FILED

NOT FOR PUBLICATION JUL 19 2012

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS

FOR THE NINTH CIRCUIT

RINCON MUSHROOM CORPORATION No. 10-56521 OF AMERICA, a California corporation, D.C. No. 3:09-cv-02330-WQH- Plaintiff - Appellant, POR Southern District of California, v. San Diego

BO MAZZETTI; et al.,

ORDER

Defendants - Appellees.

Before: SILVERMAN and RAWLINSON, Circuit Judges, and TUNHEIM, District Judge.*

A majority of the panel has voted to grant the petition for panel rehearing.

Judge Rawlinson voted to deny the petition for panel rehearing.

The petition for panel rehearing is GRANTED. The Memorandum filed on

April 20, 2012 is withdrawn and replaced by the Memorandum filed

contemporaneously with this order.

The suggestion for rehearing en banc is denied as moot.

* The Honorable John R. Tunheim, United States District Judge for the District of Minnesota, sitting by designation.

FILED

NOT FOR PUBLICATION JUL 19 2012

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS

FOR THE NINTH CIRCUIT

RINCON MUSHROOM CORPORATION No. 10-56521 OF AMERICA, a California corporation, D.C. No. 3:09-cv-02330-WQH- Plaintiff - Appellant, POR

v.

MEMORANDUM *

BO MAZZETTI; et al.,

Defendants - Appellees.

Appeal from the United States District Court for the Southern District of California William Q. Hayes, District Judge, Presiding

Argued and Submitted April 12, 2012 Pasadena, California

Before: SILVERMAN and RAWLINSON, Circuit Judges, and TUNHEIM, District Judge.**

Plaintiff Rincon Mushroom Corporation of America, the owner of a five-

acre parcel within the Rincon Band of Luiseno Mission Indians tribal reservation,

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. ** The Honorable John R. Tunheim, United States District Judge for the District of Minnesota, sitting by designation. -2-

appeals the district court’s dismissal of its action to enjoin Rincon tribal officials

from enforcing tribal environmental and land-use regulations on its property on the

ground that Rincon Mushroom has not exhausted its tribal remedies.

Before bringing suit in federal court to challenge tribal jurisdiction, a non-

Indian generally must first exhaust tribal court remedies. Nat’l Farmers Union Ins.

Cos. v. Crow Tribe of Indians, 471 U.S. 845, 856 (1985). Rincon Mushroom

argues that this case falls within an exception to the tribal exhaustion requirement

for assertions of tribal jurisdiction that are not “colorable” or “plausible.” See

Elliott v. White Mountain Apache Tribal Court, 566 F.3d 842, 848 (9th Cir. 2009).

We disagree.

A tribe has jurisdiction to regulate “the conduct of non-Indians on fee lands

within the reservation when that conduct threatens or has some direct effect on the

political integrity, the economic security, or the health or welfare of the tribe.”

Montana v. United States, 450 U.S. 544, 566 (1981). We have held that both forest

fires and contamination of a tribe’s water quality are threats sufficient to sustain

tribal jurisdiction. Elliott, 566 F.3d at 850 (forest fires); Montana v. EPA, 137 F.3d

1135, 1139–40 (9th Cir. 1998) (water quality). Here, the tribe offered four

declarations explaining how activities on Rincon Mushroom’s property could

contaminate the tribe’s sole water source and increase the risk of forest fires that -3-

could jeopardize its casino (its principal economic investment). Those threats are

sufficient to make the tribe’s assertion of jurisdiction over activities on Rincon

Mushroom’s property “colorable” or “plausible.”

Rincon Mushroom points us to cases where tribal jurisdiction was absent.

But in those cases — unlike here — the plaintiff had already exhausted its tribal

remedies, and the court was addressing the tribal jurisdiction issue in the first

instance, asking whether tribal jurisdiction was actually permitted under the

second Montana exception. See Plains Commerce Bank v. Long Family Land &

Cattle Co., 554 U.S. 316 (2008); Strate v. A-1 Contractors, 520 U.S. 438 (1997);

Montana v. United States, 450 U.S. 544 (1981). Here, by contrast, Rincon

Mushroom has not exhausted its tribal remedies, so the standard (to determine

whether tribal exhaustion is required) is lower: Tribal jurisdiction need only be

“colorable” or “plausible.” Elliott, 566 F.3d at 848 (emphasis added).

We emphasize that we are not now deciding whether the tribe actually has

jurisdiction under the second Montana exception. We hold only that where, as

here, the tribe’s assertion of jurisdiction is “colorable” or “plausible,” the tribal

courts get the first chance to decide whether tribal jurisdiction is actually

permitted. If the tribal courts sustain tribal jurisdiction and Rincon Mushroom is

unhappy with that determination, it may then repair to federal court. -4-

However, we also hold that the district court abused its discretion in

dismissing the case rather than staying it. When “dismissal might mean that [the

plaintiff] would later be ‘barred permanently from asserting his claims in the

federal forum by the running of the applicable statute of limitations’ . . . the district

court should . . . stay[], not dismiss[], the federal action pending the exhaustion of

tribal remedies.” Sharber v. Spirit Mountain Gaming Inc., 343 F.3d 974, 976 (9th

Cir. 2003) (citation omitted). Here, at least some of Rincon Mushroom’s claims

would be time-barred if it had to re-file after exhausting its tribal remedies. For

example, the complaint asserts a claim under 42 U.S.C. § 1985(3) — which is

subject to a one-year statute of limitations — challenging conduct that occurred in

2006. See McDougal v. Cnty. of Imperial, 942 F.2d 668, 673–74 (9th Cir. 1991).

That claim would be time-barred if filed anew tomorrow. Thus, we reverse the

district court’s dismissal and remand with instructions to stay the case pending

Rincon Mushroom’s exhaustion of tribal remedies.

REVERSED AND REMANDED.

FILED

Rincon Mushroom Corp. v. Mazzetti, No. 10-56521 JUL 19 2012 Rawlinson, Circuit Judge, dissenting:

MOLLY C. DWYER, CLERK

U .S. C O U R T OF APPE ALS

On the issue of tribal jurisdiction over non-Indians, the United States

Supreme Court is moving in one direction and we are moving in another. In recent

years, the Supreme Court has clearly signaled that tribal jurisdiction over non-

Indians on fee simple land is tenuous, at best. The majority seemingly ignores that

signal.

This case concerns the efforts of the Rincon Band of Luiseno Indians (the

Tribe) to force compliance with its Environmental Enforcement Code and Tribal

Court Jurisdiction Ordinance upon a non-Indian on fee simple land.

Exhaustion of tribal court remedies was not required in this case because

tribal court jurisdiction was not “colorable or plausible.” Elliott v. White Mountain

Apache Tribal Court, 566 F.3d 842, 848 (9th Cir. 2009) (citation omitted). Rather,

requiring exhaustion in this case “would serve no purpose other than delay.” Id. at

847, quoting Nevada v. Hicks, 533 U.S. 353, 369 (2001).

In recent years, the Supreme Court has clarified that “a tribe’s adjudicative

jurisdiction does not exceed its legislative jurisdiction. . . .” Plains Commerce

Bank v. Long Family Land & Cattle Co., 554 U.S. 316, 330 (2008). “Once tribal

land is converted into fee simple, the tribe loses plenary jurisdiction over it. . . .”

1 Id. at 328 (citations omitted). “This necessarily entails the loss of regulatory

jurisdiction over the use of the land by others. . . .” Id. at 329 (citation and internal

quotation marks omitted). Thus, “[a]s a general rule, then, the tribe has no

authority itself, by way of tribal ordinances or actions in the tribal courts, to

regulate the use of fee land.” Id. (citation and internal quotation marks omitted).

So we start with the premise that tribal jurisdiction is lacking over the

activities of non-Indians on fee simple land. See id. Although the Supreme Court

has articulated two exceptions to the general rule of the lack of tribal jurisdiction, it

has cautioned that the exceptions are limited and “cannot be construed in a manner

that would swallow the rule, or severely shrink it . . .” Id. at 330 (citations and

internal quotation marks omitted). Yet that is precisely what the majority’s

holding does.

The second exception articulated by the Supreme Court in Montana v.

United States, 450 U.S. 544 (1981) is at issue here. That exception provides for

the exercise of tribal jurisdiction “over the conduct of non-Indians on fee lands” if

the conduct at issue “threatens or has some direct effect on the . . . health or welfare

of the tribe. . . .” Id. at 566 (citations omitted) (emphasis added).

The showing by the Tribe of a “potential for water contamination” falls short

of the direct effect envisioned by the Supreme Court. Acknowledgment of this

2 cursory and speculative basis for the exercise of tribal jurisdiction is far from

plausible in my view. Rather, it is better recognized as running afoul of the

Supreme Court’s warning against expanding the Montana exceptions to the point

the general rule against tribal jurisdiction is “swallow[ed]” or “severly shr[u]nk.”

Plains Commerce, 554 U.S. at 330.

I respectfully dissent.

3