Monster Technology Group v. Eller ( 2022 )

Appellate Case: 21-6146 Document: 010110718155 Date Filed: 07/29/2022 Page: 1
FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT July 29, 2022
_________________________________
Christopher M. Wolpert
Clerk of Court
MONSTER TECHNOLOGY GROUP,
LLC,
Plaintiff - Appellant,
v. No. 21-6146
(D.C. No. 5:21-CV-00879-J)
GARRETT A. ELLER, (W.D. Okla.)
Defendant - Appellee.
_________________________________
ORDER AND JUDGMENT *
_________________________________
Before TYMKOVICH, Chief Judge, MATHESON and EID, Circuit Judges.
_________________________________
This matter is before the court on Appellant Monster Technology Group,
LLC’s Motion to Dismiss Appeal on Grounds of Mootness and the Iowa Tribe of
Oklahoma’s 1 Rule 38 Motion for Attorneys’ Fees and Costs. We grant both motions
as set forth herein.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
1
Appellee Garrett Eller is party to this suit “in his official capacity” as a judge
for the Iowa Tribe of Oklahoma. Aplt. App. at 8. The Iowa Tribe, and not Eller, is
therefore the real party in interest. See McDonald v. Wise, 769 F.3d 1202, 1215
Appellate Case: 21-6146 Document: 010110718155 Date Filed: 07/29/2022 Page: 2
I. Background
Monster believes the Iowa Tribe breached a contract with it that concerned
development of software for online gaming operations. Monster therefore filed a
petition for arbitration with the American Arbitration Association (AAA).
The Iowa Tribe contends the dispute must be adjudicated by its tribal court. It
therefore sought and obtained from the tribal district court a preliminary injunction
preventing Monster from pursuing AAA arbitration. Monster filed a notice of
interlocutory appeal seeking to appeal the preliminary injunction to the Supreme Court of
the Iowa Tribe of Oklahoma.
Before the Iowa Tribe Supreme Court ruled on the appeal, Monster filed a
complaint for declaratory and injunctive relief against the tribal district judge, in his
official capacity, in the Western District of Oklahoma. Monster sought declarations that
the tribal court lacked jurisdiction to entertain the claims brought by the Iowa Tribe
against it, and that the question of whether Monster could force the Iowa Tribe to
arbitrate must be decided by the AAA, and not the tribal court. Monster also sought an
injunction ordering the tribal judge to refrain from exercising jurisdiction over claims
against Monster or from continuing to enjoin Monster’s efforts to seek arbitration with
the AAA.
(10th Cir. 2014) (“[O]fficial capacity suits are simply ‘another way of pleading an
action against an entity of which an officer is an agent.’” (quoting Monell v. Dep’t of
Soc. Servs., 436 U.S. 658, 690 n. 55 (1978)).
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The district court dismissed the complaint sua sponte. It noted that under “[t]he
tribal court exhaustion rule,” “‘as a matter of comity, a federal court should not exercise
jurisdiction over cases arising under its federal question or diversity jurisdiction, if those
cases are also subject to tribal jurisdiction, until the parties have exhausted their tribal
remedies.’” Aplt. App. at 68 (quoting United States v. Tsosie, 92 F.3d 1037, 1041
(10th Cir. 1996)). And it concluded that “[i]f the Tribal Supreme Court upholds the
lower court’s determination that it has jurisdiction, [Monster] may challenge that ruling
before this Court.” Id. at 70. “But,” the district court further concluded, “unless and until
that happens, because the exhaustion of tribal court remedies is required before
[Monster’s] claims may be considered by a federal court, and because [Monster] has not
exhausted its tribal court remedies, this case is hereby DISMISSED without prejudice.”
Id.
Monster filed a motion for reconsideration, which the district court denied, and
then Monster filed a notice of appeal.
While this appeal was pending, on February 18, 2022, the Iowa Tribe Supreme
Court dismissed Monster’s interlocutory appeal “for failure of the would-be Appellant to
comply with the provisions of Iowa Tribe of Oklahoma Appellate Procedure.” Aplee.
App. at 139.
Two days after the Iowa Tribe filed its response brief in this appeal, on March 16,
2022, Monster filed a new complaint in the Western District of Oklahoma that sought
essentially the same relief as the complaint underlying this appeal.
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Monster later filed its motion to dismiss this appeal, asserting its new district court
case rendered this appeal of the district court’s dismissal of its first case moot. The Iowa
Tribe responded by arguing the new case did not render this appeal moot but stating that
it did not oppose dismissal. The Iowa Tribe also filed a Federal Rule of Appellate
Procedure 38 motion for attorneys’ fees and double costs as a sanction for Monster’s
frivolous appeal and tactics in prosecuting the appeal. The Iowa Tribe asks that the
sanction be imposed jointly and severally on Monster and its attorney.
II. The Motion to Dismiss this Appeal
Federal Rule of Appellate Procedure 42 governs voluntary dismissals and provides
that “[a]n appeal may be dismissed on the appellant’s motion on terms agreed to by the
parties or fixed by the court.” Fed. R. App. P. 42(b). “[I]t is within our discretion
whether to accede to a litigant’s request to terminate his appeal.” United States v.
DeShazer, 554 F.3d 1281, 1285 n.1 (10th Cir. 2009). Rule 42(b) “motions are generally
granted, but may be denied in the interest of justice or fairness.” Am. Auto. Mfrs. Ass’n v.
Comm’r, Mass. Dep’t of Env’t Prot., 31 F.3d 18, 22 (1st Cir. 1994).
Monster argues its motion to dismiss should be granted because its new district
court action renders this appeal prudentially moot. See Mot. to Dismiss at 3 (“In our
view, the appeal has been rendered moot, in that . . . [‘]the anticipated benefits of a
remedial decree no longer justify the trouble of deciding the case on the merits.’”
(quoting Winzler v. Toyota Motor Sales U.S.A., Inc., 681 F.3d 1208, 1210 (10th Cir.
2012)).
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The Iowa Tribe responds by stating it “does not oppose dismissal in principle,” but
does “oppose both Monster’s stated reason for dismissal and Monster’s refusal to even
attempt to resolve the allocation of attorneys’ fees and costs.” Resp. to Mot. to Dismiss
at 11; see also id. at 10 (“That is not to say the appeal should not be dismissed. It should.
However, it should be dismissed on the proper grounds . . . .”). And the Iowa Tribe asked
the court to “grant an award of attorneys’ fees and double costs.” Id. at 11–12.
Because both parties want the appeal dismissed, and neither party asserts dismissal
will undermine fundamental fairness or the interests of justice, we grant the motion to
dismiss.
III. The Rule 38 Motion for Fees and Costs
Federal Rule of Appellate Procedure 38 provides that “[i]f a court of appeals
determines that an appeal is frivolous, it may, after a separately filed motion or notice
from the court and reasonable opportunity to respond, award just damages and single or
double costs to the appellee.” Rule 38’s phrase “just damages” includes “attorney’s
fees.” Braley v. Campbell, 832 F.2d 1504, 1510 (10th Cir. 1987) (en banc). Sanctions
are imposed under Rule 38 “to penalize an appellant who takes a frivolous appeal and to
compensate the injured appellee for the delay and added expense of defending the district
court’s judgment.” Burlington N. R.R. v. Woods, 480 U.S. 1, 7 (1987).
“An appeal is frivolous when the result is obvious, or the appellant’s arguments of
error are wholly without merit.” Braley, 832 F.2d at 1510 (internal quotation marks
omitted). As for the scope of a sanctions award, an appeal may be frivolous as filed or as
argued. See id. at 1513–14; see also Finch v. Hughes Aircraft Co., 926 F.2d 1574, 1578–
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79 (Fed. Cir. 1991). An appeal is frivolous as filed when “the judgment by the tribunal
below was so plainly correct and the legal authority contrary to appellant’s position so
clear that there really is no appealable issue.” Finch, 926 F.2d at 1579. In a frivolous-as-
argued appeal, “genuinely appealable issues may exist,” but “the appellant’s contentions
in prosecuting the appeal are frivolous.” Id.In the Rule 38 motion, the Iowa Tribe argues the appeal is (1) frivolous as filed
because the court lacks appellate jurisdiction to entertain it, and (2) frivolous as argued
because Monster’s arguments for reversal fail to grapple with binding precedent that
supports the district court’s order. The Iowa Tribe also complains about Monster’s
conduct on appeal in resisting the Iowa Tribe’s motion for the court to take judicial notice
of filings in the tribal court proceedings and in Monster’s tactic of waiting until after the
Iowa Tribe filed its response brief to file its second district court action and seek
dismissal of this appeal.
A. Appellate Jurisdiction
The Iowa Tribe argues this court clearly lacked jurisdiction under 28 U.S.C.
§ 1291 to entertain an appeal from the district court’s order because the order dismissed
Monster’s action without prejudice, and therefore was not a final order. But our
precedent demands further analysis:
[T]hat a dismissal was without prejudice does not necessarily make it non-
final under section 1291. Rather, in this circuit, whether an order of
dismissal is appealable generally depends on whether the district court
dismissed the complaint or the action. A dismissal of the complaint is
ordinarily a non-final, nonappealable order (since amendment would
generally be available), while a dismissal of the entire action is ordinarily
final.
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Despite our use of this complaint/action terminology, we have long
recognized that the requirement of finality imposed by section 1291 is to be
given a practical rather than a technical construction. In evaluating finality,
therefore, we look to the substance and objective intent of the district
court’s order, not just its terminology.
Moya v. Schollenbarger, 465 F.3d 444, 448–49 (10th Cir. 2006) (internal quotation
marks and citations omitted).
The district court’s order states that the “case” is dismissed, Aplt. App. at 70, and
the court entered a separate judgment stating “the matter” is dismissed, id. at 71. Also,
the court’s denial of Monster’s motion for reconsideration states the “action has been
dismissed.” Id. at 82. Based on these statements, there is a non-frivolous argument this
court has appellate jurisdiction under § 1291. Not only that, but the Iowa Tribe fails to
address Monster’s contention that the court has jurisdiction under 28 U.S.C. § 1292(a),
which provides jurisdiction over interlocutory appeals from orders refusing injunctions,
among other things. We therefore do not agree with the Iowa Tribe that the appeal was
frivolous as filed due to the absence of appellate jurisdiction.
B. Merits of the Appeal
The Iowa Tribe also argues the court should impose Rule 38 sanctions because
Monster’s appeal is frivolous as argued. On this point, we agree.
This court has imposed sanctions where an appellant’s “position [was] not
warranted by existing law or a good faith argument for the extension, modification or
reversal of existing law,” and where the appellant made “no effort” “to distinguish
existing case law, to bring about a reasoned extension or change in the law, or to point
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out actual errors.” Casper v. Comm’r, 805 F.2d 902, 905 (10th Cir. 1986), overruled on
other grounds by Wheeler v. Comm’r, 521 F.3d 1289, 1291 n.1 (10th Cir. 2008).
Monster’s argument section of its opening brief spans under two pages. See Aplt.
Opening Br. at 12–13. It does not address the basis for the district court’s
order—namely, that principles of comity and the tribal court exhaustion doctrine require
federal courts to refrain from exercising jurisdiction until the tribal court has had a full
opportunity to consider its jurisdiction. To the extent Monster challenges the district
court’s dismissal order at all, it contends only that the Tenth Circuit should establish
safeguards for tribal exhaustion dismissals that include requiring the defendant to respond
and giving the plaintiff a chance to reply to this response. In making this argument,
Monster cites a Sixth Circuit case, Tingler v. Marshall, 716 F.2d 1109 (6th Cir. 1983),
overruled by statute as stated in Coleman v. Tollefson, 733 F.3d 175, 177 (6th Cir. 2013),
that established similar safeguards to be employed before dismissing a case sua sponte on
the merits. But Monster does not address United States v. Tsosie, 92 F.3d 1037, 1039,
1041 (10th Cir. 1996), in which this court held district courts have “discretion to raise
comity issues sua sponte” and affirmed the district court’s dismissal of the action in that
case under the tribal court exhaustion doctrine without imposing any procedural
conditions precedent on the district court’s dismissal. Nor does Monster explain why the
procedural safeguards from Tingler should be applied to a non-merits dismissal, why the
opportunity for a litigant to file a motion for reconsideration, like Monster did, does not
suffice to protect plaintiffs from erroneous dismissals, or why the district court’s failure
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to impose Monster’s suggested procedural safeguards harmed it given that the district
court considered Monster’s arguments in connection with the motion for reconsideration.
We conclude Monster’s appeal was frivolous as argued and order Monster’s
attorney to pay the Iowa Tribe’s reasonable attorneys’ fees incurred in connection with
this appeal. We deny the Iowa Tribe’s request for costs as a sanction under Federal Rule
of Appellate Procedure 38. 2
IV. Conclusion
We grant Monster’s motion and dismiss this appeal. We grant the Iowa Tribe’s
motion for sanctions as set forth herein. We remand to the district court for the limited
purpose of determining the amount of the monetary award. The pending motion for
judicial notice is denied as moot.
Entered for the Court
Timothy M. Tymkovich
Chief Judge
2
This ruling has no bearing on any party’s ability to seek costs under Federal
Rule of Appellate Procedure 39.
9