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NO. 67050-6-1COURT OF APPEALSDIVISION IOF THE STATE OF WASHINGTONOUTSOURCE SERVICES MANAGEMENT, LLC,Respondent,vs.NOOKSACK BUSINESS CORPORATION,Appellant.APPELLANT'S OPENING BRIEFConnie Sue Martin, WSBA #26525Averil Budge Rothrock, WSBA #24248SCHWABE, WILLIAMSON & WYATT, P.C.U.S. Bank Centre1420 5th Avenue, Suite 3400Seattle, WA 98101-4010Telephone 206.622.1711Fax 206.292.0460Attorneys for Appellant Nooksack Business Corporation- . M.N'--.§-z:-(') . "'0 -t1.,:E r»-ot"1UJ 3:1:! U'»""!'4C) .

TABLE OF CONTENTSI.INTRODUCTION . 1II.ASSIGNMENTS OF ERROR . .2III.ISSUES PERTAINING TO ASSIGNMENTS OF ERROR . 3IV.STATEMENT OF THE CASE . 4A.Nooksack Business Corporation entered intoagreements to finance its Nooksack River Casino onthe Nooksack Indian Reservation . .4B.The agreement vested control over all of theproceeds of the Casino's operations in the lender. . 5C.The agreements contained limited waivers of. .ImmunI'ty . . 9sovereIgnD.Nooksack Business Corporation defaulted andOutsource Services Management required it to enterinto a series of forbearance agreements . 10E.The trial court denied the Nooksack BusinessCorporation's motion to dismiss Outsource ServicesManagement's complaint for defects fatal to thislawsuit. . 11V.ARGUMENT . 12A.Standards of Review All Are De Novo . 13B.Dismissal Was Proper Because The Trial CourtLacks Subject Matter Jurisdiction . 151.Washington State courts lack subject matterjurisdiction over civil suits by non-Indiansagainst Indians where, as here, the cause ofaction arises on an Indian reservation . 152.The trial court erred as a matter of law inconcluding that it obtained subject matterjurisdiction by virtue of the parties' forumselection clause . 19C.Dismissal Was Proper Because the Trial CourtLacks Personal Jurisdiction and the Lender Failedto State a Claim Upon Which Relief Can BeGranted Where the Agreements Are Void andUnenforceable under the Indian Gaming RegulationAct. . 27

TABLE OF CONTENTS1.2.3.VI.The Loan Agreement and ForbearanceAgreements are void and unenforceableunder the Indian Gaming Regulation Act. . .27Because the waivers of sovereign immunityin the void agreements are unenforceable,Washington courts lack personal jurisdictionover Nooksack Business Corporation . .41Because the agreements are unenforceable,the trial court should have dismissed thecomplaint for OSM's failure to state a claim . .43CONCLUSION . 43

TABLE OF AUTHORITIESFEDERAL CASESA.K. Mgt. Co. v. San Manuel Band of Mission Indians,789 F .2d 785 (9th Cir. 1986) . .42Altheimer & Gray v. Sioux Manufacturing Corp.,983 F.2d 803 (N.D. Ill. 1993) . 5Burger King Corp. v. Rudzewicz,471 U.S. 462,105 S. Ct. 2174,85 L. Ed. 2d 528 (1985) . .23C & L Enterprises Inc. v. Citizen Band of Potawatomi IndianTribe of Okla.,532 U.S. 411,121 S. Ct. 1589, 149 L. Ed. 2d 623 (2001) . 26Catskill Developmentt L.L. C v. Park Place Entertainment Corp.,No. 06-5860,2008 U.S. App. LEXIS 21839 (2ndCir. Oct.21,2008) . 31First America Kickapoo Operations, L.L.C v. Multimedia Games,Inc.,412 F.3d 1166 (lOth Cir. 2005) . .30, 31, 36, 40, 41Gaming World International, Ltd. v. White Earth Band ofChippewa Indians,317 F.3d 840 (8th Cir. 2003) . .40Golden Pisces, Inc. v. Fred Wahl Marine Construction, Inc.,495 F.3d 1078 (9th Cir. 2007) . 28, 29, 41Jena Band of Choctaw Indians v. Tri-Millenium Corp.,387 F. Supp. 2d 671 (W.D. La. 2005) . 31Machal Inc. v. Jena Band of Choctaw Indians,387 F. Supp. 2d 659 (W.D. La. 2005) . 31Match-E-B-Nash-She-Wish Band ofPottawatomi Indians v. KeanArgovitz Resorts,249 F. Supp. 2d 901 (W.D. Mich. 2003), vacated andremanded on other grounds, 383 F.3d 512 (6th Cir. 2004) . 34

TABLE OF AUTHORITIESNL.R.B. v. Bell Aerospace Co.,416 U.S. 267, 94 S. Ct. 1757,40 L. Ed. 2d 134 (1974) . 33o.R.S. Distilling v. Brown-Forman Corp.,972 F.2d 924 (8th Cir. 1992) . .14In re Prairie Island Dakota Sioux,21 F.3d 302 (8th Cir. 1994) . 21R.C. Hedreen Co. v. Crow Tribal Housing Authority,521 F. Supp. 599 (D. Mont. 1981) . .24Santa Clara Pueblo v. Martinez,436 U.S. 49, 98 S. Ct. 1670,56 L. Ed. 2d 106 (1978) . .42Tamiami Partners, Ltd. v. Miccosukee Tribe of Indians of Florida,63 F.3d 1030 (11th Cir. 1995) . .40United States v. Casino Magic Corp.,293 F.3d 419 (8th Cir. 2002) . 33, 34, 38Waldau v. Merit System Prot. Board,19 F.3d 1395 (Fed. Cir. 1994) . .33Weeks Construction, Inc. v. Oglala Sioux Housing Authority,797 F.2d 668 (8th Cir. S.D. 1986) . 24Wells Fargo Bank, NA. v. Lake of the Torches Econ. DevelopmentCorp.,677 F. Supp. 2d 1056 (W.D. Wis. 2010) . .30, 35Wells Fargo Bank, NA. v. Lake of the Torches EconomicDevelopment Corp.,658 F.3d 684 (7th Cir. 2011) . .3, 27,28,36,39,40,41,44Williams v. Lee,358 U.S. 217, 79 S. Ct. 269, 3 L. Ed. 2d 251 (1959)17, 18,25,26,27

TABLE OF AUTHORITIESSTATE CASESIn re Adoption of Buehl,87 Wn.2d 649,555 P.2d 1334 (1976) . .15Anderson & Middleton Lumber Co. v. Quinault Indian Nation,130 Wn.2d 862, 929 P.2d 379 (1996) . 14Barnett v. Hicks,119 Wn.2d 151, 829 P .2d 1087 (1992) . 20, 21Berg v. Hudesman,115 Wn.2d 657,801 P.2d 22 (1990) . 14Berg v. Ting,125 Wn.2d 544, 554, 886 P.2d 564 (1995) . 30Bradley v. Crow Tribe of Indians,315 Mont. 75,67 P. 3d 306 (2003) (see CP 74) . 25, 26Cascade Timber Co. v. N Pac. Railway Co.,28 Wn.2d 684,184 P.2d 90 (1947) . 29Cohen v. Little Six, Inc.,543 N.W.2d 376 (Ct. App. Minn. 1996) . 21Contreras v. Crown Zellerbach,88 Wn.2d 735, 656 P.2d 1173 (1977) . 1Crosby v. Spokane County,137 Wn.2d 296, 971 P.2d 32 (1999) . 11Davis v. Wash. State Department of Labor & Industrial,159 Wn. App. 437, 245 P.3d 253 (2011) . .15Dix v. ICT Group, Inc.,160 Wn.2d 826, 161 P.3d 1016 (2007) . 6

TABLE OF AUTHORITIESDougherty v. Department of Labor & Industrial,150 Wn.2d 310,76 P.3d 1183 (2003) . 6,9,20,23Fluke Corp. v. Hartford Accident & Indemnity Co.,102 Wn. App. 237, 7 P.3d 825 (2000), affd, 145 Wn.2d137,34 P.3d 809 (2001) . .29Fortier v. Fortier,23 Wn.2d 748,162 P.2d 438 (1945) . 16,19,20,23Foundation Reserve Insurance Co. v. Garcia,734 P.2d 754 (N.M. Supreme Court 1987) . .18Helgeson v. City of Marysville,75 Wn. App. 174,881 P.2d 1042 (1994) . .29Kysar v. Lambert,76 Wn. App. 470, 887 P.2d 431 (1995) . 23Marley v. Department of Labor & Industrial,125 Wn.2d 533,886 P.2d 189 (1994) . 22In re Marriage of Ortiz,108 Wn.2d 643, 740 P.2d 843 (1987) . 16Nelson v. Dubois,232 N.W.2d 54 (N.D. 1975) . 16, 24Oltman v. Holland America Line USA, Inc.,163 Wn.2d 236, 178 P .3d 981 (2008) . 19Orwick v. Seattle,103 Wn.2d 249, 692 P.2d 793 (1984) . .43Peterson v. Nichols,11 0 Wn. 288, 188 P.2d 498 (1920) . .41Powell v. Farris,94 Wn.2d 782, 620 P.2d 525 (1980) . .16

TABLE OF AUTHORITIESSherwood & Roberts-Yakima, Inc. v. Leach,67 Wn.2d 630,409 P.2d 160 (1965) . .29Skagit Surveyors & Eng'rs, L.L.C v. Friends ofSkagit County,135 Wn.2d 542, 958 P.2d 962 (1998) . .15, 20Skamania County v. Columbia River Gorge Commission,144 Wn.2d 30, 26 P.3d 241 (2001) . .14Smale v. Noretep,150 Wn. App. 476, 208 P.3d 1180 (2009) . .42State v. B.P.M,97 Wn. App. 294, 982 P.2d 1208 (1999) . .42State v. Buchanan,138 Wn.2d 186,978 P.2d 1070 (1999) . 15State v. Cooper,130 Wn.2d 770,928 P.2d 406 (1996) . 17State v. Franks,105 Wn. App. 950,22 P.3d 269 (2001) . .22Sunnyside Valley Irrigation District v. Dickie,149 Wn.2d 873, 73 P.3d 369 (2003) . .14Thompson v. Crow Tribe of Indians,962 P.2d 577, (Mont. 1998) . .37Underwood v. Sterner,63 Wn.2d 360, 387 P.2d 366 (1963) . 25United States ex reI. St. Regis Mohawk Tribe v. President R.C-St.Regis Management Co.,No. 7:02-CV-845, 2005 WL 1397133 (N.D. N.Y. June 13,2005), affd on other grounds, 451 F.3d 44,50 . 31Vedder v. Spellman,78 Wn.2d 834, 480 P.2d 207 (1971) . 29

TABLE OF AUTHORITIESVoicelink Data Services, Inc. v. Datapulse, Inc.,86 Wn. App. 613, 937 P.2d 1158 (1997) . .20Wesley v. Schneckloth,55 Wn.2d 90,346 P.2d 658 (1959) . 15, 20Wright v. Colville Tribal Enter. Corp.,159 Wn.2d 108, 147 P.3d 1275 (2006) . 1FEDERAL STATUTES25 C.F .R. § 502.15 . 3225 C.F.R. § 502.5 . 3225 C.F.R. § 502.l9(b)(2) . 3325 C.F.R. § 533 . 625 C.F.R. § 535 . 625 C.F.R. § 533.7 . 2, 13,31,39,4425 U.S.C. § 1322 (1976) . 1625 U.S.C. § 2702(1) . 30,3925 U.S.C. § 2702(2) . 30, 3925 U.S.C. §§ 2705(a)(4) . 3125 U.S.c. §§ 271O(a)(1), (b)(1),(A) . 5, 30, 3425 U.S.C. §§ 271O(d)(9) . 5,30,3425 U.S.C. § 2711 . 30, 3125 U.S.C. § 2711(a)(3) . 8

TABLE OF AUTHORITIESAct of August 15, 1953, ch. 505, § 7, 67 Stat. 590 . .16Major Crimes Act, 18 U.S.C. § 1153 . 21STATE STATUTESRCW 9.46.010 . 5RCW 37.12 . 16RCW 37.12.010 . 16, 22RCW37.12.021 . 17MISCELLANEOUSNIGC. Washburn Article at 345 . 9Restatement (Second) of Contracts § 7 cmt. a (1981) . 3Kevin K. Washburn, The Mechanics of Indian GamingManagement Contract Approval, 8 Gaming L. Rev. 333,346 (2004) . 7

I.INTRODUCTIONThis Court should reverse for legal errors the denial of theNooksack Business Corporation's motion to dismiss Outsource ServicesManagement LLC's compl

Seattle, WA 98101-4010 Telephone 206.622.1711 Fax 206.292.0460 . Anderson & Middleton Lumber Co. v. Quinault Indian Nation, 130 Wn.2d 862, 929 P.2d 379 (1996) . 14 Barnett v. Hicks, 119 Wn.2d 151, 829 P .2d 1087 (1992) . 20, 21 Berg v. Hudesman, 115 Wn.2d 657,801 P.2d 22 (1990) . 14 Berg v. Ting, 125 Wn.2d 544, 554, 886 P.2d 564 (1995) . 30 Bradley v. Crow Tribe of Indians .