for the western district of oklahoma plaintiff, louis ... · according to oklahoma substantive law....

IN THE UNITED STATES DISTRICT COURTFOR THE WESTERN DISTRICT OF OKLAHOMA

WELLS FARGO BANK,

Plaintiff,

vs.

LOUIS MAYNAHONAH, MARQUITACARATTINI, KAREN HEMINOKEKY, intheir official capacities as members of theApache Business Committee, GENE FLUTE,RONALD AHTONE, JR., and AUSTINKLINEKOLE, in their official capacities asmembers of the Apache Gaming Commission;and RICHARD J. GRELLNER, in his officialcapacity as hearing officer for the ApacheGaming Commission

Defendants.

))))))))))))))))))

Case No. CIV-11-648-D

DEFENDANTS’ SUPPLEMENTAL BRIEF IN OPPOSITION TOPLAINTIFF’S WELLS FARGO’S EMERGENCY MOTION FOR

TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

Jon E. Brightmire, OBA No. 11623Bryan J. Nowlin, OBA No. 21310DOERNER, SAUNDERS, DANIEL

& ANDERSON, L.L.P.Two West Second Street, Suite 700Tulsa, Oklahoma 74103(918) 582-1211 (telephone)(918) 925-5290 (facsimile)[email protected] for Defendants, Louis Maynahonah, Marquita Carattini,and Karen Heminokeky in their official capacities asmembers of the Apache Business Committee

Joined by: Richard J. Grellner, OBA No. 15521434 NW 18th

Oklahoma City, OK 73103Ph: [email protected] for Ronald Ahtone, Austin Klinekole, andRichard Grellner, in their official capacities for theApache Gaming Commission

Case 5:11-cv-00648-D Document 58 Filed 08/03/11 of 22

mailto:[email protected]


ii

TABLE OF CONTENTS

Page(s)

Introduction ......................................................................................................................... 1

1. The Gaming Equipment Lease does not contemplate arbitration of tribalgaming regulation. .............................................................................................. 2

2. Wells Fargo sought exemption from the Gaming Commission’s licensingrequirements for both its financing to the Tribe and to TGS. ............................ 5

3. IGRA and the State Compact provide exclusive jurisdiction to the tribalgaming commissions to license casino vendors such as TGS. ........................... 8

4. The Apache Gaming Commission has not acted with malice or disregardfor the rights of TGS and Wells Fargo. ............................................................ 10

5. The preliminary injunction is disfavored. ........................................................ 13

6. Wells Fargo cannot prove the four elements necessary for issuance of apreliminary injunction. ..................................................................................... 14

Conclusion ..................................................................................................................... 17











iii

TABLE OF AUTHORITIES

Page(s)

Federal Cases

Casino Resource Corp. v. Harrah's Entertainment, Inc., 243 F.3d 435(8th Cir. 2001) .......................................................................................................... 9

Gaming Corp. of America v. Dorsey & Whitney, 88 F.3d 536 (8th Cir. 1998) .................. 9

Kiowa Indian Tribe of Oklahoma v. Hoover, 150 F.3d 1163 (10th Cir. 1998)................. 15

Medical Soc. of State of N. Y. v. Toia, 560 F.2d 535 (2nd Cir. 1977)............................... 14

O Centro Espirita Beneficiente Uniao do Vegetal v. Ashcroft, 389 F.3d 973(10th Cir. 2004) en banc)......................................................................................... 13

Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234 (10th Cir. 2001) ............. 15

QEP Field Services Company v. Ute Indian Tribe of Uintah and Ouray Reservation,740 F.Supp.2d 1274 (D.Utah 2010) ....................................................................... 13

Tamiami Partners, Ltd. By and Through Tamiami Development Corp. v. MiccosukeeTribe of Indians of Florida, 63 F.3d 1030, 1049 (11th Cir. 1995)......................... 10

Union Carbide Agricultural Products Co. v. Costle, 632 F.2d 1014 (2nd Cir. 1980) ...... 14

Federal Statutes

Federal Arbitration Act. 9 U.S.C. §1................................................................................. 15

25 U.S.C. § 2701 ................................................................................................................. 8

25 U.S.C. § 2710(b)(2) ........................................................................................................ 4

25 U.S.C. § 2710(d)............................................................................................................. 8

25 U.S.C. § 2710(d)(1)(A)(ii).............................................................................................. 4

25 U.S.C. § 2710(d)(2)(C)................................................................................................... 8

State Statutes

Okla. Stat. tit. 3A, §280....................................................................................................... 9

Okla. Stat. tit. 3A, §281....................................................................................................... 9


1

Defendants Louis Maynahonah, Marquita Carattini, and Karen Heminokeky, sued

in their official capacities as members of the Business Committee of Apache Tribe of

Oklahoma (“the Business Committee defendants”), joined by Defendants Ronald Ahtone,

Jr., Austin Klinekole, and Richard Grellner1, in their official capacities as members of the

Apache Gaming Commission (“the Gaming Commission” defendants) for their

Supplemental Response in Opposition to the Plaintiff’s Motion for Temporary

Restraining Order and Preliminary Injunction, and would show the Court as follows:

Introduction

This Court granted the request for temporary restraining order recognizing the

plaintiff’s interest to preserve the issues presented for extraordinary relief for further

litigation in a hearing on a preliminary injunction. The argument against injunctive relief

remains much the same and primarily a legal argument. The Tribe, exclusively, and not

Wells Fargo or TGS, may exercise regulatory jurisdiction in the Tribe’s gaming

enterprise. Wells Fargo seeks to avoid this requirement of federal, state, and tribal law

without pointing to a specific exception in IGRA but by arguing the merits of the Tribe’s

license review. The merits of the Apache Gaming Commission’s license review should

not even be before this Court, as the Gaming Commission itself has not had the

opportunity to rule upon the merits. The Gaming Commission must decide in the first

instance whether any of its licensing regulations have been met, have been violated, and

if violated whether a penalty should apply. Without the ability to both determine its own

1 Defendant Gene Flute is no longer a member of the Apache Gaming Commission. Theposition of chairman is presently vacant.


2

jurisdiction, whether violations occur, and whether penalties are warranted for any

violations, the entire regulatory framework of IGRA and the State Compact would be

violated and neutered, to the severe detriment of the Apache Tribe and all tribes

conducting gaming activities.

The Tribe will use this opportunity to submit additional briefing centered on the

following issues: (1) the Gaming Equipment Lease between the Tribe and KAGD does

not contemplate resolution of any licensing issues by private arbitrator, (2) Wells Fargo at

the time of the transaction with the Tribe did not contemplate that licensing issues would

be resolved by binding arbitration as it sought the advice and exemption of the Apache

Gaming Commission, (3) the course of performance under the Gaming Equipment Lease

did not result in the submission of a KAGD license issue to arbitration, (4) the State

Compact and federal law provides the Tribe the exclusive ability to regulate licensing

with casino vendors, and (5) Wells Fargo cannot prove the four elements required for a

preliminary injunction.

1. The Gaming Equipment Lease does not contemplate arbitration of tribalgaming regulation.

The Gaming Equipment Lease was entered into by a company known as KAGD

and the Tribe prior to Wells Fargo extending credit to either the Tribe or TGS. The

Gaming Equipment Lease was “apparently entered into six months prior” to the Wells

Fargo extension of credit to the Tribe and TGS on June 23, 2008. KAGD, which never

received any revenues from the Lease because it assigned it to TGS prior to providing

any gaming machines to the casino, obtained a license from the Apache Gaming


3

Commission. The license was obtained apparently solely for the purpose of obtaining

revenues from the casino – as KAGD was to be paid from gaming revenues as

consideration for its assignment of the Lease to TGS. See Exhibit 1, Depository

Agreement at § 3.2(f).

The Gaming Equipment Lease does not mention regulatory issues or licensing, nor

does it include licensing issues within its dispute resolution provisions. The Gaming

Equipment Lease in Section 13 recognizes the right of the Apache Gaming Commission

to regulatory fees and assessments of the Lessor in an amount of up to five thousand

dollars. [Exhibit 2, Gaming Equipment Lease at § 13]. The Lease does not state that the

granting, revocation, or suspension of a license should be submitted to binding arbitration

in line with the dispute resolution clause.

The arbitration clause within the Gaming Equipment Lease contains a qualifier

which prohibits the submission of tribal regulatory issues to private arbitration.

Subsection g of section 22 of the Lease provides:

This language specifically states that the Tribe waives tribal exhaustion only to the extent

permitted by law, which in the case of regulation of gaming is non-delegable under IGRA

and the State Compact. As a result, neither the Tribe nor KAGD could have required the

submission of regulatory disputes to private arbitration when the Lease itself

acknowledges that tribal remedies are not waived if the bypass of a tribal forum is not


4

lawful. The “Governing Law” provision of the Lease states that it is to be construed

according to Oklahoma substantive law. Exhibit 2, Gaming Equipment Lease § 20.10.

The State Compact providing for regulatory jurisdiction of the Tribe and licensing of

vendors by the Tribe is Oklahoma law. Finally, a severability clause is present in section

20.8 providing that if a provision conflicts with applicable law, the provision is severed

from the agreement. In this context, the arbitration clause as applied to tribal regulatory

issues is unenforceable and minimally should be considered severed for the purpose of

Wells Fargo’s request for injunctive relief.

Wells Fargo now contends that by executing the Gaming Equipment Lease, the

Tribe agreed to arbitrate any dispute at all regarding licensing and regulation of the

casino vendor in Indian country rather than allow the Apache Gaming Commission to

investigate and make its own determinations. The Apache Gaming Commission is not a

signatory to the Gaming Equipment Lease. The Gaming Ordinance of the Apache Tribe

of Oklahoma – as approved and published by the National Indian Gaming Commission –

does not permit the Apache Business Committee nor the Apache Gaming Commission to

delegate the Gaming Commission’s regulatory functions to private arbitrators.

The Apache Tribe cannot amend its Gaming Ordinance – through a Business

Committee vote, contract, or any other manner – without the approval of the NIGC.

IGRA requires all Indian tribes to submit tribal gaming ordinances regulating the conduct

of Class II and Class III gaming on Indian country to the NIGC for review and approval.

25 U.S.C. § 2710(b)(2); (d)(1)(A)(ii). Any suggestion that the Tribe has “contracted”

away or privatized its ability to regulate gaming to an arbitrator would expressly require


5

NIGC approval of the contract at issue as it would fundamentally alter the Tribe’s gaming

law as to that contractual counter-party (and its lender Wells Fargo Bank, N.A.). The

NIGC has not approved any amendment to the Gaming Ordinance. [Exhibit 3, Apache

Gaming Ordinance]. Wells Fargo knew this when it loaned money to the Tribe and to its

customer TGS. [Exhibit 3, Apache Gaming Ordinance]. As the NIGC has not approved

any change in the Apache Gaming Ordinance allowing the Apache Gaming Commission

to delegate its licensing functions, the Business Committee’s resolution of December 27,

2007 executing the Gaming Equipment Lease with KAGD could not effectively change

Apache law.

2. Wells Fargo sought exemption from the Gaming Commission’s licensingrequirements for both its financing to the Tribe and to TGS.

Wells Fargo requested and received exemption from the license requirements of

the Tribe pursuant to an exception within the State Compact for regulated banks to

provide financing. State Compact, Part 10(C)(4). Wells Fargo, in other words, did not

trust that the exemption was automatic but sought an affirmative statement that it was not

required to obtain a license for financing.

I can say with certainty that I won’t be allowed to rely on theConditional Waiver signed by Kevin Kean by itself todisburse funds differently than the Depository Agreement setsout. In order to be effective and compliant with the terms ofthe Depository Agreement and to adequately protect WellsFargo, any waiver or amendment of any provision of theDepository Agreement will need to be executed by all partiesto the Depository Agreement and will need to provide cleardirection (that we understand and are comfortable with) abouthow KAGD portion of funds should be “processed” prior tovalidation of the KAGD license.


6

[Exhibit 4, E-Mail String between Rob Medeiros, ScottThompson, and Fellis Gallues].

On January 15, 2009 – six months after KAGD’s license was revoked and two

weeks after TGS began placing gaming machines in the casino pursuant to the KAGD

lease, Rob Medeiros remarked about this requirement: “Wow. This could be a deal

killer.” Id. Neither Wells Fargo, TGS, nor KAGD ever suggested that the issue of

KAGD’s license be submitted to binding arbitration – as such would presumably bring

resolution to KAGD’s “license validation.”

Wells Fargo even went so far as to request that the Apache Gaming Commission

approve the Conditional Waiver previously signed by Kevin Kean. Exhibit 5,

Conditional Waiver § 5. Wells Fargo further requested and received a letter from the

Apache Gaming Commission acknowledging the acceptability of the waiver – which was

found to not violate the Tribe’s licensing requirements and the State Compact which

prohibited the payment of gaming revenues to any unlicensed vendor. Ms. Horse on

behalf of the Apache Gaming Commission wrote:


7

[Exhibit 6, AGC Letter 12/10/2008].

The Tribe’s Gaming Commission revoked the license of KAGD, LLC without

KAGD, TGS, or Wells Fargo demanding private arbitration of the dispute.

KAGD, a party to the Depository Agreement and an assignor of the Lease, never

requested arbitration of its licensing suitability. Wells Fargo never demanded for KAGD

arbitration of its licensing suitability. This is despite the fact that KAGD, the original

party to the Gaming Equipment Lease (though incidentally KAGD never performed

under the lease as Wells Fargo never intended for KAGD to perform), could have sought

to attempt to include specific language insulating KAGD or Mr. Kean from any licensing

issues.

If the KAGD Lease’s arbitration provision required any licensing dispute to be

submitted to arbitration then KAGD clearly should have sought such relief. However, the

absurdity of such a situation is obvious. The Apache Gaming Commission, like all tribal

gaming commissions, relies upon the principle of full disclosure by applicants. Mr. Kean

did not fully disclose his various gaming interests and personal history with the Apache

Gaming Commission, nor apparently with numerous tribal gaming commissions. The

Apache Gaming Commission and the National Indian Gaming Commission (in the case


8

of a management contractor) can and will deny licenses solely on the basis of failure to

disclose. When a licensee refuses to answer a question or information is obtained from

the NIGC or a sister gaming commission showing false information, the Apache Gaming

Commission is capable of immediate action to compel disclosure. If an arbitrator, rather

than a Gaming Commission, decides whether full disclosure has taken place then the

Gaming Commission loses any ability to compel full disclosure itself. Theoretically,

even a temporary license suspension would be subject to arbitration – and months if not

years of delay over something as basic as disclosure – The regulatory framework of

IGRA and the tribal gaming ordinances will be frustrated as anyone with a contract

containing an arbitration clause (such as Mr. Kean, TGS, and Wells Fargo) will demand

arbitration.

3. IGRA and the State Compact provide exclusive jurisdiction to the tribalgaming commissions to license casino vendors such as TGS.

The Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et. seq. (“IGRA”), provides

for the conduct of gaming by Indian tribes within Indian country. IGRA provides that a

compact may be negotiated between a tribal government and a state to govern the

conduct of “Class III gaming” on Indian lands. See § 2701(d). IGRA further provides

that Class III gaming activity on the Indian lands of the Indian tribe shall be fully subject

to the terms and conditions of the tribal-state compact entered into . . . by the Indian tribe

that is in effect.” 2710(d)(2)(C) (emphasis added).

In accordance with IGRA, the State of Oklahoma put to a vote of the people State

Question 712. State Question 712 proposed a model gaming compact as an offer to


9

federally recognized tribes in the State of Oklahoma to engage in Class III gaming on

tribal lands within Indian country under the terms and conditions of the proposed

compact. State Question 712 was approved and adopted by state voters on November 2,

2004. (State Question 712 has been codified at Okla. Stat. tit. 3A, § 280, and the Model

Tribal Gaming Compact is codified at Okla. Stat. tit. 3A, § 281.) As noted at the hearing

on temporary injunction the State Compact provides for licensing of casino vendors in

Part 10. The “TCA” for the Apache Tribe of Oklahoma is the Apache Gaming

Commission. The State Compact does not authorize an Indian tribe conducting class III

gaming in Oklahoma to conduct licensing by private arbitration.

Wells Fargo presents Casino Resource Corp. v. Harrah's Entertainment, Inc. as a

case suggesting that courts should analyze specific claims to determine whether those

claims interfere with a tribe’s internal governance related to gaming. The Eighth Circuit

reiterated its earlier decision in the Dorsey & Whitney decision by quoting from it:

Potentially valid claims under state law are those whichwould not interfere with the nation's governance ofgaming. To the extent a count alleges a violation of a dutyowed to one of the management companies because of anattorney-client relationship or other independent duty, it maybe a valid state law count. Resolution of such claims wouldnot appear to involve attempted discovery of communicationsby the tribe to [the firm] or the merits of the licensingdecision.

Casino Resource Corp. v. Harrah's Entertainment, Inc., 243 F.3d 435, 438 (8th Cir.

2001) (quoting Gaming Corp. of America v. Dorsey & Whitney, 88 F.3d 536, 550 (8th

Cir. 1998)) (emphasis added). Wells Fargo’s claim for injunctive relief (specifically its

claims in this action and in the TGS/Wells Fargo arbitration for injunctive relief to


10

prevent a license review hearing) should not be allowed to proceed to the extent such

claims interfere with the Tribe’s rights guaranteed by IGRA. Wells Fargo seeks to

prevent a licensing hearing from occurring at all – which by definition will interfere with

the Tribe’s ability to govern in the gaming field.

The Eleventh Circuit has explicitly held that a non-Indian doing business in Indian

country cannot bring a lawsuit under IGRA challenging a tribal gaming commission’s

failure to grant a casino license. In so holding, the Eleventh Circuit stated:

As an initial matter, we find nothing in IGRA's language thatwould give a management contractor the express right tocompel an Indian tribe to license the employees the contractordesignates to operate the gaming facility. The only expressright of action Congress gave management contractors is theright to seek judicial review in district court, under theAdministrative Procedure Act, of some Commission decisionsthat adversely affect the contractor.

Tamiami Partners, Ltd. By and Through Tamiami Development Corp. v. Miccosukee

Tribe of Indians of Florida, 63 F.3d 1030, 1049 (11th Cir. 1995). The Eleventh Circuit in

Tamiami partners found subject matter jurisdiction to exist under Ex Parte Young, but

found that no private right of action existed in federal court (or anywhere outside of a

tribal forum) to challenge a tribal regulatory agency’s decision to not license (or failure to

act) a management contractor.

4. The Apache Gaming Commission has not acted with malice or disregard forthe rights of TGS and Wells Fargo.

Wells Fargo has stated that the Gaming Commission’s investigation and the

Tribe’s submission of a Petition for License Review is merely an attempt to undue an

arbitration in which the Tribe did not prevail. Or the Gaming Commission’s attempt to


11

hold a hearing is an attempt to avoid the second arbitration filed by Wells Fargo and TGS

to seek millions of dollars in additional damages from a relatively impoverished Tribe. Or

a combination of both motives. Those are false and cannot be imputed based upon the

facts.

The e-mail from Fellis Gallues to the Apache Gaming Commission in May 2008 is

both a recognition that Wells Fargo should operate under a license if it owns machines in

the casino and proof that the Gaming Commission was not provided a copy of the actual

Assignment between TGS and Wells Fargo to review at the time of the transactions. This

is the only communication produced by Wells Fargo at any time in which it informed the

Tribe that it will take an assignment of the Gaming Equipment Lease from TGS (after it

was assigned to the Tribe). Ms. Gallues states:

I know you are diligently working on all the licensingrequests related to the transactions with Wells and TGS andKevin. I know you are reviewing the financing license forWells, and as we discussed we would not be applying for avendor license at this time as we will not be participating inthat capacity.

[Exhibit 7, Fellis Gallues E-Mail May 1, 2008]. Ms. Gallues then requests that the AGC

regurgitate certain language to please Wells Fargo’s lawyers, which included an

acknowledgment that if Wells Fargo took control of the slot machines it would do so only

after consultation with the Apache Gaming Commission and potentially obtaining a

license. There is no evidence that Wells Fargo ever received the requested language or

acknowledgment from the Gaming Commission in 2008 or any time subsequent.


12

The issues as to TGS are more obvious. TGS and its principal Medeiros recognize

that the participation of Kevin Kean through KAGD required additional work and

disclosure on the part of the Apache Gaming Commission. It is further worthwhile to

note that the Nevada Gaming Control Board also raised concerns to the Apache Gaming

Commission regarding the transfer of title to machines placed in the Tribe’s Silver

Buffalo Casino. [Exhibit 8, Nevada Gaming Control E-Mail to AGC]. The Tribe does

wish to return the gaming machines to Mr. Medeiros’ company, but the Tribe was

prevented from doing so by a directive from the Gaming Commission that it was not to

release machines which may be given to an unlicensed entity or were potential

contraband as being illegal under the State Compact’s standards. The Gaming

Commission, in commencing notification to Wells Fargo and TGS of its issues regarding

the assignment beginning on April 13, 2011 through the letter from former chairman

Gene Flute and continuing with the Tribe’s request to set certain issues for review

through its Petition for License Review filed with the Commission, seek to provide

greater due process than is normally afforded under the Gaming Commission’s own

Policies and Procedures which do not require a hearing --- until a determination that a

violation exists has been made and a fine already imposed. [Exhibit 33 to Amended

Complaint, Apache Gaming Commission Policies]. Wells Fargo has not produced a shred

of evidence (nor can it) that the Gaming Commission reviewed and approved of the

Assignment between TGS and Wells Fargo in June 2008 or anytime thereafter.

Wells Fargo is left with a legal argument, that the Gaming Commission cannot

impose a penalty of any kind because Wells Fargo is exempt under the Compact.


13

However, that is a mixed question of fact and law on which reasonable persons may

disagree and which the Gaming Commission has the sole authority to decide. As for a

fine, the Tribe’s Business Committee has passed a statement of tribal law recognizing

that Apache law has recognized disgorgement as an appropriate remedy. But the Gaming

Commission itself, even before the change in government which Wells Fargo so often

decries, had conducted investigations and sought significant fines on previous occasions

of $500 to $1,000 per day per occurrence. Exhibit 9, Notice of Violation 8/24/07]. The

ability to levy fines is not unique to this Gaming Commission or to the present leadership

of the Tribe.

In short, there is no evidence that the Gaming Commission will fail in its duty to

rule upon its own jurisdiction competently and fairly, and there is no evidence that the

Gaming Commission will find that TGS or Wells Fargo violated its licensing rules, much

less that any fine would certainly be imposed by the Gaming Commission.

5. The preliminary injunction is disfavored.

This Preliminary Injunction is disfavored as it affords Wells Fargo all relief it

requests in the event of a trial on the merits. Certain types of injunctions are disfavored:

“(1) preliminary injunctions that alter the status quo; (2) mandatory preliminary

injunctions; and (3) preliminary injunctions that afford the movant all the relief that it

could recover at the conclusion of a full trial on the merits.” QEP Field Services

Company v. Ute Indian Tribe of Uintah and Ouray Reservation, 740 F.Supp.2d 1274,

1281 (D.Utah 2010) (quoting O Centro Espirita Beneficiente Uniao do Vegetal v.

Ashcroft, 389 F.3d 973, 975 (10th Cir. 2004) (en banc)). Wells Fargo seeks to restrain


14

the actions of a tribal court, therefore a heightened standard should be applied in relation

to public policy. Union Carbide Agricultural Products Co. v. Costle, 632 F.2d 1014,

1018 (2nd Cir. 1980) (less vigorous fair ground for litigation standard should not be

applied when moving party seeks injunction against government action); Medical Soc. of

State of N. Y. v. Toia, 560 F.2d 535, 538 (2nd Cir. 1977) (where public interest is

adversely affected which cannot be compensated by bond, moving party undertakes a

greater burden of persuasion).

6. Wells Fargo cannot prove the four elements necessary for issuance of apreliminary injunction.

During the temporary restraining order hearing counsel for all parties made

representations. Most striking was the representation by counsel for Wells Fargo, which

can readily be accepted at face value, that it does not intend now or ever to provide

services or financing to the Apache Tribe’s casino. In other words, Wells Fargo does not

suggest that it will lose future revenues or business opportunities in the Apache’s Indian

country as a result of an adverse finding or penalty issued by the Apache Gaming

Commission. What Wells Fargo is suggesting is that in the here and now it may (if the

preliminary injunction does not issue) lose its right to arbitrate a penalty, and that would

constitute irreparable harm. However, without tribal exhaustion having even been

attempted, Wells Fargo cannot say for certain how the Gaming Commission will rule to

its own jurisdiction or even to a Wells Fargo motion to stay pending submission of the

issues in the Petition for License review to arbitration as submitted in the Amended

Statement of Claim by Wells Fargo. There is no certainty as to how the Gaming


15

Commission will act, and without such certainty Wells Fargo cannot prove that tribal

exhaustion is futile or that it will be irreparably harmed from allowing a hearing to take

place at which Wells Fargo retains the right to object based upon lack of jurisdiction of

the Gaming Commission, and any other defenses such as a pending arbitration. Wells

Fargo cannot prove irreparable harm.

As to the balancing of harms factor, the Tenth Circuit has repeatedly held that the

invasion of the right of tribal self-government by itself is irreparable harm to the Tribe.

Kiowa Indian Tribe of Oklahoma v. Hoover, 150 F.3d 1163, 1171-72 (10th Cir. 1998).

See also Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234, 1251 (10th Cir.

2001). As noted by the Court’s order, two public policies are competing in this instance,

one in favor of arbitration which is embodied in the Federal Arbitration Act. 9 U.S.C. § 1

et seq., and the other in favor of tribal self-government as embodied by the Congressional

decision to grant tribe’s regulatory jurisdiction over gaming in Indian country.

Public policy of Congress and the federal courts favors tribal exhaustion. Public

policy announced in IGRA favors tribal regulation and does not contemplate private

arbitration of regulatory issues. The analogy is plain. On the day prior to the temporary

restraining order hearing, the U.S. government announced an $85 million dollar fine (the

largest in history) being imposed on Wells Fargo for regulatory violations in its mortgage

business.2 Imagine that the U.S. Bureau of Labor Statistics, a branch of the U.S.

government, has a small petty cash account with Well Fargo and the pro forma account

2 See “Fed Hits Wells Fargo with $85 million fine” found athttp://money.cnn.com/2011/07/20/news/companies/wells_fargo_fined/index.htm last visited August2, 2011


16

agreement says that any and all disputes between Wells Fargo and account holder are to

be submitted to arbitration. Wells Fargo would never assert in response to the FDIC’s

fine that it should be submitted to binding arbitration. Regulated entities cannot be

allowed to privative their regulation – such a result renders the public policy favoring

arbitration not only secondary, but potentially dangerous if carried to its logical

conclusion. In this instance, public policy announced by IGRA, the State Compact, and

the Apache Gaming Ordinance, favors the open regulation provided by the administrative

agency of the Apache Gaming Commission and not private and potentially secret

arbitration.

Finally, in issuing the temporary restraining order this Court found fair ground for

litigation and sought to preserve the status quo. Wells Fargo cannot prove a likelihood of

success on the merits because it cannot prove that TGS is not subject to the jurisdiction of

the Apache Gaming Commission. TGS had a license. TGS sought to renew its license.

TGS operated as a vendor in the casino. If TGS operated as a vendor and failed to

disclose its assignment with Wells Fargo, that is fair ground on which the Apache

Gaming Commission may consider. As to Wells Fargo itself, it recognized in the past

and sought the Apache Gaming Commission’s exemptions. Wells Fargo voluntarily does

business in Indian country. Wells Fargo too is more likely than not subject to the

jurisdiction of the Apache Gaming Commission under the State Compact for acting as a

vendor. At the very least, whether the Assignment was a security interest or truly

unconditional so as to require a license as implied in Ms. Gallues’ e-mail, is a fair ground


17

for the Gaming Commission to consider. Wells Fargo cannot prove a likelihood of

success on the merits. This Court should allow the Gaming Commission to do its work.

Conclusion

Wells Fargo may not like that the Apache Tribe of Oklahoma is a sovereign

government. But it is. Wells Fargo may not like the separation of powers in the Apache

Constitution or Gaming Ordinance – but the existing arrangement cannot change merely

because of Wells Fargo’s disapproval. Wells Fargo may most dislike the grant of

authority in IGRA and the State Compact to tribal gaming commissions, but those grants

of authority exist. Wells Fargo voluntarily does business in Indian country, and it

voluntarily conducts business with the Apache Tribe of Oklahoma – if it held legal title to

slot machines and proceeds operating in the Tribe’s casino it should have disclosed its

ownership to the Tribe and obtained a license.

This Court should not grant the injunctive relief requested by Wells Fargo and

should dismiss this action.


18

Respectfully submitted,

DOERNER, SAUNDERS, DANIEL &ANDERSON, L.L.P.

By: s/Bryan J. NowlinJon E. Brightmire, OBA No. 11623Bryan J. Nowlin, OBA No. 21310Two West Second Street, Suite 700Tulsa, Oklahoma 74103(918) 582-1211 (telephone)(918) 925-5290 (facsimile)[email protected]

Attorneys for Defendants,Louis Maynahonah, Marquita Carattini, andKaren Heminokeky in their official capacities asmembers of the Apache Business Committee

Joined by:

s/Richard J. Grellner*Richard J. Grellner, OBA No. 15521434 NW 18th

Oklahoma City, OK 73103Ph: [email protected]

Attorney for Ronald Ahtone, Austin Klinekole,and Richard Grellner, in their officialcapacities for the Apache Gaming Commission

* Signed by filer with permission




19

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on August 3, 2011, I electronicallytransmitted the foregoing document to the Clerk of the Court using the ECF System forfiling and transmittal of a Notice of Electronic Filing to the following ECF registrants:

Jerome Miranowksi [email protected] M. Krauss [email protected] Ryan [email protected] G. Whaley [email protected] Tucker [email protected]. Brian Brandes [email protected]

s/Bryan J. NowlinBryan J. Nowlin








for the western district of oklahoma plaintiff, louis ... · according to oklahoma substantive law....

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