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A federal judge has tossed out a Ute Indian Tribe lawsuit that claimed a state court judge was illegally presiding over a contract dispute in which an independent contractor says he is owed millions of dollars from tribal oil and gas revenues.
U.S. District Judge Robert Shelby ruled that the tribe had waived sovereign immunity in a contract it entered with Lynn Becker and that Becker's lawsuit over the tribe's alleged failure to adequately pay him was properly filed in state court.
The tribe had sued Becker and 3rd District Judge Barry Lawrence in federal court, arguing that state court was not the right venue to decide the legal dispute. Federal laws, court rulings and treaties made federal court the proper venue, the tribe claimed.
But Shelby in a recent hearing suggested the tribe was arguing that it had entered into a contract with Becker that was not enforceable.
"This contract that is before us is one that was doomed to fail before it was negotiated by the tribe is your answer," the judge told an attorney for the tribe. "It was all a fiction."
Shelby's oral ruling means Becker's lawsuit can proceed in state court.
Becker's attorney, David Isom, said the ruling "seems significant both from the perspective of federal courts and state courts."
The decision follows a previous one by U.S. District Judge Dee Benson in which he threw out Becker's first lawsuit against the tribe that was filed in federal court. Benson ruled, on a motion from the tribe, that state court was the proper place for a lawsuit in which the main cause of action, the alleged breech of contract, was governed by state law.
Benson's ruling was upheld by the 10th Circuit Court of Appeals. After that, Becker filed his complaint in state court.
In June, he sought a default judgment seeking $23 million, claiming the tribe had ignored a court order to produce financial records.
The tribe then went back to federal court to try to halt that action.
Isom said Shelby's ruling will restart the case in state court, where a September hearing is scheduled on Becker's motion for a default judgment. But on Tuesday, attorneys for the tribe filed a notice of appeal of Shelby's ruling to the 10th Circuit Court of Appeals.
"In earlier rulings, the 10th Circuit has made clear that federal courts have jurisdiction under the circumstances presented under the tribe's complaint in this case," attorney Frances Bassett said in an email. "So the tribe and its attorneys are confident that the dismissal of the tribe's complaint will be reversed on appeal."