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Stockbridge-Munsee Community v. State

United States District Court, W.D. Wisconsin

February 2, 2018


          OPINION & ORDER


         This case involves a dispute over competing casinos operated by two Indian tribes in Wisconsin. The court granted defendant the Ho-Chunk Nation's motion for judgment on the pleadings and dismissed it from the case. Dkt. 67. The court concluded that the claims by plaintiff, the Stockbridge-Munsee Community, against the Ho-Chunk accrued in 2008, when the Ho-Chunk opened the Wittenberg casino, which the Stockbridge-Munsee allege violates the Ho-Chunk gaming compact. Therefore, the court concluded, the Stockbridge-Munsee's claims against the Ho-Chunk fell outside the six-year statute of limitations.

         The court noted that the Stockbridge-Munsee's claims against defendants the State of Wisconsin and its governor, Scott Walker, might be untimely, too. But rather than dismiss those claims outright, it allowed the remaining parties to address the timeliness of the remaining claims. The parties have done so. Dkt. 71 and Dkt. 72. The claims against the State and Walker are also time-barred, as explained below.

         But there's more. The Stockbridge-Munsee, hoping to keep their case alive, also moved for leave to file an amended complaint containing new allegations against the state, Walker, and the Ho-Chunk. Dkt. 75. The motion to amend drew not only opposition, but a motion for sanctions by the Ho-Chunk. Dkt. 82. The Stockbridge-Munsee's arguments in support of their motion to amend are particularly weak, and the court will deny the Stockbridge-Munsee leave to amend. But the court will deny the Ho-Chunk's motion for sanctions. The Stockbridge-Munsee's arguments are borderline, but the court does not want to punish unsuccessful but good-faith advocacy. So in a close case like this one, the court will decline to impose sanctions, particularly when the burden of defending the questionable pleading is modest, as it is here.

         The court will dismiss the state's supplemental-jurisdiction counterclaim without prejudice and direct the clerk of court to close the case.

         A. Proposed amended complaint

         The court begins with the Stockbridge-Munsee's motion for leave to amend their complaint. To review, the Stockbridge-Munsee alleged in their original April 19, 2017 complaint that the Ho-Chunk's Wittenberg casino, which is located on the Wittenberg Parcel, violates the Ho-Chunk compact in two ways: first, the Wittenberg Parcel has always been ineligible for any gaming activity under the compact; and second, the Wittenberg casino operates as a gaming facility (a facility whose primary business purpose is gaming), which is barred by the compact. The Stockbridge-Munsee alleged that these violations pre-dated the planned winter 2018 expansion of the Wittenberg casino and would continue as the Wittenberg casino operates post-expansion. The court determined that these claims accrued in 2008, when the Wittenberg casino opened, and therefore fell outside the applicable six-year limitations period.

         Now the Stockbridge-Munsee move for leave to amend their complaint to add three categories of allegations, all of which are aimed at evading the statute of limitations. First, they allege that they could not assert their claims earlier because the state and the Ho-Chunk fraudulently concealed the factual basis for their claims. Second, they allege that the Wittenberg casino is a public nuisance, which they argue tolls the statute of limitations. Finally, they allege in the alternative that the Wittenberg casino originally operated as an ancillary facility (a facility whose primary business purpose is not gaming) and will begin to operate as a gaming facility only after the winter 2018 expansion.

         Under Federal Rule of Civil Procedure 15(a)(2), the court should freely grant leave to amend when justice so requires. The court need not grant leave “when there is undue delay, bad faith, dilatory motive, undue prejudice to the opposing party, or when the amendment would be futile.” Bethany Pharmacal Co. v. QVC, Inc., 241 F.3d 854, 861 (7th Cir. 2001). The first two proposed amendments are more properly considered motions for reconsideration of the court's October 25 order; the third is a substantive amendment. All three categories of claims would be futile, so the court will deny the Stockbridge-Munsee leave to amend.

         1. Fraudulent concealment

         First, the Stockbridge-Munsee want to amend their complaint to include allegations of fraudulent concealment. They labeled this section of their amended complaint “Count VIII: The state's and Ho-Chunk's fraudulent concealment of intent to create amendments to the Ho-Chunk compact that deprive Stockbridge of the intended benefits of its own compact.” Dkt. 75-1, at 17. Despite this label, they argue that they do not intend to bring substantive fraudulent concealment claims but rather claims for “breach of the Ho-Chunk Compact's inherent covenant of good faith and fair dealing” and “breach of the SMC Compact” in this section. Dkt. 84, at 22. The amended complaint does not contain a short and plain statement of breach-of-contract claims showing that the Stockbridge-Munsee are entitled to relief, as required by Federal Rule of Civil Procedure 8(a), and again, such claims would be barred by the statute of limitations, so the court will not grant leave to amend to assert them.

         The Stockbridge-Munsee's briefing indicates that they actually intend to assert the doctrine of fraudulent concealment in an attempt to toll the statute of limitations. See Dkt. 76, at 6. They argue that in 2003, the state and the Ho-Chunk represented that despite the amendments to the Ho-Chunk compact's definition of ancillary facility, the gaming activities on the Wittenberg Parcel “would never be more than mini-mart gambling.” Dkt. 73, ¶ 3. But, so the argument goes, a May 18, 2017 filing by the Ho-Chunk directly contradicts the 2003 representations and indicates that the ancillary facility definition was intentionally amended to allow the Ho-Chunk to operate the Wittenberg casino-which is more than mini-mart gambling-on the Wittenberg Parcel.

         An amendment to the Stockbridge-Munsee's pleading would be unnecessary to assert this doctrine, as “plaintiffs need not anticipate and attempt to plead around all potential defenses, ” including statute-of-limitations defenses. Xechem, Inc. v. Bristol-Myers Squibb Co., 372 F.3d 899, 901 (7th Cir. 2004). The Stockbridge-Munsee could have asserted the fraudulent-concealment doctrine promptly after the Ho-Chunk raised the statute-of-limitations defense in its answer on May 18. By asserting the doctrine now, they essentially ask the court to reconsider its October 25 ruling. But “[r]econsideration is not an appropriate forum for rehashing previously rejected arguments or arguing matters that could have been heard during the pendency of the previous motion.” Caisse Nationale de Credit Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1270 (7th Cir. 1996). So even if the Stockbridge-Munsee had properly moved for reconsideration, the court would deny the motion.

         And the bottom line is that even if the Stockbridge-Munsee had raised the fraudulent-concealment doctrine in response to the Ho-Chunk's motion for judgment on the pleadings, it wouldn't have succeeded. The doctrine protects plaintiffs “from the expiration of claims the factual basis for which was shrouded by the veil of fraudulent concealment.” In re Cooper Antitrust Litig., 436 F.3d 782, 792 (7th Cir. 2006) (quoting Morton's Market, Inc. v. Gustafson's Dairy, Inc., 198 F.3d 823, 836 (1999), amended by211 F.3d 1224 (11th Cir. 2000)). But here, the alleged fraudulent concealment did not conceal the factual basis for the Stockbridge-Munsee's claims, namely the state's approval of gaming activities on the Wittenberg Parcel and the Ho-Chunk's engaging in gaming activities there. The Stockbridge-Munsee simply didn't need to know the intent behind the 2003 amendment to the Ho-Chunk compact to bring their ...

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