The Arizona-based Yavapai-Apache Nation has won a .9 million judgment against California’s La Posta Band of Diegueño Mission Indians; money that the Apache loaned to the La Posta band to build what became a failing casino 56 miles from San Diego. But there may be no way to force the tribe to pay the judgment.
The ruling came in the California Court of Appeals for the 4th District.
The Nation, which has about 2,400 members, and is based north of Phoenix, helped finance the 20,000 square foot La Posta Casino, which opened in 2007, but closed in 2012. The La Posta Band, which has 15 adult members, was unable to make payments on the $23 million loan and the Nation took it to court. A jury ruled in 2014 that the tribe had to pay the loan back, which at that point was calculated to be $44,470,704 and has continued to grow in the interim.
Last week the appeals court upheld that ruling. Writing for the majority, Judge Judith L. Haller wrote “Although La Posta made efforts to reduce costs and obtain more customers, the casino was ultimately unsuccessful and La Posta never made any payments under the loan agreement.” It added, “On our independent review, we determine the trial court’s conclusion was legally correct.”
Currently the tribe’s only source of revenue is the Indian Gaming Revenue Sharing Trust Fund, from which it was paid $225,891.27 for the first quarter, according to the California Gambling Control Commission. The appeals court ruled that the tribe couldn’t be forced to pay the judgment from that source.
The lawsuit is attempting to attach that funding to start paying back the loan. The fund was created to benefit tribes unable to engage in gaming by giving them some gaming profits. According to the agreement between the two tribes, the Yavapai-Apache could only take the money if it could be shown that the La Posta Band committed fraud—which the jury did not find.
The appeals court left open the door of pursuing fraud in Arizona’s tribal courts. In its opinion, the court held: “we do not intend to suggest that the tribal court would be an appropriate or the most appropriate jurisdiction to decide the scope of the Yavapai-Apache Nation’s enforcement rights.” It added, “If the tribal court reaches a factual conclusion regarding fraud that is inconsistent with the final judgment in this case, the question regarding the impact of such a determination in a California enforcement proceeding would seem to be one in which a California court may have a substantial interest and the jurisdiction to decide independently. To the extent the La Posta is requesting this court to address whether the final judgment before us should serve as collateral ‘estoppels’ or ‘res judicata’ in any current tribal court proceedings, we decline to do so.”
Meanwhile the nation is suing the band in its own tribal court to keep the issue of fraud active. The nation has also successfully sued another California tribe that borrowed money and defaulted: the Ipay Nation of Santa Ysabel, in San Diego County. It obtained a judgment and the California Gambling Control Commission staff has recommended that its distribution be given to the nation.
