pamela m. overton (az bar no. 009062) greenberg … · for the reasons explained herein, it should...

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Pamela M. Overton (AZ Bar No. 009062) GREENBERG TRAURIG, LLP 2375 E. Camelback Rd., Ste. 700 Phoenix, Arizona 85016 Telephone: (602) 445-8000 Facsimile: (602) 445-8100 E-mail: [email protected]; [email protected] Mark Tratos (NV Bar No. 1086) (Pro Hac Vice applied for) GREENBERG TRAURIG, LLP 3773 Howard Hughes Parkway, Ste. 400 North Las Vegas, Nevada 89169 Telephone: (702) 792-3773 Facsimile: (702) 792-9002 Email: [email protected] Troy A. Eid (CO Bar No. 21164) (Pro Hac Vice Applied for) GREENBERG TRAURIG, LLP 1200 17th Street, Suite 2400 Denver, CO 80202 Telephone: (303) 572-6500 Facsimile: (720) 904-7621 Email: [email protected], [email protected] Attorneys for Grand Canyon Skywalk Development, LLC.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA GRAND CANYON SKYWALK DEVELOPMENT, LLC, a Nevada limited liability company,

Plaintiff, v.

‘SA’ NYU WA, Inc., a tribally-chartered corporation established under the laws of the Hualapai Indian Tribe; GRAND CANYON RESORT CORPORATION, a tribally-chartered corporation established under the laws of the Hualapai Indian Tribe; RICHARD WALEMA, SR., WYNONA

NO. 3:12-cv-08030-DGC

RESPONSE IN OPPOSITION TO MOTION FOR JUDICIAL TRANSFER PURSUANT TO LOCAL RULE 42.1

Case 3:12-cv-08030-DGC Document 64 Filed 10/04/12 of 12

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SINYELLA, RUBY STEELE, CANDIDA HUNTER, BARNEY ROCKY IMUS, WAYLON HONGA, CHARLES VAUGHN, SR., each individuals and members of the Hualapai Tribal Council; WANDA EASTER and JACI DUGAN, each individuals and Hualapai Indian Tribe employees and HON. JOLENE COONEY and HON. DUANE YELLOWHAWK, each individuals and judges of the Hualapai Tribal Court,

Defendants.

Plaintiff Grand Canyon Skywalk Development, LLC (“GCSD”) respectfully

opposes Defendant ‘Sa’ Nyu Wa, Inc.’s (“SNW”) Motion for Judicial Transfer Pursuant

to Local Rule 42.1 (“Motion for Transfer”). As explained in detail below, the action

seeking confirmation of the arbitration award, No. 12-cv-08183-FJM (the “Arbitration

Confirmation Action”) and the federal action stayed by this Court, No. 3:12-cv-08030-

DGC (“GCSD II”) (collectively, the “Two Actions”): (i) do not arise from substantially

the same transaction or event; (ii) do not call for determination of substantially the same

questions of law; (iii) do not involve substantially the same parties or property; (iv) do not

involve the same patent, trademark, or copyright; and (v) would not entail substantial

duplication of labor if heard by different Judges. In fact, given the very narrow issues

permitted to be considered by the court in the Arbitration Confirmation Action, judicial

efficiency and expediency are best served by keeping the Two Actions separate and

distinct. Accordingly, GCSD asks this Court to deny SNW’s Motion for Transfer. This

Response in Opposition to SNW’s Motion for Transfer (“Opposition to Transfer”) is

supported by the following Memorandum of Points and Authorities, as well as the case

record, incorporated herein by this reference.


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MEMORANDUM OF POINTS AND AUTHORITIES

I. RELEVANT FACTS

Despite its claims to the contrary, SNW did participate in the arbitration

proceedings, which were governed by American Arbitration Association (“AAA”)

Commercial Arbitration Rules, before arbitrator Shawn Aiken (“Arbitrator Aiken”) for

months after GCSD filed its initial Arbitration Complaint on August 9, 2011. In fact,

SNW filed a seventy-seven (77) page Answer to GCSD’s Arbitration Complaint and

Notice of Intent to Assert Counterclaims on December 1, 2011. Counsel for SNW also

participated in at least seven preliminary hearing teleconferences with Arbitrator Aiken

and undersigned counsel through February 8, 2012. Indeed, SNW only ceased its

participation in the arbitration proceedings after Arbitrator Aiken had to order it to

produce the critical point of sale documents, which SNW has at all relevant times refused

to produce. See, e.g., Report of Preliminary Hearing and Scheduling Order No. 6,

attached hereto as Ex. 1. Immediately after the order from the Arbitrator to produce the

evidence, on February 9, 2012, the Tribe “took” GCSD’s intangible contract rights

through the purported right of eminent domain —six months after the arbitration

proceedings had begun. The “taking” was done pursuant to an unconstitutional

condemnation ordinance it adopted solely for use against GCSD.

In its Motion for Transfer, SNW misrepresents several aspects of the arbitration

proceedings that warrant correction. SNW claims that Arbitrator Aiken “refused to

acknowledge SNW’s sovereign immunity defenses.” Motion for Transfer at 2:26-18.

This is patently untrue. SNW filed a Motion to Dismiss GCSD’s Arbitration Complaint

(“Motion to Dismiss Arbitration”) on November 2, 2011, in which SNW moved for

dismissal exclusively based on its sovereign immunity-related assertions. GCSD

responded in opposition to SNW’s Motion to Dismiss Arbitration on November 18, 2011.


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After extensive briefing on the issue, Arbitrator Aiken denied SNW’s Motion to Dismiss

Arbitration. See Order dated November 21, 2011, attached hereto as Ex. 2. Thus, far

from “refus[ing] to acknowledge” SNW’s sovereign immunity defense, Arbitrator Aiken

fully considered the issue and only “after reviewing and considering the parties’

submissions . . . denie[d] the objection and confirm[ed] jurisdiction.” Id.

Similarly, SNW also asserts that Arbitrator Aiken “refused to acknowledge” the

Hualapai Nation’s (the “Tribe”) request for termination of the arbitration or right to fire

GCSD lawyers. Once again, this is demonstrably false. After receiving and considering

the Tribe’s demand to terminate the arbitration proceedings, Arbitrator Aiken issued not

one, but two related Orders. In his Order dated March 14, 2012, attached hereto as Ex. 3,

Arbitrator Aiken found that “[t]he Tribe lacks any authority, or permission from any

court, to dismiss [GCSD’s] law firm or certainly this arbitration.” Thus, after

consideration, Arbitrator Aiken denied the Tribe’s notice of dismissal. Id. In an

abundance of caution, in his Supplemental Order dated March 27, 2012 (“March 27th

Order”), attached hereto as Ex. 4, Arbitrator Aiken confirmed his denial of the notice of

dismissal but postponed the final hearing from April 2-13, 2012 until mid-July 2012; in

doing so, he stated that “[u]nless before the hearing date either SNW or the Tribe obtains

an order to the contrary from the Tribal Court or the U.S. District Court, the arbitration

will proceed to final hearing and thereafter final award.” March 27th Order at Ex. 4.

Neither the Tribe nor SNW filed a motion with this Court to halt the arbitration

proceedings. Instead, shortly after the March 27th Order, the Tribe filed a Motion to

Enlarge the Tribal Court’s Temporary Restraining Order to Enjoin Arbitration

Proceedings (“Motion to Enjoin Arbitration”) in Tribal Court on April 2, 2012, and a

Supplemental Motion to Enjoin Arbitration on June 28, 2012. After full briefing and oral

argument, the Tribal Court denied the Tribe’s Motion to Enjoin Arbitration and expressly

ordered that “SNW and GCSD may proceed with the Arbitration as agreed to in the


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[2003] Development and Management Agreement . . . ” (the “2003 Agreement”). Tribal

Court Order dated July 15, 2012, attached hereto as Ex. 5. The order was signed the day

before the AAA Arbitration commenced.

Given that no court ordered termination of the arbitration proceedings—and, to the

contrary, the Tribal Court expressly authorized the arbitration to proceed—Arbitrator

Aiken conducted the final hearing July 16-20, 2012. GCSD appeared and presented its

proof. SNW, despite full and proper notice, elected not to appear at the final hearing.

AAA Rule 29 (Arbitration in the Absence of a Party or Representative) provides:

Unless the law provides to the contrary, the arbitration may proceed in the absence of any party or representative who, after due notice, fails to be present or fails to obtain a postponement. An award shall not be made solely on the default of a party. The arbitrator shall require the party who is present to submit such evidence as the arbitrator may require for the making of an award.

Under the Revised Uniform Arbitration Act as adopted in Arizona, “[t]he arbitrator may

hear and decide the controversy on the evidence produced although a party who was duly

notified of the arbitration proceeding did not appear.” A.R.S. § 12-3015(C).

After hearing several days of testimony and carefully reviewing and weighing the

evidence, Arbitrator Aiken awarded GCSD a total sum of $28,572,810.25, which consists

of: (i) $24,975,469 for unpaid management and shuttle bus fees for SNW’s breaches of

contract through December 31, 2011; (ii) $100,000 for start and stop costs for SNW’s

breaches of contract through no later than December 31, 2011; (iii) $1,700,000 for

reimbursement for Y Travel employee housing, transportation, and bus advertising for

SNW’s breaches of contract through December 31, 2011; (iv) $800,000 to repair damage

to equipment and site installations for SNW’s breaches of contract through no later than

December 31, 2011; (v) $950,000 for reasonable attorney’s fees; and (vi) $47,341.25 for

costs of arbitration. Phrased differently, the arbitration hearing and award solely relate

to and arise from SNW’s breaches of contract that occurred between 2007 and 2011,


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i.e. before the illicit condemnation of GCSD’s intangible contract rights in the Grand

Canyon Skywalk (“Skywalk”). GCSD filed an Application for Confirmation of the

Arbitration Award (the “Application for Confirmation”) in the Arbitration Confirmation

Action. For the reasons explained herein, it should remain with Judge Frederick J.

Martone.

II. SNW’S MOTION TO TRANSFER SHOULD BE DENIED BECAUSE THE TWO ACTIONS NEITHER ARISE FROM SUBSTANTIALLY THE SAME TRANSACTIONS OR EVENTS NOR CALL FOR DETERMINATION OF THE SAME QUESTIONS OF LAW.

SNW incorrectly asserts that the Arbitration Confirmation Action arises “from

substantially the same transaction or event” as the two federal actions previously filed

with this Court (Motion for Transfer at 4:12-13); further, while conceding that “there is no

complete overlap,” SNW also wrongly contends that the Arbitration Confirmation Action

and the two previously filed federal actions call for determination of substantially the

same questions of law (id. at 5:17-18). As a preliminary matter, pursuant to Local Rule

42.1(a) (“L.R. 42.1”), only pending actions may be considered in assessing whether to

permit transfer. As this Court is aware, it dismissed the first federal action, No. 3:11-cv-

08048-DGC (“GCSD I”), in June 2011. See Dkt. Nos. 33 and 39. Thus, GCSD I is not

pending before this Court and all of SNW’s arguments relating to GCSD I or “Prior

Actions” (without distinguishing between them) are irrelevant here.1 See L.R. 42.1.

As this Court is also well aware, it has stayed GCSD II. See Dkt. No. 58.

Therefore, there is no pending action for the Arbitration Confirmation Action to be

transferred to. Assuming, without conceding, that a stayed action may qualify as a

pending action, the Arbitration Confirmation Action and GCSD II arise from completely

different transactions or events, and call for a determination of different questions of law. 1 Even if, in arguendo, this were not the case, SNW’s arguments related to GCSD I suffer the

same fatal defects as those discussed herein relative to GCSD II.


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Importantly, the Arbitration Confirmation Action arose out of SNW’s prior breaches of

the 2003 Agreement, and related questions of law, through no later than December 31,

2011—i.e. well before the Tribe’s illicit condemnation of GCSD’s intangible contract

rights in the Skywalk—and, in contrast, GCSD II arose out of the actual taking, including

related questions of law as to whether the Tribe has such authority and the validity of the

condemnation ordinance itself.2 The two matters have completely different factual and

legal issues.

Moreover, a federal court’s role in reviewing the arbitration award in the

Arbitration Confirmation Action is very narrow. In its Motion for Transfer, SNW

forecasts that it would seek to vacate the arbitration award (which it has since done) by

asserting “jurisdictional questions and contractual interpretation questions under the 2003

Agreement . . ., as well as defenses related exclusively to the Hualapai Tribe’s

condemnation of GCSD’s contractual interests in the 2003 Agreement.” Motion for

Transfer at 3:14-18. As explained in Section I, supra., the issues of jurisdiction and the

Tribe’s ability to halt the arbitration were already fully briefed, considered, and ruled

upon by Arbitrator Aiken. Federal law is well-settled that an arbitrator’s interpretation of

factual and legal questions relating to the parties’ contractual obligations is “entitled to

deferential review.”3 Northrop Corp. v. Triad Int’l Mktg., S.A., 811 F.2d 1265, 1269 (9th

Cir. 1987) (internal citations omitted). This is especially true where, as here, “the legal

issues were fully briefed and argued to the arbitrator[].” Id. To “now subject these

decisions to de novo review would destroy the finality for which the parties contracted

2 Of course, this Court has not heard any evidence as to the merits of GCSD’s claims in GCSD II.

Rather, it has stayed the action and ordered GCSD to exhaust its claims in Tribal Court. See Dkt. No. 58.

3 Indeed, it is axiomatic that an arbitrator’s interpretation of the law is “not subject, in the federal courts, to judicial review for error in interpretation.” Northrop Corp., 811 F.2d at 1269 (internal citation and quotations omitted).


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and render the exhaustive arbitration process merely a prelude to the judicial litigation[,]”

which the parties contracted to avoid. Id. It should be obvious to this Court that the

Defendants are engaged in nothing more than an overt effort to delay the enforcement of

the award. This Court should prevent the continued gamesmanship of SNW and its

lawyers.

Rather, pursuant to 9 U.S.C. § 10, the court may only vacate an arbitration award

under four circumstances; the lone such circumstance alleged by SNW is: “where the

arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final,

and definite award upon the subject matter submitted was not made.” 9 U.S.C. § 10(4).

Thus, the limited question for the court to answer in the Arbitration Confirmation Action,

before confirming the arbitration award, is: Did Arbitrator Aiken exceed his powers, or so

imperfectly execute them, such that the court may vacate the mutual, final, and definite

arbitration award finding that SNW repeatedly and profoundly breached its obligations to

GCSD under the 2003 Agreement between 2007 and 2011? While the answer to this

question is NO4, it is a discrete issue and legal question that SNW does not—and

cannot—allege arose in GCSD II. The matters before the court in GCSD II had absolutely

nothing to do with this issue.

Pangerl v. Ehrlich, Nos. CV06-1464 PHXMHM, CV 06-1465 HXFJM, 2007 WL

686703, at * 1-4 (D. Ariz. March 2, 2007) is instructive here. In that case, the court

denied plaintiff’s motion to transfer, finding there was an “insufficient basis” to support a

transfer pursuant to L.R. 42.1. Id. at *4. In reaching this conclusion, the court found that

where actions, such as the Two Actions at issue here, are “factually distinguishable”

because the conduct at issue took place several months apart, such acts “are clearly

4 That SNW chose to cease its participation six months into the arbitration proceedings, and after

continuing to receive all necessary and due notice, does not change this result. See AAA R-29 and A.R.S. § 12-3015(C).


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distinct and do not arise out of substantially the same transaction or event.” Id. at *2.

Similarly, where, as here, the claims in two actions “are based upon different events and

circumstances” they do not call for the determination of substantially the same questions

of law. Id. at *3. The Arbiter determined the past breach of contract damages owed by

SNW; this action sought to prevent the irreparable injury to GCSD caused by

unconstitutionally taking using eminent domain.

In sum, SNW does not allege, nor can it, that there is any similarity—let alone

substantial similarity—between the issues raised in GCSD II and those permitted in the

Arbitration Confirmation Action pursuant to 9 U.S.C. § 10. Further, in light of the well-

established limitations upon the court in actions to confirm arbitration awards, the Two

Actions do not call for determination of substantially the same questions of law.

Accordingly, this Court should deny SNW’s Motion to Transfer.

III. SNW’S MOTION TO TRANSFER SHOULD BE DENIED BECAUSE THE TWO ACTIONS DO NOT INVOLVE SUBSTANTIALLY THE SAME PARTIES OR PROPERTY.

While GCSD and SNW are parties in the Two Actions, GCSD II has twelve more

named defendants than the Arbitration Confirmation Action. By any measure, an action

that contains two parties and another action that contains fourteen parties cannot be said to

involve substantially the same parties. See, e.g., Pangerl, 2007 WL 686703, at *3

(finding that two actions do not involve “substantially the same parties” when there is

only a partial overlap in the parties named).

Further, the Two Actions do not involve substantially the same property. The

property at issue during the arbitration proceedings was primarily monies owed to GCSD

by SNW due to its repeated past breaches of the 2003 Agreement. The property at issue


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in GCSD II is primarily GCSD’s intangible contract rights to manage the Skywalk from

and since the taking. Thus, this factor also does not support SNW’s request for transfer.5

IV. SNW’S MOTION TO TRANSFER SHOULD BE DENIED BECAUSE SNW HAS FAILED TO SHOW THAT TRANSFER WOULD PROMOTE JUDICIAL ECONOMY.

SNW claims that its Motion for Transfer “is PRIMARILY based upon judicial

economy in avoiding substantial duplication of labor by this Court and the parties in light

of the common factual and legal background of the Arbitration [Confirmation] Action and

[GSCD II].” Motion for Transfer at 2:11-13 (emphasis added). As demonstrated above,

however, the Two Actions: do not arise from substantially the same transaction or event;

do not call for determination of substantially the same questions of law; do not involve

substantially the same parties or property; and, do not involve the same patent, trademark,

or copyright. Thus, SNW has failed to support their sole basis for claiming that it would

be judicially economical to transfer the Arbitration Confirmation Action to this Court.

Accordingly, given the very narrow issues permitted to be considered by the court in the

Arbitration Confirmation Action, as described supra., keeping the Two Actions before

their respective assigned Judges would not entail substantial duplication of labor.

V. CONCLUSION

Based on the foregoing, GCSD respectfully requests that this Court DENY SNW’s

Motion for Transfer.

//

//

//

// 5 If and to the extent the Two Actions involve any intellectual property, they fall under the same

category divisions as the other property at issue. Moreover, SNW does not allege that the Two Actions involve the same patent, trademark, or copyright, which is the test under L.R. 42.1. Thus, this is another factor that does not support SNW’s Motion for Transfer.


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RESPECTFULLY SUBMITTED this 4th day of October, 2012.

GREENBERG TRAURIG, LLP By: /s/ Pamela M. Overton

Pamela M. Overton 2375 East Camelback Road, Suite 700 Phoenix, AZ 85016

GREENBERG TRAURIG, LLP

Mark Tratos 3773 Howard Hughes Parkway, Suite 400N Las Vegas, NV 89169

GREENBERG TRAURIG, LLP

Troy A. Eid Robert S. Thompson IV 1200 17th Street, Suite 2400 Denver, CO 80202 Attorneys for Plaintiff

.


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CERTIFICATE OF SERVICE

I hereby certify that on October 4, 2012, I sent the foregoing application for

confirmation of arbitration award to be personally served on the following:

Glen Hallman Paul K. Charlton Jeffrey D. Gross Christopher W. Thompson GALLAGHER & KENNEDY, P.A. 2575 E. Camelback Road Phoenix, Arizona 85016-9225

/s/ Tammy Mowen Employee of Greenberg Traurig, LLP


LV 419864629v1

INDEX TO EXHIBITS

RESPONSE IN OPPOSITION TO MOTION FOR JUDICIAL TRANSFER

PURSUANT TO LOCAL RULE 42.1 Exhibit 1 Arbitrator Shawn K. Aiken’s Report of Preliminary Hearing and Scheduling

Order No. 6 dated February 7, 2012 Exhibit 2 Arbitrator Shawn K. Aiken’s Order Re Respondent’s Motion to Dismiss GCSD’s

Arbitration Complaint dated November 21, 2011 Exhibit 3 Arbitrator Shawn K. Aiken’s Order Re: Respondent’s (and Hualapai Nation’s)

Notice of Voluntary Dismissal With Prejudice dated March 14, 2012 Exhibit 4 Arbitrator Shawn K. Aiken’s Supplemental Order: Order by U.S. District Court

Judge Campbell (March 19, 2012) Re Trial Court Exhaustion:: Re-Setting of Final Hearing to July 2012 dated March 27, 2012

Exhibit 5 Honorable Lawrence King, Judge, Hualapai Indian Tribe Minute Entry and Order

dated July 15, 2012

Case 3:12-cv-08030-DGC Document 64-1 Filed 10/04/12 Page 1 of 23

EXHIBIT 1

EXHIBIT 1


AMERICAN ARBITRATION ASSOCIATION

Commercial Panel

No. 76 517 Y 00191 11 SlM

In the Matter of the Arbitration of

Grand Canyon Skywalk Development, LLC

and

'Sa' Nyu Wa, Inc.

REPORT OF PRELIMINARY HEARINGAND SCHEDULING ORDER (No.6)

Shawn Aiken conducted Preliminary Hearing No. 6 VIa telephone on

Wednesday, February 1, 2012, beginning at 11:00 a.m. MST. Attorneys Mark Tratos

Donald Prunty, and Pamela Overton appeared for Claimant Grand Canyon

Skywalk Development, LLC. Attorney Glen Hallman appeared for Respondent 'Sa'

Nyu Wa, Inc. Our case manager, Ms. Lynn Cortinas, started the call.

1. Report on Status of Document Production. Counsel discussed

production of records by each side and responses to subpoenas from third parties.

The parties agreed to submit their separate statements of positions on the current

discovery disputes, including the scope of the subpoena to Wells Fargo and the point

of sale documentation, no later than February 8, 2012. We will discuss those

papers on our next telephone call at 11:00 a.m. (ArizonaJMST) on February 9,

2012. The decision will follow on or very shortly after February 13, 2012. In the

meantime, Mr. Hallman reported, the Tribe will make all good faith efforts to

produce certain point of sale documentation by February 10, 2012. Near the end of

the call, the parties agreed that each side would produce point of sale information

related to ticket sales. The only question appeared to be whether those records

would reflect monthly or yearly data. Counsel agreed that daily records were not

needed for production but available only for review, if needed.

S:\AAA-SKA\Current\29914001 Grand Canyon v. 'Sa' Nyu Wa\Pleadings\PrelimHrgReport6 120207.doc


2. Status of Deposition Scheduling. The parties have not discussed or

confirmed the schedule for expert or lay depositions. As Mr. Hallman pointed out,

the expert witnesses must review the reports and other data related to ticket sales.

Counsel will discuss, agree upon, and submit their joint prehearing schedule,

including proposed dates for depositions. The four-hour presumptive limit will apply

to non-parties and the seven-hour presumptive limit to parties and principals of

parties.

3. Agreed Upon Modification To Subpoenas. Mr. Prunty and Mr.

Hallman agreed that the parties will produce responsive documents related to the

skywalk operations. Mr. Prunty will draft and Mr. Hallman will review the

proposed language modifying the subpoenas, which they will submit to the

arbitrator no later than Wednesday, February 8, 2012.

4. Payment to Accountant. The parties continue to dispute the

payment to the accountant (Ms. Jan Allen). Mr. Hallman reports that his client

made the payment ordered by the Tribunal, but she did not provide the required

information, Mr. Hallman explained. The parties will submit their positions on this

dispute for hearing on February 9th and resolution by the Tribunal thereafter.

5. Preliminary Hearing No.7. Our case manager will arrange for and

confirm our next telephonic preliminary hearing on February 9, 2012 at 11:00

a.m. (ArizonalMST). During that hearing" the arbitrator will confirm the pre-

hearing schedule (if not agreed upon) and resolve any outstanding discovery

disputes.

Dated: February 7, 2012Phoenix, Arizona

/ s / Shawn K. AikenShawn K. Aiken, Arbitrator

S:\AAA,SKA\Current\29914001 Grand Canyon v, 'Sa' Nyu Wa\Pleadings\PrelimHrgReport6120207,doc


EXHIBIT 2

EXHIBIT 2



Commercial PanelNo. 76 517 Y 0019111 SlM



and

'Sa' Nyu Wa, Inc.

ORDER RE RESPONDENT'S MOTION TO DISMISSGCSD'S ARBITRATION COMPLAINT

On November 4, 2011, respondent Sa Nyu Wa, Inc., a Haulapai Indian

Tribally chartered corporation, formally objected to the tribunal's jurisdiction (based

on the Hualapai Nation's claim of and refusal to waive sovereign immunity). On

November 18, 2011, claimant responded. After reviewing and considering the

parties' submissions, the tribunal denies the objection and confirms jurisdiction.

Respondent 'Sa' Nyu Wa, Inc. (SNW) contends that the tribunal must dismiss

claimant Grand Canyon Skywalk Development, LLC's (GCSD) demand for

arbitration on grounds of sovereign immunity. SNW argues that GCSD must first

comply with Section 15.4 of the 2003 Development and Management Agreement,

which, SNW urges, requires first an order from an Arizona federal court compelling

SNW to arbitrate. And, SNW argues, the Hualapai Tribal Court's August 2d order

to this same effect precludes GCSD from re-litigating the issue here.

GCSD points out in response that an agreement to arbitrate constitutes the

required waiver of sovereign immunity. Second, the Court of the Hualapai Nation

determined that it lacked subject matter jurisdiction. Following motion practice, the

Tribal Court found that it was "deprived of jurisdiction." Order (8.2.11), at 2. Thus,


GCSD argues, its judgment was void and, in any event, not on the merits.

The controlling 2003 Development and Management Agreement provides in

section 15.4 in part as follows:

15.4 Arbitration, Governing Law, Jurisdiction

(a) Mandatory Arbitration. Any controversy, claim or disputearising out of or related to this Agreement shall be resolvedthrough binding arbitration . .. Either party may request andthus initiate arbitration of the dispute by written notice("Arbitration Notice") to the other party .... The arbitrationshall be conducted in accordance with the CommercialArbitration Rules of the American Arbitration Association thenin effect, as limited by Section 15.4(d). Judgment upon theaward (as limited by Section 15.4(d» rendered by the arbitratormay be enforced through appropriate judicial proceedings in anyfederal court having jurisdictionLl

Agreement, at 42-43. Section 15.4(d) of the Agreement provides for SNW's waiver of

sovereign immunity from suit but limited to three actions or remedies, including

"[a]n action in a federal court of competent jurisdiction in Arizona to either (i)

compel arbitration or (ii) enforce a determination by an arbitrator requiring SNW to

specifically perform any obligation" under the Agreement.

Federal and state courts, including the U.S. Supreme Court, read nearly

identical arbitration provisions as a waiver of sovereign immunity. See Response, at

6-9 (citing and discussing authorities, including C & L Enterprises, Inc. v. Citizen

Band of Potawatomi Indian Tribe of Oklahoma, 532 U.S. 411 (2001». After all, the

agreement to arbitrate would otherwise make little sense.

Second, Section 15.4(d) does not require an order from the federal court to

arbitrate. Instead, the parties agreed that one or the other party may first file an

action in federal court and seek an order compelling arbitration, but, under section

15.4(a), either party may likewise first request arbitration by filing a demand with

the American Arbitration Association. Here, claimant chose the latter course. In

some circumstances, parties may wish to first file in federal court because certain


tactical advantages follow, but neither the Agreement nor the law requires that

course.

Finally, on August 2d, the Court of the Hualapai Nation granted SNW's

motion to dismiss and found that the Court lacked jurisdiction. In these

circumstances, long-settled preclusion law requires a final judgment from a court

with subject matter jurisdiction. The tribal court lacked jurisdiction. Thus, its order

carries no preclusive effect.

The tribunal denies SNW's Motion to Dismiss GCSD's Arbitration

Complaint.

Dated: November 21,2011Phoenix, Arizona

/s/ Shawn K. AikenShawn K. Aiken, Arbitrator

S:\AAA-SKA\Current\29914001 Grand Canyon v. 'Sa' Nyu Wa\Pleadings\OrderReJurisdiction_doc


EXHIBIT 3

EXHIBIT 3



Commercial PanelNo. 76 517 Y 00191 11 SIM



and

'Sa' Nyu Wa, Inc.

Order Re: Respondent's (and Hualapai Nation's) Notice of Voluntary

Dismissal With Prejudice

The Haulapai Nation claims to own the interests at issue through

recent condemnation and, therefore, stepped into the shoes of Mr. Jin and his

counsel, dismissed counsel for claimant, and filed its notice of voluntary

dismissal. In February 2012, counsel for respondent, Mr. Glen Hallman,

wrote to the American Arbitration Association, on behalf of the Hualapai

Nation, confirming dismissal of this arbitration (because, he contended,

attorneys Tratos and Prunty were no longer authorized to represent claimant

Grand Canyon Skywalk Development, LLC) after the Tribe had condemned

the claim at issue. Mssrs. Tratos and Prunty, who confirm that they

nevertheless represent GCSD, oppose the notice of dismissal.

First, may the tribunal decide the question. Second, may the Tribe - a

non-party - dismiss counsel for claimant in the absence of an attorney-client

relationship and in the teeth of claimant's confirmation that the Greenberg

firm still acts as its lawyers. I take up each issue in turn.


First, who should decide the merits issue -- the arbitrator or a court?

There appear to be no cases directly on point. In Northwestern Nat. Ins. Co. v.

Insco, Ltd., 2011 WL 4552997 (S.D.N.Y. 2011), the court held that under New

York law the disqualification of a law firm from representing a party in a

pending arbitration is an issue for the court and not for the arbitrators. See

also Employers Ins. Co. of Wausau v. Munich Reinsurance America, Inc., 2011

WL 1873123 (S.D.N.Y. 2011)(holding that there was scant authority on the

issue of whether the disqualification of an attorney from arbitration is a

matter left to the arbitrators or the court; the issue is for judicial

determination); cf. SOC-SMG, Inc. v. Day & Zimmerman, Inc., 2010 WL

3634204 (Del. Ch. 2010) (in a petition to disqualify counsel and dismiss all

claims and defenses in arbitration for alleged misuse of confidential

information, the court held that these issues were to be determined by the

arbitrators, reasoning that the arbitrators handling the arbitration were well

positioned to consider any contractual or ethical breach that allegedly

deprived the party of its legitimate confidentiality interests and to shape

consequences for any breach by opposing counsel of its ethical duties and to

have the court inject itself into the situation would show disrespect toward

the arbitration panel, which has the broad authority to address these issues

in the first instance). Despite the dearth of authority, and by analogy to at

least one well-reasoned disqualification case, the tribunal turns to the merits.

May the Hualapai Tribe - a non-party to this arbitration - dismiss

counsel for claimant, and then dismiss the arbitration, with prejudice, in the

absence of an attorney-client relationship, and in the teeth of claimant's

confirmation that the Greenberg firm still acts as its lawyers, following a

notice of condemnation under the Tribal ordinance? Before turning to that

question, some brief background is in order.


Mr. David Jin agreed to finance, develop, and operate the Grand

Canyon Skywalk project. The parties would, they agreed, share revenue from

the project. The Nation formed the 'Sa' Nyu Wa entity (SNW), a tribally-

chartered company, to enter into this revenue-sharing and development

agreement with Mr. Jin. The Nation is the sole shareholder of SNW. With

these purposes in mind, in late 2003, the parties entered into their

Development and Management Agreement. Mr. Jin also formed a company to

manage the Skywalk.

The early phases of the project were completed and, in March 2007, the

Skywalk opened to the public. Soon, disputes developed over the

management of the project, including the division of revenues. In March

2010, the parties entered into a trust agreement that, among other things,

provided for the deposit of so-called "new" Skywalk ticket revenue into a trust

account at U.S. Bank. Today, that trust account holds over $10 million, which

apparently represents ticket revenues for 2010 and 201l.

The Agreement provided that disputes between the parties would be

decided under the rules of the American Arbitration Association. In late

2011, after having emerged from Hualapai Tribal Court, claimant Grand

Canyon demanded arbitration. Here, in arbitration, the parties dispute the

distribution of and rights to, among other things, the trust account revenue

(and many other issues) arising from the operation of the Skywalk since

2007.

With that background in mind, Grand Canyon argues that the Tribe

lacks power to condemn any property or right because the Nation may not

assert eminent domain over a non-Indian or its property (see Response, at 15-

18) and the governing tribal ordinance is unconstitutional (see Response, at

18-25). But, I need not (and cannot) reach these issues. Rather, those issues


must be resolved by the court or courts with jurisdiction over the subject

matter and the parties - Grand Canyon and the Tribe - including the federal

district court or perhaps even the tribal court.

In any event, the rules of the Large, Complex Case Panel of the

American Arbitration Association control here. See Report of Preliminary

Hearing No.1, at ~1 (10.31.11). The parties before this tribunal remain the

claimant and the respondent. No court has ordered otherwise. The Tribe, a

non-party to the arbitration, has made no request to intervene and in fact

refused to waive sovereign immunity in related proceedings. The Tribe lacks

any authority, or permission from any court, to dismiss Grand Canyon's law

firm or certainly this arbitration. In other words, the Tribe has no authority

to "dismiss" the arbitration without the consent of the claimant and its

counsel of record, Mr. Tratos, Mr. Prunty, and Ms. Overton at the Greenberg

Traurig firm. They do not consent.

The tribunal DENIES the notice of dismissal. The matter shall proceed.

The final hearing remains scheduled for April 2012 unless otherwise ordered

or agreed. Counsel and the arbitrator will convene for our status call on

Thursday, April 15, 2012, at 2:00 p.m. (MST)(888.537.7715 and passcode:

25249171#).

Dated: March 14, 2012Phoenix, Arizona

/ s/ Shawn K. AikenShawn K. Aiken, Arbitrator

S:'\AAA-SKA\Current\29914001Grand Canyonv. 'Sa' NyuWa\Pleadings\OMTDismiss1203t;©ftally signed by Shawn

Shawn AikenON: cn=Shawn Aiken,o=Aiken Schenk et aI., au,[email protected],c=USDate: 2012,03.1416:07:57-07'00'

Aiken


EXHIBIT 4

EXHIBIT 4



Commercial PanelNo. 76 517 Y 00191 11 SIM



and

'Sa' Nyu Wa, Inc.

SUPPLEMENTAL ORDER :: ORDER BY U.S. DISTRICT COURT JUDGECAMPBELL (MARCH 19.2012) RE TRIBAL COURT EXHAUSTION :: RE-

SETTING OF FINAL HEARING TO JULY 2012

In their 2003 Skywalk Agreement, the parties chose this forum. More

recently, under the Agreement and the controlling rules, the tribunal confirmed its

own jurisdiction. The question now, though, is whether the Hualapai Tribe's

condemnation ordinance altered the parties' choice of forum. SNW argues that the

tribal ordinance permitted and the declaration of taking confirmed the taking of the

claims at issue here. In his March 22, 2012 letter to Ms. Sandra Marshall, Mr.

Hallman, counsel for SNW and the Hualapai Tribe, contends that "[t]he Tribe is

now the owner of GCSD's contract rights [at issue here] pursuant to the declaration

of taking and Section 2.16 of the Hualapai Law and Order Code." Letter, at 3. GCSD

contends that the taking was invalid in the first instance because the ordinance

itself was unconstitutional and, even if valid in all other respects, cannot reach the

claims at issue here.

The parties in recent weeks began litigation on this and related questions in

U.S. District Court (CV 12-08030-PCT-DGC). The federal court denied GCSD's

application for temporary restraining order because GCSD must first exhaust its

remedies in Tribal Court. See Order (Doc. 54), at 14 ("comity compels the Court to

require that Plaintiff exhaust its remedies in Tribal Court."). The Tribal Court, not


the federal court, must first consider the lawfulness of the Tribe's condemnation

action, Judge Campbell confirmed, so the parties now move to Tribal Court where

the parties presumably would litigate and receive resolution of at least the following

questions: (1) whether sections 2.16(B), subparts (1) through (14), of the Hualapai

Law and Order Code and Tribal Council Resolution No. 15-2012 pass constitutional

muster; if so, (2) whether the claims at issue here fall within the scope of the

Declaration of Taking (Case no. 2012-CV-017); and, if so, (3) whether for any other

reason this arbitration should not proceed to final award. In the meantime, the

condemnation ordinance, which provided that "the Tribe shall be the party [to an

intangible contract] in the full place and stead of the defendant[,]" remains in effect.

See Hualapai Law and Order Code, Sec. 2.16(4)(a).

Judge Campbell's order did not enjoin this arbitration. Mr. Hallman

nevertheless pointedly observes that the Association and the arbitrator may suffer

"liability" if the arbitration proceeds. In his March 22d letter to Ms. Marshall, for

example, Mr. Hallman wrote in part that "the AAA and the Arbitrator potentially

subject themselves to liability by moving forward with an arbitration that is not

authorized under the 2003 Agreement." Letter, at 6 (citing no authority). To the

contrary, the tribunal has confirmed its own jurisdiction under the Skywalk

Agreement (§15.4) and the governing rules of the American Arbitration Association.

Since that order, the only other development - the condemnation proceedings in

Tribal Court - would appear not to have affected the cause of action brought here

for resolution.

In fact, during argument on February 24th, Judge Campbell expressed the

same reservations about the position taken by SNW and the Tribe that this tribunal

has expressed. See Reporter's Transcript of Proceedings - Temporary Restraining

Order Hearing (2.24.12), at 73-75 ("I'm having great difficulty with the idea that

this cause of action is not a separate asset owned by the corporation, that it is really

just part and parcel of their rights under the contract that can be seized by the

tribe."). Counsel for SNW may confuse contracts (and the rights under those

contracts) with choses in action, but that issue appears not to have been briefed for


Judge Campbell (not to mention the subsidiary issues, including whether exercise

over a chose in action - as opposed to an interest in an agreement - mayor could

constitute a public use). In any event, despite those misgivings, and even though his

order did not enjoin this arbitration, the effect of the March 19th order from Judge

Campbell should be to postpone the final hearing. The parties would otherwise

undertake the (lengthy) final arbitration hearing without having the opportunity to

test in some forum the effect of the condemnation ordinance and declaration of

taking on the ownership of the claims at issue.

For that reason, the final hearing is hereby postponed. The tribunal vacates

the current hearing (set for April 2-13, 2012) and re-sets the final hearing to July

16-20 and July 23-27, 2012, unless otherwise ordered by this tribunal, agreed by

the parties, or ordered by the Hualapai Tribal Court or U.S. District Court. The

parties should appear and present their proofs. Unless before the hearing date

either SNW or the Tribe obtains an order to the contrary from the Tribal Court or

the U.S. District Court, the arbitration will proceed to final hearing and thereafter

to final award.

Our case manager should arrange for our next preliminary hearing (via

telephone) on May 14, 2012 at 11:00 a.m. (ArizonaIMST). During that hearing,

counsel should report on the status of the cases in the Hualapai Tribal Court and

U.S. District Court. In the meantime, in the absence of an order to the contrary

from either Judge Campbell or the Tribal Court, the parties shall proceed with

preparations for the final hearing, including the production of documents and

testimony from third parties.

Dated: March 27, 2012Phoenix, Arizona

/ s/ Shawn K. AikenShawn K. Aiken, Arbitrator

S:\AAA-SKA\Current\29914001 Grand Canyon v. 'Sa' Nyu Wa\Pleadings\SuppOrdReFedCtOr~fg~f)Hfgned by Shawn

Shawn AikenDN: cn=Shawn Aiken,o=Aiken Schenk et aI., OU,[email protected]=USDate: 2012.03.2714:52:33-OTOO'

Aiken


EXHIBIT 5

EXHIBIT 5


4

ORD·.R - :

Case 3:12-cv-08030-DGC Document 61-1 Filed 09/10/12 ~~;:~'-j-~~~~==:;~::~:D=D~IN THE HUALAPAI TRIBAL COUR

HUALAPAI RESERVATION, ARIZO.~A:.:!.-~~~1--~

7

THE HUALAPAI INDIAN TRIBE OF THE )HUALAPAI INDIAN RESERVATION, )Arizona, )

)))))))))))

11----------------------------)

MINUTE ENTRY AND ORDER

Case No.: 2012-CV-017

6Plaintiff,

vs.8

GRAND CANYON SKYWALKDEVELOPMENT, LLC, a Nevada limitedliability company,

9

10Defendant.

11

12

13This matter is before the Court on Plaintiff's Motions for to Enlarge the Court's

Temporary Restraining Order to Enjoin Arbitration Proceedings. Defendant filed an

Opposition, to which Plaintiff replied. The Court heard oral argument from the parties.

Defendant is represented by counsel for the limited purpose of arguing jurisdiction.15

16I. BACKGROUND

18A Development and Management Agreement was entered into in December

2003 between 'SA' NYU WA, a Hualapai Indian Tribe chartered corporation, and:.9

20GRAND CANYON SKYWALK DEVELOPMENT, LLC, a Nevada limited liability

21company. This agreement was for the development and operation of the skywalk.

Grand Canyon Skywalk Development, LLC filed a complaint in this Court arguing

breach of contract and seeking an order to compel arbitration pursuant to the

agreement. Grand Canyon Skywalk Development commenced the arbitration process in

that matter.

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The Hualapai Indian Tribe issued a declaration of takings concerning the

Skywalk in February 2012. They also sought a temporary restraining order to prevent

GCSD, its officers, agents, employees from destroying of damaging any property

located at the Grand Canyon Skywalk and which is the subject of GCSD's contractual

interest in that certain Development and Management Agreement, dated as of

December 31.2003, as amended. and from taking, removing. or absconding with such

property from the Hualapai Reservation. The Court granted the TRO.

18 STANDARD FOR PRELIMINARY INJUNCTION AND A TEMPORARY RESTRAINING

19 ORDER

20 In the federal courts, temporary restraining orders are governed by Rule 65(b) of

21 the Federal Rules of Civil Procedure. Rule 65 of the Federal Rules of Civil Procedure

22 explains what injunctions are and the rules regarding them. Basically, there are two

23 types of injunctions: a preliminary injunction and a temporary restraining order (TRO).

24 The purpose of both is to maintain the status quo - to insure a plaintiff that the

25 defendant will not either make him or herself judgment-proof, or insolvent in some way.

II. DISCUSSION

TRIBAL RULES OF CIVIL PROCEDURE

The Court finds that jurisdiction is proper in this matter.

Section 3.1 (D) of the Hualapai Law and Order Code provides that "[a]s to any

matters that are not covered by the Tribal Constitution, codes, ordinances or resolutions

of the Tribe or by Tribal Common Law or by applicable federal law or regulation, the

Tribal Court may be guided by common law as developed by other Tribal, federal or

state courts."

ORDER - 2


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ORDER - 3


or to stop him or her from acting in the harmful, complained-of way until further judicial

proceedings are available.

4 CONTRACT ISSUES

Sovereign Immunity

"Indian tribes are unique aggregations possessing attributes of sovereignty over

both their members and their territory ... ; they are 'a separate people' possessing 'the

power of regulating their internal and social relations ....'" United States v. Mazurie, 419

U.S. 544, 557, 95 S.Ct. 710, 717,42 L.Ed.2d 706,716-17 (1975) (citations omitted).

SUb-delegation of administrative authority to a sovereign entity is not per se improper.

Id.; see United States v. Matherson, 367 F.Supp. 779, 781-83 (E.D.N.Y.1973)

(upholding regulation issued by Superintendent of Fire Island National Seashore

requiring persons seeking to operate motor vehicles on certain national seashore lands

to secure first a permit from the local municipality), affd mem., 493 F.2d 1399 (2d

Cir.1974). Nor must such a sub-delegation rest on express statutory authority. See

Fleming v. Mohawk Wrecking & Lumber Co., 331 U.S. 111,120-22,67 S.Ct. 1129,

1134,91 L.Ed. 1375 (1947); Tabor v. Joint Bd. for Enrollment of Actuaries, 566 F.2d

705,708 n. 5 (O.C.Cir.1977).

Suits against Indian Tribes are barred by Tribal sovereign immunity unless

sovereignty is waived by Congress or the Tribe. Kiowa Tribe v Manufacturing

Technologies, Inc., 523 U.S. 751, 754 (1998); Oklahoma Tax Comm'n v. Citizen Band

of Potawatomi Indian Tribe, 498 U.S. 505, 509 (1991). Immunity from suit extends to

tribal contracts involving commercial or governmental activities and for contracts made

both on and off a reservation. Kiowa Tribe, 523 U.S. at 760.

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ORDEH - 4


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The United States Supreme Court has repeatedly stated that any waiver of a

tribe's immunity must be unequivocally expressed and cannot be implied. "It is settled

that a waiver of sovereign immunity 'cannot be implied but must be unequivocally

expressed ....Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58-59 (1978) (citing United

States v. Testan, 424 U.S. 392, 399 (1976) which quotes United States v. King, 395

U.S. 1,4 (1969).

In the instant matter, the 2003 Agreement in Article 15, Section 15.4 (d) Limited

Waiver of Sovereign Immunity, provides that SNW, a Hualapai Indian Tribe corporation,

expressly waives its sovereign immunity with respect to all disputes arising out of the

Agreement to the extent permitted un the Constitution of the Nation.

The Tribal Constitution provides that the Tribal Council may expressly waive the

Tribe's sovereign immunity. The Constitution also requires that express waivers of

sovereign immunity require the approval of at least thirty (30) percent of the total

number of eligible voters of the Tribe voting in a special election if the waiver may

expose the Tribe to liability in excess of $250,000 dollars, or its equivalent.

Given that the Tribal Council authorized 'SA' NYU WA to enter into the

agreement with GCSD with the provisions concerning sovereign immunity, the Court

finds that the Council expressly waived sovereign immunity for the sole purpose of the

2003 agreement.

Breach of Contract

The 2003 Agreement also provided in Article 15, Section 15.4 (a) that "any

controversy, claim or dispute arising out of or related to the 2003 Agreement shall be

resolved through binding arbitration. The governing law for disputes was agreed to be

the State of Arizona laws and the Hualapai Indian Tribal Law. Also, any laws of the

State of Arizona that may be interpreted to (1) waive SNW's or the Nation's sovereign


1 immunity; (2) require arbitration other than as agreed in Section 15.4(a); or (3) require

SNW or the Nation to appear in any court or other proceeding in the State of Arizona,

except federal courts are exclude. The venue and jurisdiction for any litigation under the

Agreement was agreed to be the federal courts sitting in the State of Arizona and

located in or around Peach Springs, Arizona.

Isl Lawrence C. Kin


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7 III. ORDERS

8 IT IS ORDERED that the TRO remain as it relates to the to prevent GCSD, its

9 officers, agents, employees from destroying of damaging any property located at the

10 Grand Canyon Skywalk and which is the subject of GCSD's contractual interest in that

11 certain Development and Management Agreement, dated as of December 31, 2003, as

12 amended, and from taking, removing, or absconding with such property from the

13 Hualapai Reservation.

14 IT IS ORDERED that SNW and GCSD may proceed with the Arbitration as

15 agreed to in the Development and Management Agreement, dated as of December 31,

16 2003, as amended.

17 SO ORDERED this 15th day of July 2012.

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20Honorable Lawrence KingJudge, Hualapai Indian Tribe

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ORDER - :;


pamela m. overton (az bar no. 009062) greenberg … · for the reasons explained herein, it should...

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