(CN) - Arizona's Hualapai Indian Tribe illegally seized the Grand Canyon Skywalk, and it would be futile for the developer to seek relief in tribal court, an attorney told the 9th Circuit.
Las Vegas-based Grand Canyon Skywalk Development (GCSD) and developer David Jin conceived, built and for many years managed the glass-bottom walkway that hangs 4,000 feet above the western Grand Canyon on the Hualapai Tribe's large, remote reservation in northwest Arizona.
Jin and a tribal corporation operated the attraction together from 2003 until early 2012, when the tribe passed a local ordinance allowing it to condemn the Skywalk. In February, GCSD sued for breach of contract and sought an injunction to reverse the seizure. The condemnation and subsequent lawsuit escalated years of bickering between the parties over Jin's alleged failure to build a visitor center and the tribe's alleged failure to account for profits and properly manage the attraction, among other things.
U.S. District Judge David Campbell stayed the case in March and ordered GCSD to exhaust its options in Hualapai Tribal Court, located in the reservation town of Peach Springs, Ariz., along old Route 66.
A three-judge panel of the 9th Circuit heard the developer's appeal to that order Friday in San Francisco.
Attorney Troy Eid, arguing for GCSD, called the Hualapai ordinance that allowed the tribe to seize the Skywalk "an extreme exercise of tribal sovereignty," echoing his claim in an opening brief that it "may be the most draconian eminent-domain ordinance enacted in the United States."
Since the tribal council's 2011 ordinance had "stripped the tribal court of its authority to act as a judiciary," GCSD is not required to take the case to tribal court before moving on to the federal court, Eid said.
The judges seemed skeptical.
"The parties acknowledge in the contract, in writing, that they will comply with appropriate tribal law, do they not," Judge Richard Tallman asked.
Judge Consuelo Callahan chimed in: "It seems to me they did."
Eid acknowledged that this was so, but pointed out that, "when tribal officials go beyond what is allowed, we can seek federal relief."
In his opening brief, Eid had said that the tribal court is being "grossly manipulated by members of the tribal council." He said his client should get to skip that step because of the "shameless and unrelenting bad faith" of the tribes.
Judge Tallman said that he had seen no evidence of the tribal court's dysfunction.
Eid told the court that GCSD thought that an arbitrator would handle disputes with the tribal corporation. In August, the American Arbitration Association issued a $28 million award to GCSD, finding that the tribe had breached the parties' agreement. GCSD asked the U.S. District Court to confirm the award in September.
Arguing for the tribal-chartered company 'Sa' Nyi Wa Inc., attorney Jeffrey Gross set a high standard for a finding in favor of the developer.
"To accept appellants' position, you have to decide, as a matter of law, that a tribe plainly has absolutely no jurisdiction over a nonmember who comes onto the reservation to conduct business, to hire tribal member, and agrees to comply with Hualapai law; and, with no evidence whatsoever, that that litigant would be deprived of a fair and meaningful trial in tribal court; that the tribal court cannot determine its own jurisdiction; and decide the case on its merits," he said.
Before a tribal court, the issue is likely to be a "plain vanilla condemnation case" in which the parties agree on the value of the developer's rights to the Skywalk, and the tribe pays that amount, Gross said.
"The tribal court has signed a scheduling order, and we are moving ahead with discovery and experts," he said.
After the hearing ended, Judge Raymond Fisher took advantage of what he called a "teaching moment," and warned Eid to tone down his briefs.
"The opening brief was offensive," Fisher said, recalling a time when he committed a similar sin as a young lawyer. "It was over the top in its histrionics and its use of inflammatory language."
He added that appellate judges typically "don't react well" to such briefs.
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