Breakthrough Management Group, Inc. v. Chukchansi Gold Casino & Resort

FILED
United States Court of Appeals
Tenth Circuit

December 27, 2010
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

BREAKTHROUGH MANAGEMENT
GROUP, INC.,

Plaintiff-Appellee-Cross-
Appellant,

v.

CHUKCHANSI GOLD CASINO AND
RESORT; CHUKCHANSI
ECONOMIC DEVELOPMENT Nos. 08-1298, 08-1305, 08-1317
AUTHORITY,

Defendants-Appellants-
Cross-Appellees,

and

RYAN STANLEY,

Defendant-Appellant-Cross-
Appellee.

Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:06-CV-01596-MSK-KLM)

Marc F. Pappalardo of Breakthrough Management Group, Inc., Longmont,
Colorado, for Plaintiff-Appellee-Cross-Appellant.

Michael A. Robinson of Fredericks Peebles & Morgan LLP, Sacramento,
California, for Defendants-Appellants-Cross-Appellees Chukchansi Gold Casino
and Resort and Chukchansi Economic Development Authority.

Lenden F. Webb of Law Offices of Lenden F. Webb, Fresno, California, for
Defendant-Appellant-Cross-Appellee Ryan Stanley.

Before MURPHY, HOLMES, Circuit Judges, and ARMIJO, District Judge. *

HOLMES, Circuit Judge.

This appeal asks us to explore the relationship between an Indian tribe and

the economic entities created by the tribe, and to determine how close that

relationship must be in order for those entities to share in the tribe’s sovereign

immunity. Plaintiff Breakthrough Management Group, Inc. (“BMG”), a provider of

business management training and consulting services, filed suit in the United

States District Court for the District of Colorado in August 2006. BMG alleged

that the Chukchansi Gold Resort & Casino (“the Casino”) had paid for a single-

person license for one of BMG’s online training programs and then recorded and

used portions of that program without permission to train more than one employee.

Because the Casino is operated for the benefit of a federally recognized Indian

tribe, the Picayune Rancheria of the Chukchansi Indians (“the Tribe”), BMG

brought federal and state-law claims against the Tribe, the Chukchansi Economic

*
The Honorable M. Christina Armijo, District Judge, United States
District Court for the District of New Mexico, sitting by designation.

2
Development Authority (“the Authority), which owns and operates the Casino, the

Casino, and several individual defendants. The defendants filed various motions to

dismiss, arguing that they were protected from BMG’s suit by the doctrine of tribal

sovereign immunity and that the district court should dismiss the complaint for lack

of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1).

The district court granted the Tribe’s motion to dismiss, holding that the

Tribe was entitled to sovereign immunity and had not clearly waived that immunity

by entering into licensing agreements with BMG that contained forum-selection

clauses. The court denied Defendant Ryan Stanley’s motion to dismiss, concluding

that sovereign immunity did not extend to him because he had been sued in an

individual rather than an official capacity. After an evidentiary hearing, the court

also denied the Authority and the Casino’s motion to dismiss, concluding that they

were not entitled to share in the Tribe’s sovereign immunity because any judgment

imposed against them would not imperil the Tribe’s monetary assets.

This appeal followed. The Authority and the Casino have appealed the

district court’s denial of their motion to dismiss for lack of subject matter

jurisdiction (Appeal No. 08-1298), and Mr. Stanley has done likewise (Appeal No.

08-1305). BMG has filed a cross-appeal that raises an alternative ground for

affirmance of the district court’s order—viz., that the Authority and the Casino, and

by extension Mr. Stanley, have waived any immunity that they may otherwise enjoy

by entering into BMG’s licensing agreements (Appeal No. 08-1317). We have

3
jurisdiction over Defendants’ interlocutory appeals under 28 U.S.C. § 1291 and the

collateral order doctrine, 1 but we DISMISS BMG’s cross-appeal for lack of

jurisdiction. For the reasons discussed below, we REVERSE the district court’s

orders denying the Authority and the Casino’s motion to dismiss and the motion to

dismiss of Mr. Stanley and REMAND for further proceedings consistent with this

opinion.

BACKGROUND

BMG is a Colorado Corporation that provides online business management

training and consulting services. BMG alleges that employees at the Casino copied

and distributed materials from one of BMG’s training programs without

authorization. The Casino, which operates for the financial benefit of the Tribe,

had paid for a single-person license, but allegedly had recorded and used portions

of the program without permission to train a large group of employees. Based on

these allegations, BMG brought suit against the Tribe, 2 the Authority, the Casino,

the former general manager of the Casino, Mr. Stanley, and two other Casino

employees. BMG asserted claims for federal copyright infringement, trademark

1
A district court’s order denying a motion to dismiss involving a
claim of tribal sovereign immunity is an immediately appealable collateral order.
Osage Tribal Council ex rel. Osage Tribe of Indians v. U.S. Dep’t of Labor, 187
F.3d 1174, 1179–80 (10th Cir. 1999).
2
The Picayune Rancheria of the Chukchansi Indians of California is a
federally recognized Indian tribe. See Indian Entities Recognized & Eligible To
Receive Services From the United States Bureau of Indian Affairs, 67 Fed. Reg.
46,328, 46,330 (July 12, 2002). The parties also have stipulated to that fact.

4
infringement, and violation of the Racketeer Influenced Corrupt Organizations Act

(“RICO”), 18 U.S.C. § 1962, as well as state common law claims for conversion,

misappropriation, breach of contract, breach of the implied covenant of good faith

and fair dealing, fraud, unfair competition, and violation of the Colorado Consumer

Protection Act, Colo. Rev. Stat. Ann. §§ 6-1-101 to -115 (West 2010).

All of the defendants filed motions to dismiss, arguing in relevant part that

dismissal was warranted under Federal Rule of Civil Procedure 12(b)(1) for lack of

subject matter jurisdiction under the doctrine of tribal sovereign immunity. BMG

opposed the motions. BMG also moved to convert the motions into Rule 56

motions for summary judgment and, in the alternative, for leave to conduct limited

discovery on the issue of tribal sovereign immunity.

In a September 12, 2007, Opinion and Order, the district court granted the

Tribe’s motion to dismiss. The court determined that the Tribe “indisputably

enjoys sovereign immunity,” Aplts. App. at 21, and rejected BMG’s argument that

the Tribe had waived its immunity by entering into two licensing agreements with

BMG that contained forum-selection clauses. 3 The court held that a contractual

provision agreeing to arbitrate disputes could constitute a waiver of sovereign

immunity when (1) there is an agreement to submit disputes to a body for

3
The court assumed without deciding that the Tribe could be held to
the terms of the licensing agreement, which was entered into by BMG and an
agent of the Casino.

5
adjudication, as well as (2) an agreement as to what particular body will hear such

disputes. But the court found that those requirements were not satisfied in this

case.

The court reasoned that the Tribe did not expressly agree to submit any

dispute for adjudication, it merely agreed where such adjudication would take place

if it were to occur. 4 The court explained that

the parties’ agreement here speaks only to where a suit
may be brought, but it does not expressly or impliedly
address whether a suit may be brought. . . .

At first blush, it seems awkward to read a contract
to specify where disputes may be resolved, but not to read
it as providing whether disputes may be resolved.
However, any awkwardness in this interpretation vanishes
when one recognizes the peculiar circumstances of this
case. Here, unlike the ordinary citizen that [BMG]
typically enters into contracts with, the Tribe possesses a
special cloak of immunity from suit. Thus, language in
[BMG’s] standard contract that would be sufficient to bind
ordinary citizens to a particular dispute-resolution
mechanism is not necessarily sufficient to bind the Tribe.

Id. at 20. The court concluded that, because BMG did not negotiate the terms of

the contract with the Tribe, “it should not be surprising that the standard terms of

[the licensing agreement] yield seemingly awkward results in this peculiar factual

circumstance.” Id. at 21.

4
As the district court recounted, the forum-selection provision stated
that “the sole and exclusive venue for any and all disputes involving . . . this
Agreement shall be the state and federal courts located within the state of
Colorado.” Aplts. App. at 20 (internal quotation marks omitted).

6
 The court did not rule on the Authority and the Casino’s motion to dismiss

in the September 12, 2007, Opinion and Order because it could not determine

from the pleadings whether the Authority and the Casino “enjoy[ed] a connection

to the Tribe close enough to enjoy the Tribe’s own immunity.” Id. at 23. The

court therefore scheduled an evidentiary hearing on that motion and denied as

moot BMG’s motion to convert the motions to dismiss into Rule 56 motions for

summary judgment. The court also denied BMG’s request “to specifically

authorize discovery in advance of this hearing,” holding that, if the Authority and

the Casino were entitled to immunity, such discovery would “chip away at the

benefits of . . . immunity.” Id. at 23 n.8. But “[t]o ensure that both sides have a

full and fair opportunity to examine the relevant documents and prepare their

case,” the district court ordered them to exchange copies of all exhibits ten days

before the evidentiary hearing and held that the parties could subpoena any other

documents up to three days prior to the hearing. 5 Id.

In that same order, the district court denied Mr. Stanley’s motion to

dismiss, finding that, because BMG was asserting claims against Mr. Stanley in

his individual rather than official capacity, he was not entitled to tribal sovereign

immunity. The court also granted the motion to dismiss for lack of personal

5
Although the district court referred only to the parties’ ability to
subpoena documents, it indicated at the evidentiary hearing that the parties also
could subpoena witnesses pursuant to Federal Rule of Civil Procedure 45.

7
jurisdiction brought by two employees of the Casino, Jeff Livingston and Vernon

D’Mello. They are not parties to this appeal.

The district court held an evidentiary hearing on the Authority and Casino’s

motion to dismiss on October 23, 2007. At the hearing, the parties stipulated to

the admission of approximately seventy-one exhibits “for the sole purpose of

whether the Johnson . . . test is met and not for any other issues, such as whether

there has been a waiver of immunity.” Aplee. Supp. App. at 99–100 (Tr.,

Evidentiary Hr’g, dated Oct. 23, 2007). The court also heard testimony from

Dustin Graham, the chairperson of the Tribal Council. After the hearing, the

parties filed a stipulation detailing the agreed-upon facts.

In an August 5, 2008, Opinion & Order, the district court evaluated the

relationship between the Tribe and the Authority and the Casino under a ten-

factor test articulated in an unpublished district court opinion, Johnson v.

Harrah’s Kansas Casino Corp., No. 04-4142-JAR, 2006 WL 463138 (D. Kan.

Feb. 23, 2006). Under Johnson, there is a threshold financial-liability inquiry that

must be satisfied before a court will consider other factors measuring the

closeness of the relationship between a tribe and its economic entities. As

applied here, the inquiry is “whether the Tribe will be financially liable for legal

obligations incurred by the Casino and the Authority.” Aplts. App. at 45. Based

on that threshold inquiry, the district court in this case denied the motion to

dismiss.

8
 Specifically, the court found that the Authority was governed by a board

with identical membership to the Tribe’s governing Council. The court further

found that the Authority owns and operates the Casino. But the court

nevertheless concluded that the Authority and the Casino were “non-Indian

entities” that were not entitled to invoke the Tribe’s sovereign immunity because

a judgment against them “w[ould] not result in direct financial liability for the

Tribe or otherwise imperil the Tribe’s assets.” Id. at 47. Even though the court

found that the Casino’s revenues go solely to the Authority and that the Authority

then gives that money to the Tribe, the court found that the Tribe’s right to

receive profits would not be threatened by a judgment, only the amount of profits

would be adversely affected.

The court reached that conclusion based on “evidence indicat[ing] that the

Authority is obligated to pay over to the Tribe at least $1 million per month,

regardless of its actual revenues.” Id. at 46. Therefore, “should the actual profits

fall short, the Authority will borrow or run a deficit to ensure that the Tribe

receives that which it is entitled to.” Id. at 47. Thus, the court concluded, “the

judgment would neither deprive the Tribe of its asset—the right to receive

profits—nor its guaranteed minimum payment.” Id. at 48. The court also found

that the Authority was created to serve as a non-immune entity for creditors so

that they would be more willing to lend money to the Tribe. The district court

accordingly denied the Authority and the Casino’s motion to dismiss. These

9
interlocutory appeals timely followed.

DISCUSSION

The Authority and the Casino 6 argue that the district court erred in denying

their motion to dismiss. They urge us to find that they qualify as subordinate

economic entities entitled to tribal sovereign immunity because

[a]n unincorporated entity created by and wholly owned by
a federally recognized Indian tribe for the sole purpose of
promoting tribal interests through the ownership and
operation of a Class III Indian gaming facility on behalf of
the . . . Indian tribe is . . . an Indian entity. [T]o protect
critical tribal and federal interests such an entity, [the
Authority,] as well as the Class III Indian gaming facility[,
the Casino], must be allowed to invoke tribal sovereign
immunity from suit.

Aplts. Opening Br. at 9. They ask us to reject the Johnson test employed by the

6
Mr. Stanley is also a party to this appeal. Although the district court
rejected Mr. Stanley’s motion to dismiss based on its conclusion that he had been
sued in his individual capacity rather than in an official capacity, that distinction
is not at issue on appeal. The parties now agree that Mr. Stanley was acting in
the course and scope of his employment at the Casino and, consequently,
whatever immunity is enjoyed by the Authority and the Casino is shared by Mr.
Stanley. See Burrell v. Armijo, 603 F.3d 825, 832 (10th Cir. 2010) (“Tribal
sovereign immunity generally extends to tribal officials acting within the scope of
their official authority. On the other hand, a tribe’s sovereign immunity does not
extend to an official when the official is acting as an individual or outside the
scope of those powers that have been delegated to him.” (citation omitted)
(internal quotation marks omitted)); Dry v. United States, 235 F.3d 1249, 1253
(10th Cir. 2000) (“Due to their sovereign status, suits against . . . tribal officials
in their official capacity ‘are barred in the absence of an unequivocally expressed
waiver by the tribe or abrogation by Congress.’” (quoting Fletcher v. United
States, 116 F.3d 1315, 1324 (10th Cir. 1997))). Because the parties agree that
Mr. Stanley’s entitlement to immunity is derivative of any immunity enjoyed by
the Authority and the Casino, for ease of reference we will discuss only the
Authority and the Casino.

10
district court and instead urge us to consider the factors we recently applied in

Native American Distributing v. Seneca-Cayuga Tobacco Co., 546 F.3d 1288

(10th Cir. 2008)—that is, in particular, the manner in which the entity was

created, the purposes the entity was intended to fulfill, and whether the tribe

intended for the entity to have immunity. The Authority and the Casino argue

that the evidence clearly demonstrates that they were created to serve the Tribe’s

interests in economic development, self-sufficiency, and self-governance, and that

the Tribe intended for them to share in its immunity from suit. The Authority and

the Casino maintain that, because all revenues generated by the Casino go to the

Tribe through the Authority, and are used exclusively for tribal purposes, any

“reduction in revenues [that would be caused by a judgment against the Casino or

the Authority would] ha[ve] a direct [adverse] impact on the Tribe and its ability

to provide for its economic development, self-sufficiency and welfare of its

government and members.” Aplts. Opening Br. at 23. And, finally, they argue

that the Authority and the Casino did not waive their immunity by entering into

the relevant contracts with BMG.

BMG argues that the Authority and the Casino cannot share in the Tribe’s

sovereign immunity because those entities are too far removed from the Tribe.

BMG bases its argument on the following contentions: the Tribe is not liable for a

judgment against those entities; the Authority’s corporate charter provides that

the Authority is a separate entity from the Tribe; the Casino’s charter provides

11
that the Tribe is not liable for its actions and that it is owned by the Authority, not

the Tribe; and the Authority and the Casino’s liability insurance will cover any

judgment against them, thereby protecting the Tribe’s assets. BMG argues that

we should apply the Johnson factors used by the district court to determine

whether the Authority and the Casino may share in the Tribe’s sovereign

immunity and disputes the applicability of Native American Distributing.

BMG also argues that, if we determine that the Authority and the Casino

are entitled to tribal sovereign immunity, we should nevertheless hold that they

waived such immunity by agreeing to litigate any disputes in Colorado courts as

part of BMG’s licensing agreements. Finally, BMG maintains that if we do not

affirm the district court’s denial of the motions to dismiss, we should direct the

district court on remand to allow BMG to conduct jurisdictional discovery and

call witnesses on the issue of tribal sovereign immunity.

For the reasons discussed below, we conclude that the district court applied

the incorrect legal standard—the district court erroneously treated the financial

impact on a tribe of a judgment against its economic entities as a threshold

inquiry. Our precedent demonstrates that there is no threshold determination to

be made in deciding whether economic entities qualify as subordinate economic

entities entitled to share in a tribe’s immunity. Rather, we should look to a

variety of factors when examining the relationship between the economic entities

and the tribe, including but not limited to: (1) their method of creation; (2) their

12
purpose; (3) their structure, ownership, and management, including the amount of

control the tribe has over the entities; (4) whether the tribe intended for the

entities to have tribal sovereign immunity; (5) the financial relationship between

the tribe and the entities; and (6) whether the purposes of tribal sovereign

immunity are served by granting immunity to the entities.

We conclude that, under these factors, the Authority and the Casino have a

sufficiently close relationship to the Tribe to share in its immunity. Because the

district court wrongly concluded that the Authority and the Casino were not

subordinate economic entities entitled to tribal sovereign immunity, and

consequently did not reach the issue of whether the Authority and the Casino

waived their immunity from suit through licensing agreements with BMG, we

remand for the district court to address that question in the first instance.

However, for reasons that we discuss below, we do not direct or require the

district court to permit jurisdictional discovery in connection with such further

proceedings.

I. The Authority and the Casino’s Appeal

A. Standard of Review

Our inquiry into whether the Authority and the Casino are subordinate

economic entities that share in the Tribe’s immunity from suit involves a mixed

question of law and fact. This case presents a legal issue—the appropriate test to

determine whether economic entities associated with a tribe may share in the

13
tribe’s immunity. It also presents a factual issue—involving the application of

that test to the relationship between the Tribe and the Authority and the Casino.

Ordinarily, “[w]e review de novo a district court’s denial of a motion to

dismiss based on tribal sovereign immunity.” Miner Elec., Inc. v. Muscogee

(Creek) Nation, 505 F.3d 1007, 1009 (10th Cir. 2007). But “[w]here, as here,

subject-matter jurisdiction turns on a question of fact, we review the district

court’s factual findings for clear error and review its legal conclusions de novo.”

Native Am. Distrib., 546 F.3d at 1293 (emphasis omitted); accord United States

ex rel. Ondis v. City of Woonsocket, 587 F.3d 49, 54 (1st Cir. 2009) (“When the

district court does not rule on the pleadings alone but, rather, takes evidence in

connection with a motion to dismiss for want of subject matter jurisdiction, the

court’s factual findings are reviewed for clear error.”). In this case, the district

court “ha[d] wide discretion to allow affidavits, other documents, and a limited

evidentiary hearing,” Dry, 235 F.3d at 1253 (quoting Holt v. United States, 46

F.3d 1000, 1003 (10th Cir. 1995)) (internal quotation marks omitted), and its

“reference to evidence outside the pleadings d[id] not convert the motion to a

Rule 56 motion [for summary judgment].” Holt, 46 F.3d at 1003.

B. Analysis

We would be remiss if we did not begin our discussion of the issues by

acknowledging the relevant Indian-law context that shapes our analysis. Three

major interrelated concepts play a role in this case: (1) tribal sovereignty, (2)

14
tribal sovereign immunity, and (3) tribal economic development. As the Supreme

Court has recognized, “Indian tribes are distinct, independent political

communities, retaining their original natural rights in matters of local

self-government. Although no longer possessed of the full attributes of

sovereignty, they remain a separate people, with the power of regulating their

internal and social relations.” Santa Clara Pueblo v. Martinez, 436 U.S. 49, 55

(1978) (citations omitted) (internal quotation marks omitted); accord NLRB v.

Pueblo of San Juan, 276 F.3d 1186, 1192 (10th Cir. 2002) (“Indian tribes are

neither states, nor part of the federal government, nor subdivisions of either.

Rather, they are sovereign political entities possessed of sovereign authority not

derived from the United States, which they predate.” (footnote omitted)); Native

Am. Church of N. Am. v. Navajo Tribal Council, 272 F.2d 131, 134 (10th Cir.

1959) (“Indian tribes are not states. They have a status higher than that of states.

They are subordinate and dependent nations possessed of all powers [except] to

the extent that they have expressly been required to surrender them by the

superior sovereign, the United States.”).

Because Indian tribes are sovereign powers, they possess immunity from

suit to the extent that Congress has not abrogated that immunity and the tribe has

not clearly waived its immunity. Santa Clara Pueblo, 436 U.S. at 58; Native Am.

Distrib., 546 F.3d at 1293; Berrey v. Asarco Inc., 439 F.3d 636, 643 (10th Cir.

2006). Not only is sovereign immunity an inherent part of the concept of

15
sovereignty and what it means to be a sovereign, but “immunity [also] is thought

[to be] necessary to promote the federal policies of tribal self[-]determination,

economic development, and cultural autonomy.” Am. Indian Agric. Credit

Consortium, Inc. v. Standing Rock Sioux Tribe, 780 F.2d 1374, 1378 (8th Cir.

1985); accord Patrice H. Kunesh, Tribal Self-Determination in the Age of

Scarcity, 54 S.D. L. Rev. 398, 398 (2009) (“Tribal sovereignty and the

jurisdictional counterpart of tribal sovereign immunity from suit are the bedrock

principles of tribal self-determination.”); see also Felix S. Cohen, Cohen’s

Handbook of Federal Indian Law §§ 7.05, 21.02[2] (Nell Jessup Newton et al.,

eds., 2005 ed.).

Tribal sovereign immunity may extend to subdivisions of a tribe, including

those engaged in economic activities, provided that the relationship between the

tribe and the entity is sufficiently close to properly permit the entity to share in

the tribe’s immunity. 7 See Native Am. Distrib., 546 F.3d at 1292; see also, e.g.,

Allen v. Gold Country Casino, 464 F.3d 1044, 1046–47 (9th Cir. 2006); Ninigret

7
We recognize that the Supreme Court has expressed reservations
about the extension of tribal immunity to economic activities, but we note that the
Court has deferred to Congress in this area. See Kiowa Tribe of Okla. v. Mfg.
Techs., Inc., 523 U.S. 751, 757–60 (1998); see also Native Am. Distrib., 546 F.3d
at 1293 (in discussing Kiowa Tribe, stating that “[w]hile the Supreme Court has
expressed misgivings about recognizing tribal immunity in the commercial
context, the Court has also held that the doctrine ‘is settled law’ and that it is not
the judiciary’s place to restrict its application”). And “Congress has consistently
reiterated its approval of the immunity doctrine.” Okla. Tax Comm’n v. Citizen
Band Potawatomi Indian Tribe of Oklahoma, 498 U.S. 505, 510 (1991).

16
Dev. Corp. v. Narragansett Indian Wetuomuck Hous. Auth., 207 F.3d 21, 29 (1st

Cir. 2000); Hagen v. Sisseton-Wahpeton Cmty. Coll., 205 F.3d 1040, 1043 (8th

Cir. 2000). The broad interpretation of tribal sovereign immunity can trace its

origins to “Congress’ desire to promote the ‘goal of Indian self-government,

including its “overriding goal” of encouraging tribal self-sufficiency and

economic development,’” Citizen Band Potawatomi Indian Tribe, 498 U.S. at 510

(quoting California v. Cabazon Band of Mission Indians, 480 U.S. 202, 216

(1987)), as well as to “Executive Branch policies, and judicial opinions,” Prairie

Band Potawatomi Nation v. Wagnon, 476 F.3d 818, 824 n.9 (10th Cir. 2007). As

the Ninth Circuit has noted, immunity for subordinate economic entities “directly

protects the sovereign Tribe’s treasury, which is one of the historic purposes of

sovereign immunity in general.” Allen, 464 F.3d at 1047 (citing Alden v. Maine,

527 U.S. 706, 750 (1999)).

One of the ways that Congress has promoted tribal sovereignty through

economic development is particularly relevant to this case—the authorization of

Indian gaming. See 25 U.S.C. § 2702(1) (stating that the purpose behind the

Indian Gaming Regulatory Act is “to provide a statutory basis for the operation of

gaming by Indian tribes as a means of promoting tribal economic development,

self-sufficiency, and strong tribal governments”); Cabazon Band of Mission

Indians, 480 U.S. at 218–19 (“The Cabazon and Morongo Reservations contain no

natural resources which can be exploited. The tribal games at present provide the

17
sole source of revenues for the operation of the tribal governments and the

provision of tribal services. They are also the major sources of employment on

the reservations. Self-determination and economic development are not within

reach if the Tribes cannot raise revenues and provide employment for their

members.”); see also generally Indian Gaming Regulatory Act, 25 U.S.C.

§§ 2701–2721 (“IGRA”); Cohen, supra, §§ 12.01–02, 21.01.

A commentator has observed that “[t]ribal governments directly control or

participate in commercial activities more frequently than other [types of]

governments. . . . [T]he tribal organization may be part of the tribal government

and protected by tribal immunity, even though it may have a separate corporate

structure.” William V. Vetter, Doing Business with Indians and the Three “S”es:

Secretarial Approval, Sovereign Immunity, and Subject Matter Jurisdiction, 36

Ariz. L. Rev. 169, 174 (1994). That leads to the question presented here: “Does

the resulting entity have a distinct, nongovernmental character and therefore is

not immune, or is it merely an administrative convenience, i.e., a ‘subordinate

[tribal] economic organization,’ and therefore immune?” Id. at 176 (alteration in

original). Put differently, we must determine whether the Authority and the

Casino are “the kind[s] of tribal entit[ies], analogous to a governmental agency,

which should benefit from the defense of sovereign immunity, or whether [they]

[are] more like . . . commercial business enterprise[s], instituted solely for the

purpose of generating profits for [their] private owners.” Gavle v. Little Six,

18
Inc., 555 N.W.2d 284, 293 (Minn. 1996).

BMG does not dispute the general principle that subordinate economic

entities may share in a tribe’s sovereign immunity; rather, BMG contends that,

under Johnson, the entities in this case may not do so. 8 It argues that the

8
However, BMG plainly is not entirely comfortable with the notion
that subordinate economic entities may share in a tribe’s sovereign immunity. Its
reluctance to endorse that principle is demonstrated by its remark that “the
Supreme Court has not ruled upon the issue of whether a separate business entity
that is directly or indirectly owned by a tribe is subject to tribal immunity.”
Aplee. Answer Br. & Opening Br. at 19. But BMG’s briefing nevertheless
focuses on whether the Authority and the Casino can satisfy the Johnson test.
BMG does not ask us to hold that economic entities can never share in a tribe’s
immunity from suit. It is just as well; that ship plainly sailed in Native American
Distributing. We are bound by that precedent.

In advocating against the application of Native American Distributing at
oral argument, BMG attempted to distinguish between the types of entities created
by tribes—on the one hand, those created under tribal law, and, on the other hand,
those created under Section 17 of the Indian Reorganization Act, 25 U.S.C. § 477,
which authorizes the Secretary of Interior “upon petition by any tribe” to “issue a
charter of incorporation to such tribe.” Id. According to BMG, the Tribe did not
avail itself of § 477 here, but rather created the Authority and the Casino under
tribal law. On the other hand, it argues that in Native American Distributing,
where we concluded that the tribe-related entity was immune from suit, the
analysis turned on whether the tribe had created a § 477 entity. We are inclined,
however, to believe that BMG’s argument reflects a misreading of that case,
which contains no mention of § 477. We also note that

Section 17 is not the exclusive means for tribes to
incorporate for business or other purposes—i.e., tribes can
create corporate entities under their own laws or those of
other sovereigns. The principal legal difference is that,
while section 17 corporations retain their tribal
status—and, accordingly, sovereign immunity in the
absence of a “sue and be sued” waiver—the other species
of corporations are not imbued automatically with such
(continued...)

19
Authority and the Casino are independent from the Tribe to such a degree that

they cannot share in the Tribe’s sovereign immunity. Accordingly, we must first

determine the appropriate test to measure the relationship between an Indian tribe

and its economic entities, and then decide whether the Authority and the Casino

are subordinate economic entities that share in the Tribe’s immunity. 9

8
(...continued)
status. Courts nonetheless have resorted generally to a
multi-factor inquiry, comparable to that employed in
section 17 controversies, to decide whether the corporation
constitutes an “arm of the tribe” and shares in the tribe’s
immunity from suit.

Clay Smith, Tribal Sovereign Immunity: A Primer, 50 Advoc. 19, 20–21 (May
2007) (footnotes omitted). However, we need not opine definitely on this
purported distinguishing factor because BMG has waived this argument by not
including it in its opening brief. We do not consider issues raised for the first
time at oral argument. See Corder v. Lewis Palmer Sch. Dist. No. 38, 566 F.3d
1219, 1235 n.8 (10th Cir.), cert. denied, 130 S. Ct. 742 (2009).
9
We note that the courts that have addressed this issue have utilized
different turns of phrase to describe a tribe’s economic entities. If the economic
entities are held to be sufficiently close to a tribe so as to share in its sovereign
immunity, courts have deemed those entities to be, inter alia, “an arm of the
tribe,” Allen, 464 F.3d at 1046; “a division of the Tribe,” Native Am. Distrib., 546
F.3d at 1293; “a tribal agency,” Dillon v. Yankton Sioux Tribe Hous. Auth., 144
F.3d 581, 583 (8th Cir. 1998); and “a sub-entity of the Tribe,” Ramey Constr. Co.,
Inc. v. Apache Tribe of Mescalero Reservation, 673 F.2d 315, 320 (10th Cir.
1982). Moreover, the doctrine has its roots in the Arizona state courts, which
refer to it as “the subordinate economic organization doctrine.” See, e.g., Dixon v.
Picopa Constr. Co., 772 P.2d 1104, 1108–12 (Ariz. 1989); see also Vetter, supra,
36 Ariz. L. Rev. at 177 (referring to “a subordinate tribal organization.”). For the
sake of consistency, we will refer to an economic entity entitled to tribal
sovereign immunity as a “subordinate economic entity.”

20
 1. The appropriate test to determine whether an economic entity
is entitled to tribal sovereign immunity.

As we have stated, to measure the closeness of the relationship between the

Tribe and the Authority and the Casino, the district court applied a test adopted

from an unpublished decision from the United States District Court for the

District of Kansas, Johnson v. Harrah’s Kansas Casino Corp. To understand that

standard, we find it necessary to explain the holding in Johnson in some detail.

In that case, Harrah’s Kansas Casino Corporation (“Harrah’s”) had urged the

district court to hold that the plaintiff’s claims against it were barred by the

doctrine of tribal sovereign immunity. Harrah’s operated Harrah’s Prairie Band

Casino, pursuant to a Management Agreement between Harrah’s and the tribe, on

property held in trust by the United States for the Prairie Band Potawatomi

Nation. Johnson, 2006 WL 463138, at *2. Under that agreement, Harrah’s

conducted the casino’s daily operations and the tribe received the total net

revenue from the casino; in return, the tribe paid Harrah’s a management fee. Id.

The Johnson court concluded that Harrah’s was not a tribal housing authority or a

tribal agency and that it therefore needed to determine whether Harrah’s “[wa]s a

‘subordinate economic organization’ of the Tribe.” Id. at *4. The court then

explained that

[m]ost courts addressing the issue have considered some
or all of the following factors: (1) the announced purpose
for which the entity was formed; (2) whether the entity
was formed to manage or exploit specific tribal resources;

21
 (3) whether federal policy designed to protect Indian assets
and tribal cultural autonomy is furthered by the extension
of sovereign immunity to the entity; (4) whether the entity
is organized under the tribe’s laws or constitution rather
than federal law; (5) whether the entity’s purposes are
similar to or serve those of the tribal government; (6)
whether the entity’s governing body is comprised mainly
of tribal officials; (7) whether the tribe has legal title or
ownership of property used by the entity; (8) whether
tribal officials exercise control over the administration or
accounting activities of the organization; (9) whether the
tribe’s governing body has power to dismiss members of
the organization’s governing body, and (10) whether the
entity generates its own revenue, whether a suit against the
entity would impact the tribe’s fiscal resources, and
whether it may bind or obligate tribal funds.

Id. The Johnson court decided to apply those factors to determine whether the

economic entity at issue was entitled to tribal immunity. Significantly, however,

it decided to treat the tenth factor, the financial relationship between the entity

and the tribe and whether a judgment against the entity would affect tribal assets,

as a threshold determination, just as the Supreme Court of Alaska did in Runyon

ex. rel. B.R. v. Association of Village Council Presidents, 84 P.3d 437 (Alaska

2004). The Johnson court agreed with Runyon’s determination that

[w]hen considering whether an entity is an arm of the tribe
for purposes of tribal sovereign immunity, . . . “the
entity’s financial relationship with the tribe is . . . of
paramount importance—if a judgment against it will not
reach the tribe’s assets or if it lacks the ‘power to bind or
obligate the funds of the [tribe],’ it is unlikely that the
tribe is the real party in interest.” On the other hand, . . .
the entity may be an arm of the tribe if it would be legally
responsible for the entity’s obligations.

22
Johnson, 2006 WL 463138, at *5 (quoting Runyon, 84 P.3d at 440–41).

The district court in Johnson therefore first examined “the financial

relationship between the Tribe and Harrah’s” to determine if Harrah’s was

entitled to share in the tribe’s sovereign immunity. Id. “If the Tribe may be

financially liable for Harrah’s legal obligations, the Court w[ould then] proceed to

discuss [the] other factors pertaining to the purpose and control of Harrah’s.” Id.

The court concluded that it was not clear whether a judgment against Harrah’s

would reach the tribe’s assets and so proceeded to analyze the remaining factors,

ultimately concluding that the balance of the factors “militate[d] against

extending tribal sovereign immunity to . . . Harrah’s.” Id. at *6, *8.

In applying Johnson, the district court in this case concluded that the

Authority and the Casino could not satisfy the threshold inquiry; it determined as

a dispositive matter that a judgment against the Authority or the Casino would not

endanger the Tribe’s right to receive profits. On that basis, the court held that

those entities were not entitled to tribal sovereign immunity and declined to reach

the remaining Johnson factors. We conclude that the district court applied the

wrong legal standard to determine whether the Authority and the Casino are

entitled to tribal sovereign immunity.

Our recent decision in Native American Distributing reveals the district

court’s error. In that case, we were asked to decide whether the Seneca-Cayuga

Tobacco Company, or “SCTC,” an enterprise of the Seneca-Cayuga Indian Tribe,

23
was entitled to sovereign immunity. That question in turn depended upon whether

SCTC was a division of the tribal corporation, which had waived its immunity

from suit, or of the tribe, which had waived its immunity only as to actions of the

tribal corporation. Native Am. Distrib., 546 F.3d at 1293. To answer that

question, we examined the tribe’s business committee resolution that created

SCTC.

We determined that “SCTC was a division of the Tribe” based on the

following facts: the resolution’s invocation of the business committee’s powers

under the tribal constitution rather than its powers under the corporate charter,

thereby “lend[ing] support to the conclusion that SCTC was created by the Tribe

acting in its governmental, rather than corporate, capacity”; the resolution’s

express declaration that SCTC would act as an economic development project to

provide economic opportunities and revenue for the tribe, and its statement that

SCTC was an essential governmental function of the tribe; and the resolution’s

inclusion of an express waiver of immunity as to suits brought by a specific

management company, indicating that the business committee believed SCTC was

a division of the tribe that otherwise was entitled to tribal immunity. Id. at

1293–94. We therefore looked to the purpose of the entity, whether it was created

under tribal law, and whether the tribe intended for the entity to have tribal

immunity.

The most important lesson for our purposes that we glean from Native

24
American Distributing is found in what we did not consider—in that case, we did

not examine the financial relationship between SCTC and the tribe and whether a

judgment against SCTC would reach the tribe’s monetary assets, much less

designate that factor as a threshold determination. Although we recognize that

the financial relationship between a tribe and its economic entities is a relevant

measure of the closeness of their relationship, Native American Distributing

plainly demonstrates that it is not a dispositive inquiry. The district court’s

decision to treat it as such was error.

We therefore must determine the correct legal standard. At this time there

is no need to define the precise boundaries of the appropriate test to determine if

a tribe’s economic entity qualifies as a subordinate economic entity entitled to

share in a tribe’s immunity. In this case, we conclude that the following factors

are helpful in informing our inquiry: (1) the method of creation of the economic

entities; (2) their purpose; (3) their structure, ownership, and management,

including the amount of control the tribe has over the entities; (4) the tribe’s

intent with respect to the sharing of its sovereign immunity; and (5) the financial

relationship between the tribe and the entities. 10 See, e.g., Allen, 464 F.3d at

10
As the district court in the Western District of Oklahoma commented,
“[a]lthough the subordinate economic entity analysis has been widely adopted, its
implementation is rarely uniform.” Somerlott v. Cherokee Nation Distribs. Inc.,
No. CIV-08-429-D, 2010 WL 1541574, at *3 (W.D. Okla. Apr. 16, 2010); see
also Gavle, 555 N.W.2d at 293 (stating that “the demarcation between those
business entities so closely related to tribal governmental interests as to benefit
(continued...)

25
1046–47; Altheimer & Gray v. Sioux Mfg. Corp., 983 F.2d 803, 812 (7th Cir.

1993); Gavle, 555 N.W.2d at 294–95; Ransom v. St. Regis Mohawk Educ. &

Cmty. Fund, Inc., 658 N.E.2d 989, 992–93 (N.Y. 1995); Dixon, 772 P.2d at

1109–11; Trudgeon v. Fantasy Springs Casino, 84 Cal. Rptr. 2d 65, 67–72 (Cal.

Ct. App. 1999); Vetter, supra, at 176–79; cf. Dillon, 144 F.3d at 583 (evaluating

whether tribal housing authority was a corporation created by the tribe and

subject to suit). Furthermore, our analysis also is guided by a sixth factor: the

policies underlying tribal sovereign immunity and its connection to tribal

economic development, and whether those policies are served by granting

immunity to the economic entities. See Dixon, 772 P.2d at 1111 (“Tribal

immunity should only apply when doing so furthers the federal policies behind

the immunity doctrine.” (citing Note, Tribal Sovereign Immunity: Searching for

Sensible Limits, 88 Colum. L. Rev. 173, 183, 186 (1988))); Gavle, 555 N.W.2d at

294 (courts should determine “whether federal policies intended to promote

10
(...continued)
from the tribe’s sovereign immunity and those so far removed as to be treated as
mere commercial enterprises is not as clear” and that “‘whether tribal sovereign
immunity now extends to commercial activities is an important, complex and
unresolved question,’ which the U.S. Supreme Court has never directly
considered” (quoting In re Greene, 980 F.2d 590, 600–01 (9th Cir. 1992))).
Accordingly, we have looked to the various tests used by federal courts, as well
as state courts, and have identified factors we believe to be most helpful in this
particular instance. We have not concluded that those factors constitute an
exhaustive listing or that they will provide a sufficient foundation in every
instance for addressing the tribal-immunity question related to subordinate
economic entities.

26
Indian tribal autonomy are furthered by the extension of immunity to the business

entity”). Those policies include protection of the tribe’s monies, see Cabazon

Band of Mission Indians, 480 U.S. at 218–19; Allen, 464 F.3d at 1046–47, as well

as “preservation of tribal cultural autonomy, preservation of tribal self-

determination, and promotion of commercial dealings between Indians and non-

Indians,” Dixon, 772 P.2d at 1111. We will therefore consider these factors in

determining whether the Authority and the Casino are subordinate economic

entities of the Tribe and entitled to share in the Tribe’s sovereign immunity.

2. Whether the Authority and the Casino are entitled to share in
the Tribe’s sovereign immunity.

a. BMG’s challenge to the district court’s discovery and
evidentiary rulings.

Before we evaluate those factors, we first must address BMG’s argument

that the district court abused its discretion in denying its request for discovery and

in preventing BMG from calling what it deemed to be necessary witnesses. If we

were to conclude that the district court did abuse its discretion in limiting

jurisdictional discovery, we likely would remand the matter for discovery and

further factual development.

BMG moved in the district court for leave to conduct limited discovery on

the issue of tribal sovereign immunity. The court denied the motion, expressing

its concern that discovery would undermine the purposes behind the immunity

doctrine. But the district court did permit the parties to subpoena documents and

27
witnesses. Consequently, the evidence upon which the district court based its

denial of Defendants’ motion to dismiss consisted of documents introduced by the

Authority and the Casino at the evidentiary hearing (with an admissibility

stipulation from BMG), testimony by the tribal chairperson, Dustin Graham, and

the stipulated agreed-upon facts filed by the parties. BMG argues that “the denial

of discovery prejudiced BMG because . . . BMG could only utilize documents that

the [Authority and the Casino] ‘cherry picked’ in the belief they would support

their case.” Aplee. Answer Br. & Opening Br. at 54. Additionally, BMG argues

it was prejudiced by not being allowed to call as witnesses two individuals it had

subpoenaed—Jeff Livingston, the Casino’s general manager, and Dixie Jackson,

the former chairperson of the Authority. Those witnesses did not appear at the

hearing. BMG asserts that Mr. Graham did not have the same amount of

knowledge about the Authority and the Casino as the witnesses it would have

liked to examine.

Because a 12(b)(1) motion is “a ‘speaking motion’ and can include

references to evidence extraneous to the complaint without converting it to a Rule

56 motion,” the district court “ha[d] wide discretion to allow affidavits,

documents and even a limited evidentiary hearing to resolve disputed

jurisdictional facts under 12(b)(1).” Wheeler v. Hurdman, 825 F.2d 257, 259 n.5

(10th Cir. 1987); accord Zappia Middle E. Constr. Co. Ltd. v. Emirate of Abu

Dhabi, 215 F.3d 247, 253 (2d Cir. 2000). “If . . . the court holds an evidentiary

28
hearing to adjudicate the issue of whether the court has jurisdiction . . . , the court

determines the credibility of witness testimony, weighs the evidence, and finds

the relevant jurisdictional facts.” PVC Windoors, Inc. v. Babbitbay Beach

Constr., N.V., 598 F.3d 802, 810 (11th Cir. 2010).

As with the court’s handling of discovery in other stages of litigation, in

the context of a 12(b)(1) motion, “[w]e give the district court much room to shape

discovery,” Citizens for Responsibility & Ethics in Wash. v. Office of Admin., 566

F.3d 219, 225 (D.C. Cir. 2009), and review the district court’s handling of

jurisdictional discovery under an abuse-of-discretion standard, Cheyenne Arapaho

Tribes of Okla. v. United States, 558 F.3d 592, 596 (D.C. Cir. 2009). See also

Trentadue v. F.B.I., 572 F.3d 794, 806 (10th Cir. 2009). Similarly, we review the

court’s evidentiary rulings, including the court’s decision to exclude evidence or

testimony, for abuse of discretion. See La Resolana Architects, PA v. Reno, Inc.,

555 F.3d 1171, 1180–81 (10th Cir. 2009); Polys v. Trans-Colo. Airlines, Inc., 941

F.2d 1404, 1407–08 (10th Cir. 1991). “A district court abuses its discretion

where it commits a legal error or relies on clearly erroneous factual findings, or

where there is no rational basis in the evidence for its ruling.” Trentadue, 572

F.3d at 806 (quoting Breaux v. Am. Family Mut. Ins. Co., 554 F.3d 854, 866 (10th

Cir. 2009)) (internal quotation marks omitted).

We are not persuaded that the district court abused its discretion in this

case. We have held that “a refusal to grant [jurisdictional] discovery constitutes

29
an abuse of discretion if the denial results in prejudice to a litigant” and that

“[p]rejudice is present where ‘pertinent facts bearing on the question of

jurisdiction are controverted . . . or where a more satisfactory showing of the facts

is necessary.’” Sizova v. Nat’l Inst. of Standards & Tech., 282 F.3d 1320, 1326

(10th Cir. 2002) (quoting Wells Fargo & Co. v. Wells Fargo Express Co., 556

F.3d 406, 430 n.24 (9th Cir. 1977)). BMG has failed to convince us of its legal

entitlement to jurisdictional discovery and, more specifically, that it was

prejudiced by the district court’s denial of its motion for discovery. 11 First, BMG

11
Our research reveals that we previously have placed the burden of
demonstrating a legal entitlement to jurisdictional discovery—and the related
prejudice flowing from the discovery’s denial—on the party seeking the
discovery; but we have done so only in unpublished, non-binding cases. See, e.g.,
Xie v. Univ. of Utah, 243 F. App’x 367, 375–76 (10th Cir. 2007) (holding in the
Rule 12(b)(1) context that the movant had failed to establish that the court’s
denial of her request for jurisdictional discovery had prejudiced her); cf. United
States v. Cervantes, 267 F. App’x 741, 744 n.2 (10th Cir. 2008) (in denying a
request for a COA for a § 2255 motion, stating that the petitioner “never renewed
his motion [for discovery and an evidentiary hearing], so the responsibility for
this outcome lies with him”). We are persuaded by those cases. We also note
that placing the burden on the party that has sought jurisdictional discovery is in
accord with the general approach of at least three other circuits—the Fifth,
Seventh, and Ninth Circuits. See Freeman v. United States, 556 F.3d 326, 341–42
(5th Cir.), cert. denied, 130 S. Ct. 154 (2009); Boschetto v. Hansing, 539 F.3d
1011, 1020 (9th Cir. 2008); Searls v. Glasser, 64 F.3d 1061, 1068–69 (7th Cir.
1995). Requiring the party challenging the denial of jurisdictional discovery to
prove prejudice is particularly fitting when a party has challenged the district
court’s subject matter jurisdiction on immunity grounds. In that context, we have
concerns about burdening the potentially sovereign party with discovery, as the
district court in this case recognized. Cf. Freeman, 556 F.3d at 341 (in discussing
the burden the Fifth Circuit places on a party seeking discovery on summary
judgment to show that discovery is necessary, stating that “[t]his is particularly
true where the party seeking discovery is attempting to disprove the applicability
(continued...)

30
did not renew its motion for discovery at the evidentiary hearing. That alone

makes us inclined to find that BMG bears the responsibility for any purported

evidentiary deficiencies at the hearing and effectively forfeited its challenge. But

there is more.

At the evidentiary hearing, BMG stipulated to the admissibility of

approximately seventy-one exhibits. Counsel for BMG then essentially conceded

that BMG had not been prejudiced by the lack of discovery. Not only did counsel

express a desire to go forward with the hearing, but in response to the district

court’s inquiry about the missing witnesses, counsel stated that, based solely on

the evidence presented at the hearing, he was “confident . . . that the Court will

see how the documents at hand, in particular one document, . . . establishes this

case.” Aplee. Supp. App. at 123.

Furthermore, BMG does not tell us what specific documents it would have

sought in discovery. Nor does BMG offer any support for its claim that the

Authority and the Casino “cherry picked” documents they believed were

11
(...continued)
of an immunity-derived bar to suit because immunity is intended to shield the
defendant from the burdens of defending the suit, including the burdens of
discovery”); Arriba Ltd. v. Petroleos Mexicanos, 962 F.2d 528, 534 (5th Cir.
1992) (discussing tension between discovery and protecting a sovereign’s
legitimate claim to suit and stating that “[a]t the very least, discovery should be
ordered circumspectly and only to verify allegations of specific facts crucial to an
immunity determination”); cf. also Mitchell v. Forsyth, 472 U.S. 511, 526 (1985)
(noting that one purpose of resolving qualified immunity early in the litigation is
“to avoid subjecting government officials . . . to the burdens of broad-reaching
discovery” (alteration omitted) (internal quotation marks omitted)).

31
favorable to their claim of tribal immunity. See Freeman, 556 F.3d at 342 (“The

party seeking discovery typically . . . alleg[es] the ‘specific facts crucial to

immunity which demonstrate[] a need for discovery.’” (second alteration in

original) (quoting Kelly v. Syria Shell Petroleum Co. B.V., 213 F.3d 841, 852 (5th

Cir. 2000))); Boschetto, 539 F.3d at 1020 (holding that the district court’s denial

of a request for jurisdictional discovery was not an abuse of discretion where the

request “was based on little more than a hunch that it might yield jurisdictionally

relevant facts”); cf. Garcia v. U.S. Air Force, 533 F.3d 1170, 1179 (10th Cir.

2008) (“A party may not invoke Rule 56(f) ‘by simply stating that discovery is

incomplete but must state with specificity how the additional material will rebut

the summary judgment motion.’” (quoting Libertarian Party of N.M. v. Herrera,

506 F.3d 1303, 1308–09 (10th Cir. 2007))). Indeed, BMG’s conclusory assertion

that jurisdictional discovery was necessary seems almost like an attempt to “use

discovery as a fishing expedition” rather than to obtain needed documents to

defeat the tribal immunity claim. Anthony v. United States, 667 F.2d 870, 880

(10th Cir. 1981).

We also fail to see how the district court abused its discretion in effectively

preventing BMG from examining certain witnesses. 12 At the evidentiary hearing,

12
It is not entirely clear from the record whether the district court took
an affirmative action that amounted to a ruling that BMG was not permitted to
call Mr. Livingston and Ms. Jackson. BMG’s counsel objected to the witnesses’
absence, and the district court permitted him to make a proffer as to their
(continued...)

32
when asked to make a proffer as to what those witnesses’ testimony would have

been, counsel was unable to explain how Mr. Livingston’s or Ms. Jackson’s

testimony would have differed from Mr. Graham’s. Cf. Polys, 941 F.2d at

1406–11 (finding that the district court did not err in excluding deposition

testimony because plaintiffs did not make an offer of proof). And BMG does not

explain on appeal what the value of the missing witnesses’ testimony would have

been, particularly in light of the fact that BMG had the opportunity to examine a

higher-ranked tribal official, the tribal Chairperson. BMG offers no support for

its conclusory assertion that Mr. Graham was not as knowledgeable as the missing

witnesses about the Authority and the Casino. Because we conclude that the

district court did not abuse its discretion in its denial of jurisdictional discovery,

we will therefore proceed to determine whether the facts support the Authority

and the Casino’s claim that they are subordinate economic entities entitled to

tribal sovereign immunity.

12
(...continued)
probable testimony. Counsel stated that he “c[ould ]not say how Mr. Livingston
would testify differently [than] Mr. Graham.” Aplee. Supp. App. at 149. The
court never made an explicit ruling, but we conclude that the court must have
decided tacitly that it would not allow BMG to call those witnesses at a later date
because it then heard closing arguments and issued a ruling without comment.
We will therefore analyze BMG’s challenge under the assumption that the district
court denied BMG the opportunity to call those witnesses.

33
 b. Whether the Authority and the Casino are subordinate
economic entities that share in the Tribe’s sovereign
immunity.

As we have stated, we will review the record in light of the following

factors: (1) the method of the Authority and the Casino’s creation; (2) their

purpose; (3) their structure, ownership, and management, including the amount of

control the Tribe has over the entities; (4) whether the Tribe intended for them to

have tribal sovereign immunity; (5) the financial relationship between the Tribe

and the Authority and the Casino; and (6) whether the purposes of tribal

sovereign immunity are served by granting them immunity. 13

13
Although the district court did not evaluate all of these factors
because it erroneously concluded that the financial relationship between the Tribe
and the Authority and the Casino was dispositive, we do not choose to remand
this case for the district court to weigh them in the first instance. Because these
factors were part of the Johnson test, the district court received evidence
sufficient for us to evaluate these factors on appeal. Moreover, because the
balance of the factors weighs so strongly in favor of immunity—as we discuss
infra—it would be an imprudent allocation of judicial resources to remand this
matter.

We also note that in evaluating these factors, we need not decide whether
the Authority and the Casino are located on Indian lands. BMG vigorously argues
that they are not, contending that their purported location outside of Indian land
undermines their claim that their operations further tribal economic development
and self-determination. See Aplee. Answer & Opening Br. at 29 (“While the
Resort Parties argue that granting immunity will promote ‘tribal economic
development, self sufficiency, and strong tribal governments,’ they do not address
how compelling a separate business entity that operates outside of ‘Indian Lands’
to comply with U.S. copyright and trademark laws will weaken its government,
cause it to be less self-sufficient, or will impact its economic development.”
(quoting Aplts. Opening Br. at 12)). However, this factor did not appear to be a
significant one to the Native American Distributing court; it did not discuss
(continued...)

34
 The first factor, the method of creation of the Authority and the Casino,

weighs in favor of the conclusion that these entities are entitled to tribal sovereign

immunity. The parties stipulated that the Tribe created the Authority under tribal

law. It is also evident from our review of the tribal resolution creating the

Authority that the Tribe created those entities under its constitution. As in Native

American Distributing, “[t]his lends support to the conclusion that [the Authority]

was created by the Tribe acting in its governmental . . . capacity.” 546 F.3d at

1294. We also find the Tribe’s own descriptions of the Authority to be

significant. The resolution described the Authority as “a body corporate and

politic and an instrumentality of the Tribal Government and an authorized agency

of the Tribe.” Aplts. App. at 126. That same language was used in the ordinance

establishing and governing the Authority, which originally provided that the

“Authority is and shall be considered a body corporate and politic and

instrumentality of the Picayune Rancheria of Chukchansi Indians . . . and shall be

deemed an authorized agency of the Tribe.” Id. at 129. That provision was later

13
(...continued)
whether SCTC was located on Indian lands. Consequently, we do not feel obliged
to give it independent consideration in our tribal immunity analysis here.
Furthermore, even if the Authority and the Casino were not located on Indian
land, we suspect that this fact would not avail BMG in the tribal immunity
analysis. See Kiowa Tribe of Okla., 523 U.S. at 758 (rejecting the invitation to
“confine it [i.e., the doctrine of tribal sovereign immunity] to reservations or to
noncommercial activities” (emphasis added)); Cohen, supra, § 21.02[2] at 1285
(“Tribal sovereign immunity extends to off-reservation activities of the tribe and
applies to both governmental and commercial activities.” (emphasis added)).

35
amended to describe the Authority as “a wholly owned unincorporated enterprise

of the Tribe [which] shall be deemed an authorized agency of the Picayune

Rancheria of Chukchansi Indians.” Id. at 135. We agree with the Authority and

the Casino that the change in terminology seems intended to remove the reference

to them as “corporate” entities and, consequently, to emphasize that they are

subordinate entities of the Tribe and not separate corporations. And the

categorization of the Authority as “a wholly owned . . . enterprise of the Tribe”

naturally suggests that the Authority enjoys a close relationship to the Tribe.

The second factor also weighs strongly in favor of immunity because the

Authority and the Casino were created for the financial benefit of the Tribe and to

enable it to engage in various governmental functions. The resolution states that

“the Tribal Council has determined that it is in the best interests of the members

of the Tribe for the Tribe to conduct Class II and Class III gaming.” 14 Aplts. App.

14
We acknowledge that the IGRA provides for the creation and
operation of Indian casinos to promote “tribal economic development,
self-sufficiency, and strong tribal governments.” 25 U.S.C. § 2702(1). Moreover,
one of the principal purposes of the IGRA is “to ensure that the Indian tribe is the
primary beneficiary of the gaming operation.” Id. § 2702(2). But we decline to
adopt a blanket rule proposed by the Authority and the Casino that “the IGRA
dictates that the Authority and the Casino must be considered tribal entities
protected from suit under the doctrine of tribal immunity.” Aplts. Opening Br. at
14. The purposes of Indian gaming certainly are relevant to our analysis, and the
fact that gaming is both generally intended to benefit the tribe and is in this case
used to fund the Tribe’s governmental functions weighs in favor of immunity.
See Gavle, 555 N.W.2d at 295 (recognizing “the unique role that Indian gaming
serves in the economic life of here-to-fore impoverished Indian communities
across this country”). But it is equally true that some casinos are run by
(continued...)

36
at 126. It also states that “the Tribal Council has determined that it is in the best

interest of the Tribe and its members to create a Tribal Economic Development

Authority as a body corporate and politic and an instrumentality of the Tribal

Government and an authorized agency of the Tribe to develop and own the Casino

. . . and to manage all assets and revenues” of the Casino. Id. Similarly, the

tribal ordinance states that the “Authority . . . is created by the Tribal Council to

act on behalf of the Tribe . . . for the following purposes,” including “further[ing]

the economic prosperity of the Tribe.” Id. at 128.

The allocation of revenue from the Casino clearly benefits the Tribe: 50%

goes to tribal governmental functions, including programs such as education,

health care, cultural preservation, child care, judicial systems, and law

enforcement; 15% is allocated for tribal economic development and is intended to

enable the Tribe to diversify in order “to reduce the Tribe’s dependancy on

revenues from a Gaming Facility”; 10% goes to a tribal trust fund, which

“guarantee[s] for the future a basic level of economic security for Tribal

families”; and 25% is distributed among each eligible member of the tribe as per

14
(...continued)
management companies, as in Johnson, and we are unable to say that in every
case, Indian gaming under the IGRA would automatically mean that all economic
entities associated with gaming would be sufficiently closely related to the Tribe
to share in its sovereign immunity. Although Native American Distributing did
not involve Indian gaming, that decision nevertheless demonstrates that a multi-
factor analysis, rather than a per se rule, is best suited to our examination of the
sometimes-complicated relationship between an Indian tribe and its economic
entities.

37
capita payments. Id. at 152–53 (Gaming Revenue Allocation Ordinance, adopted

Aug. 16, 2007).

In a letter to the Bureau of Indian Affairs dated August 20, 2007, Mr.

Graham reiterated that “we believe self-sufficiency is once again within our

reach”; he stated that the Tribe would use the Casino’s revenue to “encourag[e]

our young people to improve their own capacities through education,” and

indicated that the Tribe “plan[ned] to provide extra care and benefits to our youth

and our elders through Tribal programs.” Aplts. App. at 146–47. Similarly, a

Memorandum of Understanding between the Tribe and the County of Madera,

California, states that “the purpose of the [Casino] is to promote the Tribal

economic development, self-sufficiency, self-determination, strong Tribal

government, and the ability to provide services and benefits to Tribal members.”

Aplee. Supp. App. at 55. The gaming compact between the Tribe and the State of

California contains similar statements about the purpose of the Tribe’s

engagement in gaming.

The third factor in our analysis, the structure, ownership, and management

of the Authority and the Casino, weighs both for and against a finding of

immunity. The seven members of the Board of Directors of the Authority are

members of the Tribe who also are sitting members of the Tribal Council, which

makes the Tribe’s Council identical to the Authority’s Board. The Chairperson of

the Tribe also acts as the Chairperson of the Authority. But the Chief Financial

38
Officer of the Authority, the General Manager of the Casino, and the Chief

Financial Officer of the Casino are not tribal members. Moreover, the Casino has

fifteen directors, twelve of whom are not Tribal members.

As for the fourth factor, we conclude that the Tribe clearly intended for the

Authority to have tribal sovereign immunity. 15 The tribal ordinance governing the

Authority states that the Authority is empowered “[i]n connection with any

contractual obligation of the Authority, to waive the Authority’s sovereign

immunity from suit, to consent to the jurisdiction of any court over the Tribe, or

to consent to the levy of any judgment, [or] lien attachment upon any property or

income of the Authority.” Aplts. App. at 130. The ordinance continues, in a

provision labeled “Sovereign Immunity,”

[a]s a body corporate and politic and instrumentality and
authorized agency of the Tribe, the Authority shall be clothed by
federal and tribal law with all the privileges and immunities of
the Tribe, including sovereign immunity from suit in any state,
federal, or tribal court. Nothing contained in this Section shall
be deemed or construed to be a waiver of sovereign immunity by

15
It is less clear to us that the Tribe intended for the Casino also to
have immunity. But because the Casino is wholly owned by the Authority, it is
logical to assume that if the Tribe intended for the Authority to have immunity
from suit, it also intended for the Casino to have immunity. Otherwise, a suit
against the Casino would be fruitless—the Authority owns all of the Casino’s
assets and can choose not to waive its own immunity. In their briefs, the
Authority and the Casino almost exclusively discuss the Authority and appear to
assume that the Casino may be treated similarly to or as a derivative creature of
the Authority. Even BMG acknowledges that “[i]t is uncertain if the [Casino] is a
separate entity from the Authority.” Aplee. Answer & Opening Br. at 13. When
asked whether the two were separate, Mr. Graham testified “[p]robably not.”
Aplee. Supp. App. at 144.

39
 the Authority from suit, which may be waived only in accordance
with this Section.

Id. at 131. That provision was later amended to describe the Tribe as “a wholly

owned unincorporated enterprise and agency of the Tribe,” but the rest of the

language remains the same. Id. at 135. The ordinance explicitly waives the

Authority’s sovereign immunity “in accordance with the terms of the Project and

Financing Documents,” but as to other instances, it provides that

[t]he Authority may waive its sovereign immunity when
necessary, in the best business judgment of the Board of
Directors, to secure a substantial advantage or benefit for the
Authority or the Tribe. Any waiver of sovereign immunity shall
be specific and limited as to (i) duration, (ii) the grantee, (iii) the
scope of the waiver, (iv) nature and description of the property
or funds, if any, of the Authority, available to satisfy any order
or judgment, (v) a particular court or courts having jurisdiction
over the Authority, and (vi) the law that shall be applicable
thereto. Any express waiver of sovereign immunity by resolution
or contract of the Authority shall not be deemed a waiver of the
sovereign immunity of the Tribe.

Id. at 131. Accordingly, much like in Native American Distributing, the Tribe

“clearly expressed its belief that [the Authority] was a division of the Tribe that

was entitled to its immunity from suit.” 546 F.3d at 1294.

We also find that the fifth factor, the financial relationship between the

Tribe and the entities, weighs in favor of tribal sovereign immunity.

Significantly, we note that BMG appears to acknowledge that the district court’s

determination that the Authority was obligated to pay the Tribe a minimum

payment of $1 million per month was error. See Aplee. Answer Br. & Opening

40
Br. at 12–13, 26 (“It is also important to note that there is no mandatory

$1,000,000 payment.”). That minimum payment was a key fact that the district

court relied upon in its analysis.

In denying the Authority and the Casino’s motion to dismiss, the district

court stated that “the Authority is obligated to pay over to the Tribe at least $1

million per month, regardless of its actual revenues.” Aplts. App. at 46.

Therefore, the court reasoned, “should the actual profits fall short, the Authority

will borrow or run a deficit to ensure that the Tribe receives that which it is

entitled to,” id. at 47, and, as a consequence, “the judgment would neither deprive

the Tribe of its asset—the right to receive profits—nor its guaranteed minimum

payment,” id. at 48.

However, Mr. Graham testified at the evidentiary hearing that if the

Authority did not have the funds to cover the payment due to a decrease in Casino

revenue, that payment “wouldn’t happen.” Aplee. Supp. App. at 147–48.

Furthermore, an auditor’s report explains the “minimum guaranteed monthly

payment” as follows: “[T]he monthly payments to the Tribe from the Casino may

be up to $1,000,000 per month cumulatively . . . .” Id. at 85 (emphasis added).

Moreover, “the Authority introduced exhibits at the Evidentiary Hearing that

reveal that it has previously failed to pay the Tribe the alleged mandatory

$1,000,000 monthly payment for a number of months without any adverse

consequences.” Aplee. Answer Br. & Opening Br. at 26 (citing Aplee. Supp.

41
App. at 53). Thus, we conclude from our review of the record that the district

court’s finding concerning the minimum payment was clearly erroneous.

Keeping that error in mind, the evidence reveals that the Tribe depends

heavily on the Casino for revenue to fund its governmental functions, its support

of tribal members, and its search for other economic development opportunities.

One hundred percent of the Casino’s revenue goes to the Authority and then to

the Tribe. Therefore, as Mr. Graham testified, any reduction in the Casino’s

revenue that could result from an adverse judgment against it would therefore

reduce the Tribe’s income.

And, finally, we conclude that the sixth factor, the overall purposes of

tribal sovereign immunity, is served by a conclusion that the Authority and the

Casino have such immunity. They are so closely related to the Tribe that their

“activities are properly deemed to be those of the tribe.” Allen, 464 F.3d at 1046.

The Authority and the Casino plainly promote and fund the Tribe’s self-

determination through revenue generation and the funding of diversified

economic development. See, e.g., Cabazon Band of Mission Indians, 480 U.S. at

218–19; Allen, 464 F.3d at 1046–47; Gavle, 555 N.W.2d at 294–95; Trudgeon, 84

Cal. Rptr. 2d at 70. Not only has “Congress . . . expressed a strong policy in

favor of encouraging tribal economic development,” Note, Tribal Sovereign

Immunity: Searching for Sensible Limits, supra, at 186, but extending immunity

to the Authority and the Casino “directly protects the sovereign Tribe’s treasury,

42
which is one of the historic purposes of sovereign immunity in general,” Allen,

464 F.3d at 1047. In comparison, “[c]ases which have not extended immunity to

tribal enterprises typically have involved enterprises formed ‘solely for business

purposes and without any declared objective of promoting the [tribe’s] general

tribal or economic development.’” Trudgeon, 84 Cal. Rptr. 2d at 70 (alteration in

the original) (quoting Dixon, 772 P.2d at 1110).

After considering these factors, it is patent to us that the Authority and the

Casino are so closely related to the Tribe that they should share in the Tribe’s

sovereign immunity. Under these circumstances, we must conclude that the

district court clearly erred in finding that the Authority and the Casino were not

subordinate economic entities entitled to tribal sovereign immunity. 16 We

16
We are not persuaded otherwise by the portions of the ordinance that
the district court found so compelling. For example, the district court discussed
the provision in the ordinance that states that the Authority shall be exempt from
taxes “to the same extent as the Tribe, and for such purposes shall not be deemed
to be an entity or enterprise taxable separate from the Tribe.” Aplts. App. at 138.
That provision goes on to say that “[f]or all other purposes of the [Casino], its
ownership and operation, the Authority shall be considered a separate entity.” Id.
at 139. The district court also relied upon liability-limiting language in the
ordinance, which reads: “For the purposes of all liabilities and obligations
incurred in the name of the Authority or arising from the Authority’s ownership
or operation of the [Casino], the Authority shall constitute a separate entity, and
no other Tribal Party shall be obligated thereon except as such party may
otherwise expressly agree.” Id. Those provisions merely demonstrate that the
Authority and the Casino are not the Tribe itself, but are separate entities. Other
provisions demonstrate that fact, as well—for example, the ordinance provides
that the Authority’s waiver of sovereign immunity waives it only as to the
Authority and does not necessarily waive the Tribe’s immunity. See id. at 131
(“Any express waiver of sovereign immunity by resolution or contract of the
(continued...)

43
consequently reverse the district court’s denial of the motion to dismiss; the

Authority and the Casino (and thus Mr. Stanley) are protected from suit by tribal

sovereign immunity.

Therefore unless they have waived their immunity, 17 the complaint against

the Authority, the Casino, and Mr. Stanley should be dismissed for lack of subject

matter jurisdiction. Because the district court concluded that the Authority and

the Casino were not entitled to tribal sovereign immunity, it did not address

BMG’s alternative argument—viz., that those entities had waived whatever

immunity they possessed by entering into BMG’s licensing agreements containing

forum-selection clauses. We conclude that the most prudent course is to remand

the case for the district court to address waiver in the first instance. See

16
(...continued)
Authority shall not be deemed a waiver of the sovereign immunity of the Tribe.”).
But that does not change our sovereign immunity analysis. The Authority and the
Casino may, as subordinate economic entities, share in the Tribe’s immunity
without being the same as, or indistinguishable from, the Tribe. If that were not
true, there would be no need for the subordinate economic enterprise doctrine.
Even if we assume arguendo that those provisions should weigh against a finding
of immunity in our analysis, they cannot outweigh the balance of factors that
weigh in favor of immunity.

We also are not convinced by BMG’s contention that the Authority and
Casino’s insurance policies protect the Tribe from being financially responsible
for, or harmed by, an adverse judgment against them, and weigh against a finding
of immunity. Even if the insurance policies would provide coverage in this
instance, which is far from certain, we would nevertheless conclude that this fact
does not outweigh the balance of the other factors in favor of immunity.
17
BMG does not contend that Congress has abrogated the immunity of
these entities.

44
Apartment Inv. & Mgmt. Co. (AIMCO) v. Nutmeg Ins. Co., 593 F.3d 1188, 1198

(10th Cir. 2010) (recognizing that the “better practice” is to remand issues raised

but not ruled on by the district court in the first instance).

II. BMG’s “Protective” Cross-Appeal

BMG also raised the issue of waiver in what it calls a “protective” cross-

appeal. Specifically, BMG cross-appealed “to preserve, as an additional or

alternative basis for affirming that portion of the District Court’s order of August

6, 2008[,] finding that Appellants could not invoke tribal sovereign immunity, the

issue that Appellants also waived any claim of tribal sovereign immunity by

executing the two license agreements with Breakthrough Management.”

Aplee./Cross-Aplt. Mem. Br. Jurisdiction, Attach. BMG0093 (Notice of

Protective Cross-Appeal, filed Sept. 3, 2008). BMG argues that this court should

exercise pendent appellate jurisdiction over its cross-appeal because the issue of

waiver is “inextricably intertwined” with the Appellants’s interlocutory appeals.

Aplee./Cross-Aplt. Mem. Br. Jurisdiction at 18–19. BMG contends that there is a

single issue at stake: “whether Appellants are entitled to assert tribal sovereign

immunity as a defense.” Id. at 18.

BMG states in the alternative that “[e]ven if the claims . . . were not

‘inextricably intertwined,’ pendent jurisdiction still would be appropriate here,

because review of the cross-appeal is necessary to ensure meaningful review of

Appellants’ claims of tribal sovereign immunity.” Id. at 19. BMG maintains that

45
if its argument regarding waiver is later found to be correct on subsequent appeal,

that would render this court’s review of the instant appeal meaningless. Id. BMG

also contends that the only way it could raise the issue of waiver is through a

cross-appeal because it “asks the Court to affirm on grounds that might enlarge

the rights afforded the prevailing party” (i.e., the Tribe may be affected by this

court’s ruling that the parties to this appeal had waived any sovereign immunity

they possessed). Id. at 13,16.

We are unpersuaded. We conclude that it would be improper for us to

exercise pendent jurisdiction over BMG’s cross-appeal. “We have recognized

that the exercise of pendent appellate jurisdiction ‘is generally disfavored.’”

Timpanogos Tribe v. Conway, 286 F.3d 1195, 1200 (10th Cir. 2002) (quoting

Armijo ex. rel. Chavez v. Wagon Mound Pub. Schs., 159 F.3d 1253, 1264 (10th

Cir. 1998)). “This court has stated it will take pendant [sic] jurisdiction over an

interlocutory appeal only where the otherwise nonappealable decision is

inextricably intertwined with the appealable decision, or where review of the

nonappealable decision is necessary to ensure meaningful review of the

appealable one.” Tarrant Reg’l Water Dist. v. Sevenoaks, 545 F.3d 906, 915

(10th Cir. 2008) (quoting Timpanogos Tribe, 286 F.3d at 1200) (internal quotation

marks omitted); see United Transp. Union Local 1745 v. City of Albuquerque, 178

F.3d 1109, 1114 (10th Cir. 1999) (noting that the exercise of pendent jurisdiction

is discretionary and should be used sparingly); Armijo, 159 F.3d at 1264 (same).

46
 Issues are inextricably intertwined if “the pendent claim is coterminous

with, or subsumed in, the claim before the court on interlocutory appeal—that is,

when the appellate resolution of the collateral appeal necessarily resolves the

pendent claim as well.” Moore v. City of Wynnewood, 57 F.3d 924, 930 (10th

Cir. 1995); see Malik v. Arapahoe Cnty. Dept. of Social Servs., 191 F.3d 1306,

1317 (10th Cir. 1999) (“Accordingly, our application of the ‘inextricably

intertwined’ standard for exercising pendent jurisdiction over interlocutory

appeals must be narrowly focused on those claims the review of which would not

require the consideration of legal or factual matters distinct from those raised by

the claims over which we unquestionably have jurisdiction.” (emphasis added)).

As clearly evident from our decision to remand the issue of waiver to the

district court, supra, we do not view the waiver issue as being inextricably

intertwined with the question of whether the Authority and the Casino share in the

Tribe’s sovereign immunity. Our decision concerning the latter issue does not

“necessarily resolve[] the pendent [waiver] claim as well.” Moore, 537 F.3d at

930. The immunity and waiver issues are distinct. See Sac & Fox Nation v.

Hanson, 47 F.3d 1061, 1064 (10th Cir. 1995) (“[I]f the Nation was entitled to

sovereign immunity, it did not waive its immunity from suit. We must therefore

address the predicate question of whether the Nation had sovereign immunity in

the first instance.”); see also Gonzalez v. 7th St. Casino, No. 09-2674-CM, 2010

WL 1875734, at *2 (D. Kan. May 5, 2010) (“Whether an entity is entitled to tribal

47
sovereign immunity to begin with is a separate issue from whether immunity has

been waived.”); Bales v. Chickasaw Nation Indus., 606 F. Supp. 2d 1299,

1305–06 (D.N.M. 2009) (as to that case, noting that “waiver is not an issue but

rather the issue is whether there is tribal sovereign immunity to begin with”). Our

resolution of the former issue (i.e., the availability of tribal sovereign immunity)

involves consideration of the relationship between the Tribe and the Authority

and the Casino, whereas our resolution of the latter (i.e., waiver of any tribal

sovereign immunity) calls for consideration of the effect of the forum-selection

clauses of the license agreements. See Aplts./Cross-Aplees. Mem. Br.

Jurisdiction at 10 (“[T]he appeal only requires the Court to examine the

relationship between Appellants and the Tribe. The effect, if any, of BMG’s

license agreement is a separate claim under a separate legal theory.”).

Furthermore, our decision concerning sovereign immunity will stand as

meaningful precedent involving complicated Indian-law issues, irrespective of the

ultimate conclusion concerning waiver before the district court or in any

subsequent appeal.

BMG is free to litigate the waiver issue before the district court and to

appeal from an adverse ruling on this issue. BMG’s suggestion that it must raise

this issue on cross-appeal because of the possible impact of a waiver ruling on the

48
Tribe’s claim of immunity is misguided. 18 A cross-appeal ordinarily would be

appropriate where a litigant seeks to enlarge his rights conferred by the original

judgment or to lessen the rights of his adversary under that judgment. United

States v. Am. Ry. Exp. Co., 265 U.S. 425, 435 (1924) (“[T]he appellee may not

18
In making this argument, BMG relies upon our decision in Housing
Authority of Kaw Tribe of Indians of Oklahoma v. City of Ponca City, 952 F.2d
1183 (10th Cir. 1991). Specifically, BMG contends that “the Tenth Circuit has
warned that filing a cross-appeal is necessary when resolution of an issue
potentially diminishes the rights of absent third parties.” Aplee./Cross-Aplt.
Mem. Br. Jurisdiction at 20. Housing Authority of Kaw Tribe, however, is
distinguishable. There, we rejected the city defendant’s contention that we should
affirm on the alternative ground of res judicata because the city failed to file a
cross-appeal. In particular, we stated: “Were we to affirm the original judgment
on the basis of res judicata, other potential plaintiffs having some relationship
with the Authority might unfairly be precluded from bringing claims against
Ponca City.” Hous. Auth. of Kaw Tribe, 952 F.2d at 1195. It is significant,
however, that the alternate ground for affirmance advanced in Housing Authority
of Kaw Tribe was res judicata. As the Supreme Court decision that we relied
upon there indicates, “[u]nder res judicata, a final judgment on the merits bars
further claims by parties or their privies based on the same cause of action.”
Montana v. United States, 440 U.S. 147, 153 (1979) (emphasis added). If we
were to affirm the district court’s sovereign immunity order under a waiver
rationale, the Tribe—not subject to the terms of that order nor a party to this
appeal—would not necessarily and unfairly have its rights lessened by operation
of law, as apparently could have been the situation with the potential future
litigants in Housing Authority of Kaw Tribe. Relatedly, BMG’s rights would not
be enlarged necessarily by operation of law by an affirmance on a waiver
rationale. Accordingly, Housing Authority of Kaw Tribe is distinguishable. Be
that as it may, perhaps more importantly, we have concluded that the waiver issue
is not inextricably intertwined with the tribal immunity issue raised in the
principal (interlocutory) appeal. Therefore, even if BMG could cogently argue
that the waiver issue needed to be raised in a cross-appeal because it might
enlarge its rights, we have determined that it would not be appropriate for us to
exercise pendent jurisdiction over any cross-appeal involving the waiver issue
because that issue is not inextricably intertwined.

49
attack the decree with a view either to enlarging his own rights thereunder or of

lessening the rights of his adversary, whether what he seeks is to correct an error

or to supplement the decree with respect to a matter not dealt with below.”); see

June v. Union Carbide Corp., 577 F.3d 1234, 1248 n.8 (10th Cir. 2009) (“Under

the cross-appeal rule, ‘an appellate court may not alter a judgment to benefit a

nonappealing party.’” (quoting Greenlaw v. United States, 544 U.S. 237, 244

(2008)).

In the context of an interlocutory appeal, the functional equivalent of the

original judgment is the interlocutory order appealed from—viz., in this instance,

the district court’s order denying sovereign immunity to the Authority and the

Casino. See Behrens v. Pelletier, 516 U.S. 299, 307 (1996) (“[A]n order rejecting

the defense of qualified immunity at either the dismissal stage or the summary

judgment stage is a ‘final’ judgment subject to immediate appeal.”); Roska ex rel.

Roska v. Sneddon, 437 F.3d 964, 970 (10th Cir. 2006) (“Although we have

jurisdiction over Defendants’ appeal from the district court’s denial of their

motion for summary judgment on qualified immunity, we decline to assert

pendent appellate jurisdiction over Defendants’ claim that the district court failed

to apply a local rule.”); see also 15A Charles Alan Wright, Arthur R. Miller &

Edward H. Cooper, Federal Practice and Procedure § 3904, at 221 (Supp. 2010)

(“Interlocutory appeals may present special challenges in cross-appeal

practice. . . . [T]he appeal may properly be confined to matters that relate closely

50
to the order that supports the appeal.” (emphasis added)).

As the Authority and the Casino correctly note, “BMG’s ‘right’ conferred

by that [interlocutory immunity] order is the right to maintain its lawsuit against

these two defendants.” Aplts./Cross-Aplees. Mem. Br. Jurisdiction at 12

(emphasis added). If BMG were successful on its waiver argument, that right

would not be enlarged. Accordingly, we decline to assert pendent jurisdiction

over BMG’s waiver-based cross-appeal, and, accordingly, dismiss it.

CONCLUSION

For these reasons, we REVERSE the district court’s orders denying the

Authority and the Casino’s motion to dismiss and the motion to dismiss of Mr.

Stanley, and REMAND for further proceedings consistent with this opinion. We

DISMISS the cross-appeal of BMG for lack of jurisdiction.

51