Certiorari Denied, March 23, 2010, No. 32,245
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2010-NMCA-034
Filing Date: January 26, 2010
Docket No. 28,444
GARY HOFFMAN,
Plaintiff-Appellant,
v.
SANDIA RESORT AND CASINO,
Defendant-Appellee.
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Linda M. Vanzi, District Judge
Paul Livingston
Placitas, NM
Bregman & Loman, PC
Sam Bregman
Eric R. Loman
Albuquerque, NM
for Appellant
Sutin, Thayer & Browne, PC
Paul Bardacke
C. Shannon Bacon
Albuquerque, NM
Sonosky, Chambers, Sachse, Mielke, & Brownell
David C. Mielke
Albuquerque, NM
for Appellee
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Norhaus Law Firm, LLP
Wayne H. Bladh
Santa Fe, NM
Rodina Cole Cave
Albuquerque, NM
for Amicus Pueblo of Laguna
Bergen Law Offices, LLC
Lee Bergen
Albuquerque, NM
for Amicus Ohkay Owingeh Pueblo
Sonosky, Chambers, Sachse, Mielke & Brownell
David C. Mielke
Albuquerque, NM
for Amicus Pueblo of Isleta
VanAmberg, Rogers, Yepa, Abeita, & Gomez, LLP
Bryant Rogers
Santa Fe, NM
for Amicus Pueblo of Nambe
Maxine R. Velasquez
San Felipe Pueblo, NM
for Amicus Pueblo of San Felipe
Frank A. Demolli
Santa Fe, NM
for Amicus Pueblo of Pojoaque
OPINION
CASTILLO, Judge.
{1} This case presents us with another question regarding the extent of tribal sovereign
immunity. Appellant Hoffman brought suit in district court based on his claims that Sandia
Resort and Casino (Sandia) wrongfully refused to pay him a gambling prize. Holding that
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tribal sovereign immunity applies, we affirm the district court’s grant of Sandia’s motion to
dismiss based on lack of subject matter jurisdiction.
BACKGROUND
{2} On August 16, 2006, Hoffman was a visitor at Sandia and began playing the Mystical
Mermaid slot machine. At some point during play, the machine indicated that Hoffman had
won $1,597,244.10. Sandia did not pay any prize money to Hoffman because, according to
Sandia, the machine had malfunctioned and the malfunction voided all play on the machine.
Hoffman followed the regulations of the Sandia Gaming Commission and appealed Sandia’s
determination regarding non-payment. The Commission affirmed Sandia’s decision that
Hoffman was not entitled to any of the award indicated on the machine.
{3} Having exhausted his tribal remedies, Hoffman then filed a complaint in the Second
Judicial District Court alleging breach of contract, prima facie tort, and violation of the
Unfair Practices Act. Sandia filed a motion to dismiss claiming that because the casino was
a wholly-owned, operated, and unincorporated enterprise of the Pueblo of Sandia, sovereign
immunity barred Hoffman’s suit. Hoffman countered by arguing first that there were
disputed facts regarding Sandia’s relationship to Sandia Pueblo (the Pueblo) and the
malfunction of the machine. Hoffman also argued that the Tribal-State Class III Gaming
Compact (Compact), NMSA 1978, §§ 11-13-1 to -2 (1997), entered into between the State
of New Mexico and Sandia waived Sandia’s sovereign immunity with respect to his claims.
The district court rejected Hoffman’s arguments, decided that tribal sovereign immunity
applied, and granted Sandia’s motion to dismiss. This appeal followed.
DISCUSSION
{4} Hoffman’s primary argument on appeal is that the waiver of immunity and choice
of law provisions in Sections 8(A) and 8(D) of the Compact establish that Sandia waived
sovereign immunity with respect to his claims for breach of contract, prima facie tort, and
violation of the Unfair Practices Act. As a preliminary matter, however, Hoffman contends
that factual disputes preclude dismissal. And in his last argument, Hoffman asserts that
sovereign immunity is an anachronistic legal theory and asks us to abandon it and its
application in his case. We address these arguments in reverse order.
A. Abandonment of Sovereign Immunity as a Legal Principle
{5} We may readily dismiss Hoffman’s argument that we should abandon sovereign
immunity as a legal principle. We have no authority to decline to follow precedent
established by our superior courts. See Alexander v. Delgado, 84 N.M. 717, 718, 507 P.2d
778, 779 (1973) (“[A] court lower in rank than the court which made the decision invoked
as a precedent cannot deviate therefrom and decide contrary to that precedent[.]” (internal
quotation marks and citation omitted)).
{6} Both the United States Supreme Court and the New Mexico Supreme Court
recognize tribal sovereign immunity as a legitimate legal doctrine of significant historical
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pedigree. See Puyallup Tribe, Inc. v. Dep’t of Game, 433 U.S. 165, 172 (1977) (stating that
“it is settled that a state court may not exercise jurisdiction over a recognized Indian tribe”);
Gallegos v. Pueblo of Tesuque, 2002-NMSC-012, ¶ 7, 132 N.M. 207, 46 P.3d 668 (“Indian
tribes have long been recognized as possessing the common-law immunity from suit
traditionally enjoyed by sovereign powers.” (internal quotation marks and citations
omitted)). Accordingly, we will proceed with Hoffman’s remaining argument.
B. Factual Disputes
{7} We now turn to Hoffman’s preliminary argument. He claims that there is a question
of fact regarding the relationships among Sandia Casino, Sandia Pueblo, and the Sandia
Gaming Commission such that he should have been allowed to conduct discovery
“concerning insurance coverage, corporate status and organization, or the facts concerning
the occurrence, investigation, or results of any inquiry” about the non-payment of his
winnings. We disagree.
{8} This matter came before the district court on a motion to dismiss for failure to state
a claim under Rule 1-012(B)(6) NMRA. In reviewing a motion to dismiss for failure to state
a claim, we take the well-pleaded facts alleged in the complaint as true and test the legal
sufficiency of the claims. Envtl. Control, Inc. v. City of Santa Fe, 2002-NMCA-003, ¶ 6,
131 N.M. 450, 38 P.3d 891 (filed 2001). In his complaint, Hoffman identified Sandia as a
resort hotel and casino and made no allegations that Sandia was an entity separate from or
unrelated to Sandia Pueblo.
{9} The complaint does acknowledge that Hoffman went through Sandia’s grievance and
appeal process, thus admitting the connection between Sandia and its gaming commission.
While there are allegations of non-payment, there are no allegations regarding an
investigation or inquiry about the non-payment.
{10} We have concerns about Hoffman’s argument. Generally, the district court need not
allow discovery before granting a Rule 1-012(B)(6) motion. See Rio Grande Kennel Club
v. City of Albuquerque, 2008-NMCA-093, ¶ 10, 144 N.M. 636, 190 P.3d 1131 (concluding
“that the district court was not required to allow [the p]laintiffs to develop the factual record
in order to decide the motions to dismiss”). Here, Sandia, in its motion to dismiss, describes
itself as “a wholly-owned and operated, unincorporated enterprise of the Pueblo of Sandia
. . . , a federally-recognized Indian tribe.” Hoffman does not directly dispute this status;
rather, he complains that he should have been given the opportunity to propound discovery
on this issue and on the issue of the malfunctioning gaming machine before dismissal.
Oddly, however, at no time during the pendency of this suit did Hoffman attempt to file any
discovery requests about any issue in the case. Further, Hoffman provides no citation to
authority for his argument here or below that discovery was required before dismissal.
Issues raised in appellate briefs that are unsupported by cited authority will not be reviewed
by us on appeal. In re Adoption of Doe, 100 N.M. 764, 765, 676 P.2d 1329, 1330 (1984)
(“We have long held that to present an issue on appeal for review, an appellant must submit
argument and authority as required by rule.” (Emphasis omitted.)).
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C. Sovereign Immunity and Hoffman’s Claims
{11} Hoffman’s argument is straight-forward. He maintains that his claims were properly
brought in district court because the unpaid slot machine winnings constitute property
damage, and Section 8 of the Compact waives sovereign immunity for property damage.
New Mexico case law does not support Hoffman’s position.
{12} Whether Sandia has waived its sovereign immunity with respect to Hoffman’s claims
is a question we review de novo. Holguin v. Tsay Corp., 2009-NMCA-056, ¶ 9, 146 N.M.
346, 210 P.3d 243. “It has long been recognized that Indian tribes have the same
common-law immunity from suit as other sovereigns.” R & R Deli, Inc. v. Santa Ana Star
Casino, 2006-NMCA-020, ¶ 10, 139 N.M. 85, 128 P.3d 513 (filed 2005). Tribal sovereign
immunity precludes state courts from entertaining lawsuits against tribal entities. Gallegos,
2002-NMSC-012, ¶ 7. Corporate entities under tribal control are extended the same
sovereign immunity as the tribe itself. Sanchez v. Santa Ana Golf Club, Inc.,
2005-NMCA-003, ¶ 6, 136 N.M. 682, 104 P.3d 548 (filed 2004). A tribe may waive its
sovereign immunity, but such waivers must be “express and unequivocal.” R & R Deli,
2006-NMCA-020, ¶ 10. “Because a tribe need not waive immunity at all, it is free to
prescribe the terms and conditions on which it consents to be sued, and the manner in which
the suit shall be conducted. Any such conditions or limitations must be strictly construed
and applied.” Id. (internal quotation marks and citations omitted).
{13} As Sandia concedes, the Compact contains specific provisions which effect a limited
and specific waiver of tribal sovereign immunity with respect to the Indian tribes in New
Mexico engaged in gaming. The Compact was negotiated under the comprehensive scheme
of the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 through 2721 (2000), a seminal
federal statute which “established the framework under which Indian tribes and states could
negotiate compacts permitting . . . gaming on Indian reservations located within state
territory.” Doe v. Santa Clara Pueblo, 2007-NMSC-008, ¶ 6, 141 N.M. 269, 154 P.3d 644
(internal quotation marks and citation omitted). Both the pueblos and the state were
involved in negotiating the terms of the Compact under the Compact Negotiation Act. Id.
“That negotiation process led to the various provisions of the Compact, including Section
8, with which we are concerned in this case.” Doe, 2007-NMSC-008, ¶ 6. As pointed out
by the Amici, all of the Indian tribes engaged in gaming in the State of New Mexico operate
under the same Compact. Amici in this case consists of the Pueblos of Isleta, Laguna,
Nambe, Ohkay Owingeh, Pojoaque, and San Felipe; each Indian tribe is located in New
Mexico and engaged in the enterprise of gaming and subject to the Compact.
{14} Hoffman relies on language in Sections 8(A) and 8(D) of the Compact to establish
that Sandia waived its sovereign immunity with respect to his claims.
{15} Section 8(A) of the Compact provides, in pertinent part:
The safety and protection of visitors to a Gaming Facility is a priority of the
Tribe, and it is the purpose of this Section to assure that any such persons
who suffer bodily injury or property damage proximately caused by the
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conduct of the Gaming Enterprise have an effective remedy for obtaining fair
and just compensation. To that end, in this Section, and subject to its terms,
the Tribe . . . agrees to a limited waiver of its immunity from suit, and agrees
to proceed either in binding arbitration proceedings or in a court of
competent jurisdiction, at the visitor’s election, with respect to claims for
bodily injury or property damage proximately caused by the conduct of the
Gaming Enterprise. For purposes of this Section, any such claim may be
brought in state district court, including claims arising on tribal land[.]
Id. (internal quotation marks and citation omitted); see R & R Deli, 2006-NMCA-020, ¶ 18.
Section 8(D) of the Compact states that the Pueblo “waives its defense of sovereign
immunity in connection with any claims for compensatory damages for bodily injury or
property damage up to the amount of fifty million dollars ($50,000,000) per occurrence
asserted as provided in this section.” R & R Deli, 2006-NMCA-020, ¶ 18.
{16} As a matter of convenience, we observe that subsections (A) and (D) both fall within
Section 8 of the Compact and both provide a waiver with respect to claims for bodily injury
or property damage. As such, they are plainly part of the same single waiver. Accordingly,
we need not refer to the two provisions independently throughout our discussion. Rather,
we will merely refer to them collectively as the waiver provision of Section 8.
{17} Generally, “Section 8 addresses subject matter jurisdiction over personal injury
claims against the Pueblos resulting from incidents occurring on Indian land in connection
with Class III gaming.” Doe, 2007-NMSC-008, ¶ 8. Our Court has previously addressed
the meaning of the Section 8 waiver language in R & R Deli, 2006-NMCA-020, and
Holguin, 2009-NMCA-056. R & R Deli dealt with a variety of contract and tort claims
brought against tribal entities by a commercial lessee. 2006-NMCA-020, ¶ 6. In affirming
the district court’s dismissal of all claims based on sovereign immunity, we looked to the
intent of the drafters and concluded that they “intended to provide a limited waiver of
sovereign immunity for purposes of providing a remedy to casino patrons who suffer
physical injury to their persons or property.” Id. ¶ 24 (emphasis added). Although we did
not define with specificity what constitutes a physical injury to a casino patron’s person or
property, we did reach two conclusions that provide guidance: (1) personal injury claims
brought by casino patrons are one but not the only form of physical injury clearly
contemplated by the Compact language, R & R Deli, 2006-NMCA-020, ¶¶ 21-22, 24; and
(2) contract law and business tort claims are not claims for physical damage to property as
contemplated by Section 8 of the Compact. R & R Deli, 2006-NMCA-020, ¶ 19.
{18} In our second case, the plaintiff in Holguin won a random drawing for a $250,000
prize at a New Mexico tribal gaming facility. 2009-NMCA-056, ¶ 1. He disagreed with the
manner in which he would be allowed to collect on the prize so he brought suit in district
court for breach of contract, conversion, unfair practices, and for two counts of invasion of
privacy. Id. On appeal, we held that sovereign immunity barred all claims. See id. ¶ 3. We
repeated our holding in R & R Deli: the words “bodily injury” and “property damage” in
Section 8 of the Compact relate to the safety of visitors and mean—as the plain meaning of
the words imply—“physical damage to . . . persons or property.” Holguin, 2009-NMCA-
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056, ¶ 11.
{19} Hoffman argues that the “personal injury” requirement was wrongly decided in R
& R Deli because the holding was based on interpreting Section 8 to apply to “bodily injury
and property damage” instead of “bodily injury or property damage.” (Emphasis added.)
According to Hoffman, the misappropriation of “and” for “or” permitted us to draw the
incorrect conclusion that the Compact was concerned only with physical injury to the
persons or property of casino patrons. We disagree. Hoffman’s argument is based on a far
too circumscribed reading of our analysis in R & R Deli. Whether the words are connected
by an “and” or an “or” is not determinative. Careful review of the analysis reveals that it
was based on the use of the words “bodily injury” and “property damage” employed together
consistently throughout Section 8 of the Compact. R & R Deli, 2006-NMCA-020, ¶ 21. We
relied on the close juxtaposition of these terms, not the conjunction between them. Id.
{20} Hoffman also disputes the district’s court’s determination that he has no property
damage. According to Hoffman, when the Sandia slot machine indicated that he had won
a jackpot and jackpot rounds totaling approximately 1.6 million, he was entitled to consider
the unpaid winnings his “property.” While he acknowledges his damage was not based on
a direct physical injury to his body, he maintains that it constituted “damage” to his property.
See Kosiba v. Pueblo of San Juan, 2006-NMCA-057, 139 N.M. 533, 135 P.3d 234;
Computer Corner, Inc. v. Fireman’s Fund Ins. Co., 2002-NMCA-054, 132 N.M. 264, 46
P.3d 1264; see also Devlin v. United States, 352 F.3d 525 (2d Cir. 2003). Hoffman argues
that New Mexico law does not require “a physical injury requirement” to his damage claim.
Hoffman misreads the law as it relates to tribal sovereign immunity.
{21} Computer Corner, Inc. concerned an insurance company’s duty to indemnify an
insured. 2002-NMCA-054, ¶¶ 1, 4. The term “property damage” appears in that opinion
because the insurance contract in dispute excluded specific types of property damage as
specifically defined in that contract. Id. ¶¶ 14-19. The case had nothing to do with the use
of this term in the Compact. In Kosiba, the plaintiff alleged that the loss of his gaming
license had been caused by improper governmental action of the Pueblo’s gaming
commission. 2006-NMCA-057, ¶ 12. We held that the plaintiff had no standing to assert
the waiver of immunity contained in Section 8, because the waiver in Section 8 “is limited
to victims of whose injuries are caused by the conduct of the Gaming Enterprise.” Kosiba,
2006-NMCA-057, ¶ 12. We fail to see how this holding advances Hoffman’s case. Lastly,
in Devlin, the Second Circuit was required to interpret the term “injury of loss of property”
under the Federal Tort Claims Act (FTCA). Devlin, 352 F.3d at 529-30. We do not see how
interpretation of the language in the FTCA has any bearing on the interpretation of the
waiver language in the Compact, especially in light of New Mexico law that sets out the
meaning of property damage as contemplated by Section 8. See R & R Deli, 2006-NMCA-
020, ¶ 19 (holding that neither breach of contract nor tort claims constitute property damage
as contemplated by the Compact); see also Holguin, 2009-NMCA-056, ¶ 13 (holding that
invasion of privacy claims and the alleged emotional injuries stemming from those claims
do not constitute property damage as contemplated by the Compact). Rather, the Compact
provides a limited waiver of sovereign immunity for physical damage to casino patrons or
their property proximately caused by the gaming enterprise. Holguin, 2009-NMCA-056, ¶
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11; R & R Deli, 2006-NMCA-020, ¶¶ 21, 24. The term physical injury or damage refers
literally to the physical destruction or impairment of the tangible property of a casino patron.
See Holguin, 2009-NMCA-056, ¶ 13 (observing that incorporeal claims do not constitute
physical damage to property as contemplated by the Compact).
{22} Hoffman cites to Doe, 2007-NMSC-008, ¶ 18, and he argues that sovereign immunity
does not apply in this case because Sandia’s actions in refusing to pay Hoffman his winnings
are inconsistent with “the effective regulation of Class III Gaming.” Hoffman complains
that there are no regulations, rules, or procedures to ensure that Sandia’s gaming is
conducted fairly and honestly. He also points to Romero v. Pueblo of Sandia, 2003-NMCA-
137, ¶ 15, 134 N.M. 553, 80 P.3d 490, as a case that stands for the proposition that one of
the purposes of the Compact is to ensure that casino gaming is conducted fairly and honestly.
We have difficulty understanding Hoffman’s contentions, but he appears to be arguing that
the Compact covers the regulation of Class III gaming, the Compact must ensure that gaming
is conducted fairly and honestly, Sandia’s non-payment of his jackpot is not fair or honest,
and his only effective remedy is to be able to bring suit in district court. As we explained
in paragraph six above, the doctrine of sovereign immunity applies to Indian tribes. Section
8 of the Compact provides a limited waiver of sovereign immunity for the claims of casino
patrons that are based on physical injury to their persons or property. Hoffman’s claims
cannot be so classified. Sovereign immunity bars his claims.
CONCLUSION
{23} Based on the foregoing, we affirm the ruling of the district court.
{24} IT IS SO ORDERED.
____________________________________
CELIA FOY CASTILLO, Judge
WE CONCUR:
____________________________________
RODERICK T. KENNEDY, Judge
____________________________________
MICHAEL E. VIGIL, Judge
Topic Index for Hoffman v. Sandia Resort and Casino, No. 28,444
CP CIVIL PROCEDURE
CP-MD Motion to Dismiss
CT CONSTITUTIONAL LAW
CT-IM Immunity
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GV GOVERNMENT
GV-SI Sovereign Immunity
IL INDIAN LAW
IL-GA Gaming
IL-IG Indian Law, General
IL-TC Tribal Court Jurisdiction
IL-TJ Tribal and State Authority and Jurisdiction
JD JURISDICTION
JD-SM Subject Matter
9