MMMG, LLC and Mobile Mike Promotions, Inc. v. Seminole Tribe of Florida, Inc., d/b/a Tribe, Inc., Tony Sanchez, Jr., etc. ( 2016 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
MMMG, LLC and MOBILE MIKE PROMOTIONS, INC.,
Appellants,
v.
SEMINOLE TRIBE OF FLORIDA, INC., d/b/a TRIBE, INC., TONY
SANCHEZ, JR., individually, LARRY HOWARD, individually,
SALLY TOMMIE, individually, ANDREW BOWERS, individually,
MIKE ULIZIO, individually, STEVEN OSCEOLA, individually and
CHRIS OSCEOLA, individually,
Appellees.
No. 4D15-235
[June 15, 2016]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Carlos A. Rodriguez, Judge; L.T. Case No. CACE-14-
00419 (14).
Gary S. Phillips and Jeffrey B. Shalek of Phillips, Cantor, Shalek, Rubin
& Pfister, P.A., Hollywood, for appellant.
Edward G. Guedes and Alicia H. Welch of Weiss Serota Helfman Cole &
Bierman, P.L., Coral Gables for appellee, Seminole Tribe of Florida, Inc.
d/b/a Tribe, Inc.
GROSS, J.
MMMG, LLC and Mobile Mike Promotions, Inc. appeal the involuntary
dismissal of their complaint against a federal tribal corporation affiliated
with the Seminole Tribe. We affirm the dismissal because the tribal
corporation enjoyed sovereign immunity from suit, which was not
effectively waived according to the procedure required in the corporation’s
charter and bylaws.
Given the long history of exploitation of Native Americans, Congress
has enacted statutes designed to protect tribes and tribal corporations.
These statutes have been construed by federal and Florida courts as
placing the onus on the non-tribal party to ensure that any waiver of
sovereign immunity be executed in strict compliance with applicable tribal
operating documents; common law doctrines such as apparent authority
do not override the protection provided by federal law.
The History Between Mobile Mike and The Seminole
Tribe of Florida, Inc.
Mobile Mike, a South Florida radio personality, owns Mobile Mike
Promotions, Inc. (the “Production Company”). In 2011, the Production
Company and the Seminole Tribe of Florida, Inc. (“STOFI”), a corporate
entity of the Seminole Tribe (the “Tribe”), entered into an advertising joint
venture called MMMG, LLC (the “Joint Venture”). STOFI later broke the
Joint Venture agreement. The Production Company and the Joint Venture
together filed a ten-count complaint against STOFI and other tribal
members individually (collectively the “Defendants”). STOFI moved to
dismiss, asserting the trial court lacked jurisdiction due to STOFI’s
sovereign immunity. After a five-day evidentiary hearing, the trial court
found that STOFI was protected by sovereign immunity, which it had not
waived pursuant to STOFI’s charter and bylaws, and dismissed STOFI as
a party.
The Seminole Tribe and STOFI
The Tribe is a federally recognized Native American tribe governed by a
Tribal Council, which is duly chartered and recognized by the U.S.
Department of the Interior, pursuant to section 16 1 of the Indian
Reorganization Act of 1934 (“the Act”). 2 STOFI is a tribal corporation, also
chartered and approved by the U.S. Department of the Interior, pursuant
to section 17 of the Act. 3 STOFI’s purpose is to engage in commercial
enterprises for the economic betterment of its tribal members. However,
STOFI has no control over any aspect of the Tribe’s other endeavors,
including Seminole Gaming, the Tribe’s gaming operations.
STOFI’s ownership is vested in the approximately 4,000 registered
members of the Tribe and a board of directors controls its operations. With
respect to STOFI’s sovereign immunity, STOFI’s Charter had previously
contained “sue and be sued” language which was removed in 1996 and
replaced with Article VI, Section 9, which allows a waiver of STOFI’s
1 25 U.S.C. § 476 (2012).
2 25 U.S.C. §§ 461-94 (2012).
3 25 U.S.C. § 477 (2012). Most of the case law relevant to these provisions refer
to Section 16 and 17 entities, which is how they will be referred to for consistency.
A Section 16 entity is defined in 25 U.S.C. § 476 and a Section 17 entity is defined
in 25 U.S.C. §477.
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sovereign immunity from suit, but only if expressly stated by
contract that such is the case and that such waiver shall not
be deemed a consent by the said corporation or the United
States to the levy of any judgment, lien or attachment upon
the property of [STOFI], other than income or chattels
especially pledged or assigned pursuant to such contract.
Pursuant to STOFI’s Bylaws, any delegation of authority to an officer,
such as waiving sovereign immunity, must be effected by a written Board
resolution and must specify the nature of the authority granted and any
imposed limitations. Additionally, in matters that have not been
specifically ordered by the Board, the president should call these matters
to the Board’s attention so that it has the opportunity to decide the issues,
set the policy, or establish the procedure the corporation is to follow.
While the Tribe and its Council are a separate entity from STOFI, the
rules governing how the Tribe waives sovereign immunity are relevant to
issues raised in this appeal. The Tribe enacted a 1995 Ordinance
addressing how immunity could lawfully be waived on behalf of the Tribe
and “its subordinate economic and governmental units, its tribal officials,
employees and authorized agents.” To waive immunity, the Ordinance
requires clear, express and unequivocal consent by the Tribe or the United
States Congress. While STOFI does not claim on appeal that the
Ordinance applies to STOFI’s process for waiving sovereign immunity, it
would apply to any waiver on the part of the Tribe or Seminole Gaming,
and the contract at issue purports to grant rights belonging to those
entities.
The Joint Venture
In late 2011, STOFI entered into a non-binding Letter of Intent with the
Production Company to create the Joint Venture, which would provide
promotional, advertising, and marketing services. Although STOFI did not
have authority to contract for advertising rights with respect to the Tribe
or Seminole Gaming, STOFI did agree to make a good faith effort to have
the Joint Venture designated as the agency of record not just for STOFI
but also, subject to the Tribe’s approval, the Tribe and “all other Seminole
related entities.” The Letter of Intent would be reduced to a “Definitive
Agreement” after approval was obtained from STOFI’s Board. The
Agreement would be governed by the laws of the State of Florida and the
venue would be in Broward County, Florida. The Letter of Intent was
signed by STOFI’s board president and Mobile Mike.
The Board passed a resolution in December 2011, which ratified the
Letter of Intent. The resolution states the purpose of the Joint Venture is
to provide promotional activities “to Tribal entities and events as well as to
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parties not affiliated with [STOFI].” The resolution reiterated the Letter of
Intent’s essential terms and stated that STOFI’s “sole financial exposure
will be to contribute the organizational expenses of the venture.” STOFI’s
president was authorized to take all necessary steps to execute the
Definitive Agreement.
Neither the Letter of Intent nor the Board’s Resolution addressed waiver
of sovereign immunity.
In January 2012, the Production Company and STOFI entered into a
Regulations and Operating Agreement for the Joint Venture, which was
signed by STOFI’s president and Mobile Mike. Article VIII, Section 1 of the
Agreement is the only provision relevant to this appeal. It confirms that
the Operating Agreement is governed by the laws of the State of Florida,
without regard to conflict of law principles.
The parties submitted two different versions of the Agreement to the
trial court. Mobile Mike’s version states that “[t]he parties waive any rights
pursuant to any available sovereign or governmental immunity.” STOFI’s
version contained no such immunity waiver.
The Complaint
Mobile Mike, on behalf of the Production Company and the Joint
Venture, filed a ten-count complaint against STOFI and individual tribal
members involved with the Agreement, asking for injunctive relief and
damages.
Mobile Mike claimed to have invested hundreds of thousands of dollars
into the Joint Venture. By July 2012, Mobile Mike asserted that STOFI,
the Tribe, and Seminole Gaming had ceased sending work to the Joint
Venture, diverting the work to a tribal member who owned a competing
advertising agency. No further payments pursuant to the Operating
Agreement were made to the Joint Venture and in June 2013 Mobile Mike
was officially “advised” that the Operating Agreement would not be
honored.
The Motion to Dismiss
The Defendants moved to dismiss the complaint for lack of subject
matter jurisdiction, asserting the claims were barred by sovereign
immunity, pursuant to section 17 of the Act. According to the motion, the
sovereign immunity waiver found in Mobile Mike’s version of the Operating
Agreement was a “single boilerplate sentence that Mobile Mike
fraudulently introduced into the Agreement after execution and without
STOFI’s or [the president’s] knowledge.”
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In the alternative, the motion contended that any waiver of immunity
was “unauthorized and ineffectual” because the Board had not expressly
waived immunity. The motion pointed out that during the current
president’s tenure, STOFI had never waived immunity in connection with
any commercial dealing without a Board resolution, which must be
enacted at a public Board meeting and specify the nature and scope of the
waiver. The motion claimed the Board did not authorize the president to
execute an agreement waiving immunity.
Motion to Dismiss Hearing and Circuit Court Order
A five-day evidentiary hearing was held on STOFI’s Motion to Dismiss.
Much of the testimony focused on which version of the Operating
Agreement was authentic. This testimony is largely irrelevant to this
appeal because the trial court treated Mobile Mike’s version of the
Operating Agreement as true. The trial court decided the case as a matter
of law, focusing on whether the waiver in Mobile Mike’s version was
sufficient to eliminate STOFI’s sovereign immunity.
The trial court issued an extensive order granting in part STOFI’s
motion to dismiss. The order noted that the trial court could properly
consider evidence outside the four corners of the complaint when
considering a motion to dismiss on sovereign immunity grounds. As
conclusions of fact, the trial court found that STOFI’s Charter and Bylaws
provide that the Board alone can waive sovereign immunity and the
president does not have authority to waive [immunity], absent explicit
authorization from the Board. No immunity waiver was ever approved by
the Tribal Council, pursuant to the Tribal Ordinance, or by STOFI Board
resolution. The Letter of Intent was the only written agreement ratified by
the Board, and it did not contain a sovereign immunity waiver.
As a conclusion of law, the order determined that courts draw no
distinction between the Tribe and the commercial activity of STOFI;
therefore, “STOFI is entitled to sovereign immunity absent a waiver in their
charter, valid waiver in the contract or through an Act of Congress waiving
immunity.”
Once STOFI demonstrated it was entitled to sovereign immunity, the
burden shifted to Mobile Mike to prove immunity had been waived. The
court reasoned that a “proper and enforceable waiver of sovereign
immunity is dependent on compliance with the sovereign entity’s rules for
waiving immunity.” STOFI’s Bylaws provide that immunity can be waived
only with Board authority and nothing submitted showed such approval.
The court determined the purported immunity waiver in Mobile Mike’s
version of the Agreement also violated STOFI’s Charter, which requires a
waiver to pledge income or chattels in the event a judgment, lien or
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attachment is levied against STOFI. The immunity waiver contained no
such pledge.
While the court made no finding as to which version of the Agreement
was the actual contract signed by the parties, it determined as a matter of
law that the purported waiver of immunity was “void and ineffective
against STOFI and the STOFI defendants acting within the scope of their
duties on the council.” The order concluded that the trial court lacked
subject matter jurisdiction, based on STOFI’s sovereign immunity, and
dismissed all counts against STOFI.
Sovereign Immunity Protects a Section 17 entity such as STOFI,
Absent a Valid Contractual Waiver
Native American sovereign immunity is a “consideration [which]
determines whether a court has jurisdiction to hear an action.” Taylor v.
Ala. Intertribal Council Title IV J.T.P.A., 261 F.3d 1032, 1034 (11th Cir.
2001). The United States Supreme Court has held that Native American
“tribes enjoy immunity from suit on contracts, whether those contracts
involve governmental or commercial activities and whether they were made
on or off a reservation.” Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S.
751, 760 (1998). “As a matter of federal law, [a Native American] tribe is
subject to suit only where Congress has authorized the suit or the tribe
has waived its immunity.” Id. at 754.
The Indian Reorganization Act of 1934 was Congress’s first attempt to
incorporate Native American tribes into the United States’ legal and
political systems as separate political entities. Alex Tallchief Skibine,
Redefining the Status of Indian Tribes Within “Our Federalism”: Beyond the
Dependency Paradigm, 38 CONN. L. REV. 667, 675 (2006). The Act
authorized the tribes to adopt constitutions, with the Secretary of the
Department of the Interior’s approval, and one of the Act’s key purposes
was to encourage tribal economic development. Matthew L.M. Fletcher,
The Supreme Court and Federal Indian Policy, 85 NEB. L. REV. 121, 144
(2006).
Under sections 16 and 17, the Act provides two different ways for Native
American tribes to organize and operate. Houghtaling v. Seminole Tribe of
Fla., 611 So. 2d 1235, 1236 (Fla. 1993). “Section 16 prescribes how tribes
are to operate as a government” while “section 17 prescribes their
authority to operate as a business entity.” Id. at 1237. It is settled law
that Section 16 entities are granted sovereign immunity unless the tribe
or Congress waives such immunity. See Md. Cas. Co. v. Citizens Nat’l Bank
of W. Hollywood, 361 F.2d 517, 520 (5th Cir. 1966) [hereinafter Maryland
Casualty] (citing United States v. U.S. Fid. & Guar. Co., 309 U.S. 506, 512
(1940)).
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Section 17 of the Act provides:
The Secretary of the Interior may, upon petition by any tribe,
issue a charter of incorporation to such tribe: Provided, That
such charter shall not become operative until ratified by the
governing body of such tribe. Such charter may convey to the
incorporated tribe the power to purchase, take by gift, or
bequest, or otherwise, own, hold, manage, operate, and
dispose of property of every description, real and personal,
including the power to purchase restricted Indian lands and
to issue in exchange therefor interests in corporate property,
and such further powers as may be incidental to the conduct
of corporate business, not inconsistent with law; but no
authority shall be granted to sell, mortgage, or lease for a
period exceeding twenty-five years any trust or restricted
lands included in the limits of the reservation. Any charter so
issued shall not be revoked or surrendered except by Act of
Congress.
25 U.S.C. § 477 (2012). Notably, this section does not address sovereign
immunity.
The Florida Supreme Court has recognized that the purpose of section
17 is to create a separate entity from the tribal political body that is “more
capable of obtaining credit and otherwise expediting the business of the
tribe, while removing the possibility of federal liability for activities of that
nature. As a result, the powers, privileges and responsibilities of these
tribal organizations materially differ [from Section 16 entities].”
Houghtaling, 611 So. 2d at 1237-38 (quoting the Solicitor of the
Department of the Interior in opinion M-36515, 65 I.D. 483, 484 (1958)).
In Florida, state courts lack subject matter jurisdiction over a Section 16
entity unless that entity has waived sovereign immunity or it has been
rescinded by Congress. Id. at 1239. Additionally, a Section 17 entity can
be sued only if allowed by its corporate charter. Id. As will be discussed
below, this last statement makes sense only if the Houghtaling court
presumed that Section 17 entities are entitled to sovereign immunity
under the Act.
STOFI’s Sovereign Immunity
“There are three ways [a Native American] tribe may incorporate: Under
the federal statute, 25 U.S.C. § 477 [section 17 of the Act]; under state law;
and under tribal law.” Inglish Interests, LLC v. Seminole Tribe of Fla., Inc.,
No. 2:10-CV-367-Ftm-29DNF, 2011 WL 208289, *3 (M.D. Fla. Jan. 21,
2011). The Tribe incorporated STOFI under section 17 of the Act and was
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granted a corporate charter in 1957 to form a “Federal corporation” with
perpetual succession. Id. at *1-*2 (quoting Art. III, § 1 of STOFI’s charter).
STOFI possesses only those powers granted by the Secretary of the
Interior by the terms of its charter; the Act itself grants no powers to
corporate tribal entities. Id. at *1 (citing Maryland Casualty, 361 F.2d at
520). The Department of the Interior issued a corporate charter to STOFI
“in order to further the economic development of the Tribe, secure an
assured economic independence for Tribe members, and provide for the
proper exercise of various functions by the Tribe which had previously
been performed by the Department of the Interior.” Id. at *2.
Mobile Mike asserts it is well established that corporate tribal entities
have no inherent immunity of their own. While several jurisdictions have
found that certain corporate tribal entities were not protected by sovereign
immunity, Mobile Mike’s assertion is an overstatement of the law. See
Trudgeon v. Fantasy Springs Casino, 84 Cal. Rptr. 2d 65, 69 (1999); Veeder
v. Omaha Tribe of Neb., 864 F. Supp. 889 (N.D. Iowa 1994); Wippert v.
Blackfeet Tribe, 859 P.2d 420, 427 (Mont. 1993), overruled on other
grounds, Green v. Gerber, 303 P.3d 729 (Mont. 2013). These cases are
distinguishable because they either involve Section 17 entities that waived
immunity in their corporate charter, or, like the tribal casino in Trudgeon,
were governmental entities not incorporated under section 17 of the Act.
In fact, it is more accurate to say that the jurisdictions confronting Section
17 entities have found they were protected by sovereign immunity, unless
that immunity was expressly waived by the corporate charter or by
agreement.
Federal Precedent Supporting Section 17 Immunity
No Florida state court has directly addressed whether STOFI has
sovereign immunity. We find persuasive the analyses of several federal
courts that have held Section 17 entities have immunity, unless such
immunity was waived by contract.
Courts should construe statutes liberally in favor of Native American
tribes, so ambiguous provisions should be interpreted to their benefit.
Memphis Biofuels, LLC v. Chickasaw Nation Indus., Inc., 585 F.3d 917, 921
(6th Cir. 2009) (citing Montana v. Blackfeet Tribe of Indians, 471 U.S. 759,
766 (1985)); see also Sanderlin v. Seminole Tribe of Fla., 243 F.3d 1282,
1285 (11th Cir. 2001). The Sixth and Ninth Circuits have held that section
17’s silence regarding sovereign immunity should not be construed as
abrogating such immunity. See Memphis Biofuels, 585 F.3d at 920-21;
see also Am. Vantage Cos., Inc. v. Table Mountain Rancheria, 292 F.3d
1091, 1099 (9th Cir. 2002) (“A tribe that elects to incorporate does not
automatically waive its tribal sovereign immunity by doing so.”).
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The Sixth Circuit concluded “that the better reading of Section 17 is
that it creates ‘arms of the tribe’ that do not automatically forfeit tribal-
sovereign immunity.” Memphis Biofuels, 585 F.3d at 921. However, a tribe
may choose to expressly waive its sovereign immunity either in the Section
17 entity’s charter or by agreement. Id. The Tenth circuit agrees, holding
that immunity for subordinate economic tribal entities is necessary
because it “directly protects the sovereign Tribe's treasury, which is one of
the historic purposes of sovereign immunity in general.” Breakthrough
Mgmt. Grp., Inc. v. Chukchansi Gold Casino & Resort, 629 F.3d 1173, 1183
(10th Cir. 2010) (quoting Allen v. Gold Country Casino, 464 F.3d 1044,
1047 (9th Cir. 2006)).
In 1966, the Fifth Circuit held that STOFI was immune from a
garnishment proceeding. Maryland Casualty, 361 F.2d at 522. The court
presumed STOFI had immunity and looked to its charter to see if that
immunity had been waived. Id. at 521. At that time, the charter contained
a “sue and be sued” 4 clause, which, significantly, contained qualifying
language still found in the current charter provision. Id. Section 9
provided STOFI could
sue or be sued; but the grant or exercise of such power to sue
and to be sued shall not be deemed a consent by the said
corporation or the United States to the levy of any judgment,
lien or attachment upon the property of the Seminole Tribe of
Florida, Inc., other than income or chattels especially pledged
or assigned.
Id.This limiting language was written into the charter by the Secretary of
the Interior to protect Tribal property that was not pledged or assigned, so
the provision should be liberally construed and “all doubtful expressions
therein resolved in favor of the Seminole Tribe.” Id. “To construe the
immunity to suit as not applying to suits on liabilities arising out of private
transactions would defeat the very purpose of Congress in not relaxing the
immunity. . . .” Id. at 521-52. Because garnishment is akin to attachment,
the court found that even with the “sue and be sued” language, STOFI was
immune from the garnishment proceeding. Id. at 522.
In 2011, the Middle District of Florida also concluded that Section 17
entities, and STOFI specifically, were entitled to sovereign immunity.
Inglish, 2011 WL 208289, at *5. The opinion relied on Eleventh Circuit
precedent that found the Tribe does not lose its sovereign immunity simply
4As is indicated above, this “sue and be sued” language was removed from
STOFI’s Charter in 1996, well before the Operating Agreement was signed.
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by incorporating under Section 17 and Native American sovereign
immunity has been extended by case law “to entities other than the literal
‘tribe.’” Id. (citing Taylor, 261 F.3d at 1036). The court acknowledged that
Congress knows how to abrogate sovereign immunity when that is its
intent, so failure to expressly grant immunity in section 17 does not mean
that such immunity is waived. Id.
Inglish observed that while a Section 17 entity is protected by sovereign
immunity, its corporate charter may waive that immunity. Id. at *6.
STOFI’s charter presumes STOFI has sovereign immunity and does not
waive or consent to suit. Id. A tribal corporation may also expressly waive
immunity by agreement, which STOFI did not do, so the court determined
it lacked subject matter jurisdiction over the case. Id. (citing Tamiami
Partners Ltd. ex rel Tamiami Dev. Corp. v. Miccosukee Tribe of Indians of
Fla., 63 F.3d 1030, 1048 (11th Cir. 1995)).
The Southern District of Florida has reached the same conclusion as
Inglish. See Lujen Brands, LLC v. Seminole Tribe of Fla., Inc. No. 0:14-cv-
60679 (Sept. 18, 2014). In Lujen, the court considered whether STOFI had
sovereign immunity and if so, what impact that would have on the merits
discovery in the case. Id. STOFI argued that “because it has sovereign
immunity unless it waives such immunity in its Charter or by contract,
the only proper jurisdictional discovery against it concerning sovereign
immunity goes to waiver, not to whether it is a subordinate economic entity
of the [Tribe].” Id. Agreeing, the court found that based on binding federal
precedent, STOFI was “entitled to sovereign immunity unless and until it
waives such immunity.” Id. (citing Maryland Casualty, 361 F.2d at 520-
22 and Inglish, 2011 WL 28289 at *5-*6).
Florida Precedent Addressing STOFI’s Immunity
This Court has held that STOFI was entitled to sovereign immunity
from the state’s attempt to collect taxes. Askew v. Seminole Tribe of Fla.,
Inc., 474 So. 2d 877 (Fla. 4th DCA 1985). We found the fact that STOFI
was engaged in a commercial enterprise, as opposed to governmental, was
“not material,” because “[i]t is in such enterprises and transactions that
the [Native American] tribes and the [Native Americans] need protection.”
Id. at 880. It stands to reason that if STOFI had sovereign immunity
protection against state taxes then STOFI has immunity in all commercial
endeavors, unless otherwise waived by contract.
Additionally, the Florida Supreme Court’s holding in Houghtaling would
be illogical if STOFI did not have sovereign immunity. The court
acknowledged that the purpose of section 17 is to remove the possibility
of federal liability for tribal economic activities. Houghtaling, 611 So. 2d
at 1237-38. The court held that a Section 17 entity could be sued only if
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allowed by its corporate charter. Id. at 1240. This statement presupposes
that such an entity is granted immunity by the Act.
To summarize, it is undisputed that STOFI’s Charter contains no “sue
and be sued” clause or other waiver of sovereign immunity. We agree with
those courts concluding that absent such waiver, Section 17 entities like
STOFI are protected by sovereign immunity, a position that coincides with
the policy behind granting immunity to tribal organizations.
The Circuit Court Correctly Concluded That There Was No Valid
Waiver of STOFI’s Sovereign Immunity
A motion to dismiss is a proper procedural vehicle to challenge
jurisdiction based on sovereign immunity. See Houghtaling, 611 So. 2d at
1236; Seminole Police Dep’t v. Casadella, 478 So. 2d 470 (Fla. 4th DCA
1985); see also Venetian Salami Co. v. Parthenais, 554 So. 2d 499, 503
(Fla. 1989) (recognizing the necessity of a “limited evidentiary hearing in
order to determine the jurisdiction issue,” in case involving question of
personal jurisdiction). The burden was on Mobile Mike to establish a
waiver of STOFI’s immunity. See Seminole Tribe of Fla. v. McCor, 903 So.
2d 353, 360 (Fla. 2d DCA 2005) (stating once the Tribe demonstrated
through affidavits that it was entitled to sovereign immunity, the burden
shifted to the other party to rebut those affidavits); Cupo v. Seminole Tribe,
860 So. 2d 1078, 1079 (Fla. 1st DCA 2003) (affirming dismissal of claim
against Tribe for lack of subject matter jurisdiction where claimant “failed
to show a clear, express and unmistakable waiver of sovereign immunity”).
We agree with STOFI that Florida and federal case law supports the
requirement that a proper and enforceable waiver of sovereign immunity
comply with the sovereign entity’s rules for waiving immunity. See
Houghtaling, 611 So. 2d at 1239-40; Seminole Tribe of Fla. v. Ariz, 67 So.
3d 229 (Fla. 2d DCA 2010); Memphis Biofuels, 585 F.3d at 921.
We follow the Sixth Circuit’s approach in Memphis Biofuels, which
looked to the entity’s charter to determine whether there had been a waiver
of sovereign immunity. Memphis Biofuels, 585 F.3d at 922. The charter
required board approval and, without such approval, immunity remained
intact. Id. Similar to the present situation, a provision in the signed
contract purported to waive all immunities for both parties, but it was
undisputed that the board did not pass a resolution waiving immunity, so
the waiver was found invalid. Id. As discussed above, courts look to a
Section 17 entity’s charter to determine if the entity has agreed to sue and
be sued; it follows that a court should also look to the charter to determine
how immunity may be waived by contract.
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STOFI’s Bylaws require that a sovereign immunity waiver be properly
authorized by the Board through a resolution. Thus, STOFI’s president
did not have the actual authority to waive immunity on his own. In
addition, STOFI’s Charter requires not only a clear and express waiver in
a contract, but also that “such waiver shall not be deemed a consent by
the said corporation or the United States to the levy of any judgment, lien
or attachment upon the property of [STOFI], other than income or chattels
especially pledged or assigned pursuant to such contract.” No such
language was included in Mobile Mike’s version of the Agreement. As
noted by the Fifth Circuit in Maryland Casualty, this limiting language was
written into the Charter by the Secretary of the Interior to protect Tribal
property that was not pledged or assigned. 361 F.2d at 521-22. For this
reason, the provision should be liberally construed and “all doubtful
expressions therein resolved in favor of the Seminole Tribe.” Id.Conclusion
Even assuming the validity of the waiver provision in Mobile Mike’s
version of the operating agreement, we agree with the trial court that
waiver was insufficient as a matter of law because it failed to comply with
STOFI’s Charter and Bylaws.
Based on the foregoing, we affirm the circuit court’s order granting the
motion to dismiss.
DAMOORGIAN and KLINGENSMITH, JJ., concur.
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Not final until disposition of timely filed motion for rehearing.
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