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WORLD TOUCH GAMING v. MASSENA MANAGEMENT

October 13, 2000

WORLD TOUCH GAMING, INC., PLAINTIFF,
V.
MASSENA MANAGEMENT, LLC AND MASSENA MANAGEMENT CORP. D/B/A PRESIDENT R.C. — ST. REGIS MANAGEMENT COMPANY AS AGENT FOR AKWESASNE MOHAWK CASINO AND AKWESASNE MOHAWK CASINO, AND ST. REGIS MOHAWK TRIBE, DEFENDANTS.



The opinion of the court was delivered by: Hurd, District Judge.

MEMORANDUM-DECISION and ORDER

Plaintiff World Touch Gaming, Inc. ("World Touch") filed the instant action on December 22, 1999, alleging breach of contract by defendants. World Touch filed an amended complaint on May 4, 2000. Defendants Massena Management, LLC; Massena Management Corp. d/b/a President R.C.-St. Regis Management Company*fn1 ("Management Company"); Akwesasne Mohawk Casino ("the Casino"); and St. Regis Mohawk Tribe ("the Tribe") move to dismiss the amended complaint for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). Plaintiff opposes the motion. Oral argument was heard on June 9, 2000, in Utica, New York. Decision was reserved.

I. FACTS

The Tribe is a federally-recognized American Indian Tribe whose lands, known as Akwesasne, were reserved to the Tribe by treaty with the United States. The Tribe is governed by its Constitution. In part the Constitution provides that "the Tribe is immune from suit except to the extent that the Tribal Council expressly waives sovereign immunity. . . ." Moreover, the Tribe's Civil Judicial Code provides, inter alia, the following:

Tribal sovereign immunity is hereby found and stated to be an essential element of self-determination and self-government, and as such will be waived by the Mohawk Tribal Council only under such circumstances as the Mohawk Tribal Council finds to be in the interests of the Tribe in promoting economic or commercial development or for other tribal purposes. Any such specific waivers of sovereign immunity as may from time to time be executed must be clear, explicit and in writing; any such waivers shall be interpreted narrowly and limited to the explicit terms of the waivers; and any such waivers shall not by implication or interpretation be extended in any manner or fashion beyond their narrow, explicit terms.

The Tribe operates a gaming enterprise, the Casino, which is a wholly owned unincorporated subsidiary of the Tribe. The Tribe operates the Casino pursuant to a gaming compact with New York State, as required by the Indian Gaming Regulation Act ("IGRA"), 25 U.S.C. § 2701-2721. The Tribe entered into an agreement with the Management Company, pursuant to which the Management Company would be the managing agent for the Tribe and operate the Casino under the supervision of the Tribe.*fn2 According to the sworn testimony of Angus N. McDonald, Executive Director of the Tribe, "The Tribe has never authorized anyone form [sic] the Casino Management to waive the Saint Regis Mohawk Tribe's sovereign immunity. Such an authorization could only be made by resolution of the Tribal Council. No such resolution exists to my knowledge." (McDonald Aff. ¶ 8.)

On May 20, 1999, after some months of selection and negotiation, World Touch and the Casino entered into agreements for the lease and purchase of gallery-style pull tab gaming machines for use in the Tribe's gaming enterprise ("the Lease Agreement" and the "Sales Agreement"). Walter Horn, Senior Vice President of the Management Company, signed the Lease and Sales Agreements as the managing agent of the Casino.

The Lease Agreement provides, inter alia, that the "Lessee [Casino] agrees to waive its Sovereign Immunity from suit to enforce the provisions of this Agreement and acknowledges that this waiver allows Lessor [World Touch] the right to pursue both legal and equitable remedies as Lessor deems necessary." The Sales Agreement provides as follows:

The parties recognize that the Tribe, being a federally recognized Indian tribe, is a sovereign entity dedicated to promoting the general welfare of its members and their descendants the blessings of liberty and freedom. Nothing in this agreement shall be construed to limit or diminish that sovereignty nor to abridge or waive any sovereign rights, privileges or immunities of the Tribe, its agencies, divisions, corporations or their respective officers and representatives. Notwithstanding the aforementioned Tribal Sovereignty the Tribe agrees to submit to the jurisdiction of the state and federal courts for the sole and limited purpose of enforcement of the obligations under this contract. .

The Casino was to lease 120 machines, and pay a twenty percent revenue sharing amount for the ninety-day term of the lease. World Touch alleges that the Casino failed to pay the June 1999 and July 1999 revenue sharing amounts when due under the Lease Agreement. While these payments were eventually made, the Casino allegedly failed to make payment of the August 1999 and September 1999 revenue sharing amounts. Additionally, World Touch alleges that the Casino is in default by its failure to purchase the leased machines after ninety days, as was required by the Lease Agreement. World Touch eventually repossessed the leased equipment. World Touch also claims that it is owed $112,236.89 by the Casino for parts and supply orders, transportation, and installation expenses, pursuant to the Lease and Sales Agreements.

For relief World Touch seeks money damages of at least $2,000,000, an accounting to determine the owed revenue sharing amounts, an injunction prohibiting operation of the machines while payment is due, and costs and attorneys fees.

II. DISCUSSION

A. Fed.R.Civ.P. 12(b)(1) Motion to ...


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