omitted.) Kizis v. Morse Diesel International, Inc., supra, 260 Conn. 53-54. It is axiomatic that in order to be entitled to the protections of tribal sovereign immunity, the defendants must prove that they are distinct Indian tribes.
To the extent the Historics are entitled to assert sovereign immunity, the court finds that it has not been waived because the plaintiff has not so alleged and because the Historics are not bound by the PEPs' waiver for the reasons discussed above. Nevertheless, the Historics have not been finally recognized by the state or by the federal government as an Indian tribe; the BIA's determination is pending requests for reconsideration timely filed by the state and by the towns of North Stonington, Preston and Ledyard. (Flowers Affidavit, ¶¶ 17-19.) Accordingly, the Historics are not entitled to the protections of sovereign immunity and the motion to dismiss is denied as to the counts directed to them.
Similarly, the Easterns are not entitled to sovereign immunity because they are not a distinct tribe; they have no sovereign immunity to waive. The plaintiff has not alleged that the Easterns are a separate tribe and the defendants have submitted no evidence that they have ever been recognized as such by the state or by the federal government. In the affidavit of Marcia Flowers dated September 7, 2004, Flowers states that "the [Easterns] have consistently claimed that the Tribe consists of descendants of family lines which include both the [Easterns] and the PEPs." (Flowers Affidavit, ¶ 5.) By the defendants' own affidavit, they are not entitled to the protections of sovereign immunity because they are not a tribe separate from the PEPs. Moreover, while the General Statutes contain several references to the "Paucatuck Eastern Pequot" tribe; see General Statutes §§ 47-59a, 47-59b, 47-63 and 10-382; the Easterns are not separately mentioned. Accordingly, the Easterns are not entitled to the protections of sovereign immunity. As members of a group separate from the PEPs that are not entitled to tribal status, sovereign immunity is not applicable to them. If the Easterns are in fact members of the PEPs, they cannot assert sovereign immunity because the tribe itself must assert that immunity. See Kizis v. Morse Diesel International, Inc., supra, 260 Conn. 51 n. 7.
The defendants also argue that the individual tribal councillors are entitled to sovereign immunity for the official conduct challenged by the plaintiff. They contend that tribal sovereign immunity extends to tribal officials acting in their representative capacity and within the scope of their authority. They maintain that all of the plaintiff's claims against the individual tribal councillors relate to acts within the scope of their authority as tribal councillors such as voting to select ECD and to repudiate the PEPs' contract with the plaintiff. Moreover, they argue that neither the Easterns nor the Historics were parties to any contract with the plaintiff and that they could not, therefore, repudiate what they never affirmed. For these reasons, they argue that the Eastern councillors are entitled to sovereign immunity from the plaintiff's claim.
The plaintiff counters that the individual tribal councillors cannot assert sovereign immunity because the immunity of individual tribal members cannot extend beyond that of the tribe, and the tribe has waived any and all sovereign immunity, which includes "derivative representative immunity." "Several cases have established that tribal sovereign immunity does not extend to individual members of a tribe and that the tribe itself must assert immunity. A state court does have the authority to adjudicate actions against tribal members when it properly obtains personal jurisdiction. See, e.g., Puyallup Tribe, Inc. v. Washington Game Dept., 433 U.S. 165, 173, 97 S.Ct. 2616, 53 L.Ed.2d 667 (1977); United States v. James, 980 F.2d 1314, 1319 (9th Cir. 1992), cert. denied, 510 U.S. 838, 114 S.Ct. 119, 126 L.Ed.2d 84 (1993); State v. Sebastian, [ supra, 243 Conn. 160]. The doctrine of tribal immunity [however] extends to individual tribal officials acting in their representative capacity and within the scope of their authority. Romanella v. Hayward, 933 F.Sup. 163, 167 (D.Conn. 1996). The doctrine does not extend to tribal officials when acting outside their authority in violation of state law. See Puyallup Tribe, Inc. v. Washington Game Dept., supra, 171-72." (Internal quotation marks omitted.) Kizis v. Morse Diesel International, Inc., supra, 260 Conn. 51 n. 7.
The individual Eastern councillors are not entitled to sovereign immunity. The plaintiff alleges that all Eastern councillors "participated at various relevant times as members of the Eastern [t]ribal [c]ouncil, the Easterns' governing body. All Eastern [councillor] [d]efendants are sued in their official and individual capacities." (Complaint, ¶ 19.) As members of a tribal council of a group that is not a bona fide tribe, tribal sovereign immunity cannot protect them. Accordingly, the motion to dismiss is not sustainable on the ground of tribal sovereign immunity.
IV CONCLUSION
For all the foregoing reasons, the motion to dismiss of the Historics, the Easterns and the individual Eastern councillors, is hereby denied.
BY THE COURT
PECK, J.