Wapato Heritage LLC v. Sandra Evans

FILED

NOT FOR PUBLICATION MAR 31 2011

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U.S . CO U RT OF AP PE A LS

FOR THE NINTH CIRCUIT

WAPATO HERITAGE LLC, a No. 10-35237 Washington limited liability company; KENNETH EVANS, individual resident D.C. No. 2:07-cv-00314-EFS of Washington State; JOHN WAYNE JONES, individual resident of Washington State; JAMIE JONES, individual resident MEMORANDUM * of Washington State,

Plaintiffs - Appellees,

v.

SANDRA D. EVANS, an individual not a resident of Washington State,

Defendant - Appellant.

WAPATO HERITAGE LLC, a No. 10-35288 Washington limited liability company; KENNETH EVANS, individual resident D.C. No. 2:07-cv-00314-EFS of Washington State; JOHN WAYNE JONES, individual resident of Washington State; JAMIE JONES, individual resident of Washington State,

Plaintiffs - Appellants,

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. v.

SANDRA D. EVANS, an individual not a resident of Washington State; DAN GARGAN, a…

MEMORANDUM *

William Wapato Evans’ heirs settled their dispute over his estate by executing a Settlement and Release Agreement (“Settlement Agreement”), which required, among other things, that his daughter Sandra Evans (“Sandra”) make payments from her Individual Indian Money (“IIM”) account in the form of a loan to a corporation owned by her nephews called Wapato Heritage, LLC. Sandra expected that the payments would require oversight and approval by the Bureau of Indian Affairs (“BIA”), and when the BIA said that she was free to authorize the payments without its approval, Sandra refused to authorize the payments. Wapato Heritage then sued her for breach of contract and sued her financial advisor, Dan Gargan (“Gargan”), for tortious interference with contract. The district court denied Sandra’s motion to dismiss for lack of subject-matter jurisdiction, and entered summary judgment in favor of Gargan on the tortious interference claim and in favor of Wapato Heritage on the contract claim. Sandra appeals the denial of her motion to dismiss and the entry of summary judgment in favor of Wapato Heritage; Wapato Heritage appeals the entry of summary judgment in favor of Gargan; and…

dissenting in part:

While I substantially agree with my colleagues’ analysis of the merits of Wapato *560 Heritage’s breach-of-contract claim, I am nevertheless compelled to dissent because I do not believe we have jurisdiction to undertake that analysis. To enforce the Settlement Agreement, Wapato brings a garden-variety state law contract claim that simply does not “arise under” federal law for the purposes of establishing federal question jurisdiction under 28 U.S.C. § 1331 . Therefore, I would reverse the district court’s denial of Evans’ motion to dismiss for lack of federal question jurisdiction and remand for a determination as to whether Wapato Heritage can nonetheless establish jurisdiction through diversity of citizenship under 28 U.S.C. § 1332 . I join my colleagues in affirming the district court’s grant of summary judgment in favor of Gargan on the tortious interference claim.

State law supplies the substantive rules of decision for Wapato Heritage’s breach-of-contract claim. See Erie R. Co. v. Tompkins, 304 U.S. 64, 78 , 58 S.Ct. 817 , 82 L.Ed. 1188 (1938). Federal question jurisdiction may nonetheless lie if this state law claim raises a substantial and disputed…