Failure to Join Tribe Results in Court Dismissal

By Heidi McNeil Staudenmaier and Megan Carrasco

Indian Tribes, as sovereign entities, are typically immune from suit absent a waiver of sovereign immunity. North Metro Harness Initiative, LLC, doing business as Running Aces, attempted a maneuver to bypass sovereign immunity — instead of suing the five Tribes allegedly responsible for gambling violations, Running Aces sued 39 current and former employees associated with the Tribes’ casino, seeking to hold those individuals liable for alleged Racketeer Influenced and Corrupt Organizations Act (RICO) violations associated with offering unlawful forms of gambling.

On March 11, 2025, Chief Judge Patrick J. Schultz, of the United States District Court for the District of Minnesota, granted the individuals’ motion to dismiss under Federal Rule of Civil Procedure 19 for failure to join an indispensable party — the Tribes. Order Granting Motion to Dismiss, N. Metro Harness Initiative v. Beattie, No. 24-CV-1369 (March 11, 2025).

Federal Rule of Civil Procedure 19 has a three-step inquiry. First, a court must assess whether there is an absent party who would be required under Rule 19(a). A party must be joined if without that person, the “court cannot accord complete relief among existing parties” or that person has an interest in the action such that proceeding without them could “impair or impede the person’s ability to protect the interest” or “leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.” Fed. R. Civ. P. 19(A)(1).

The twist in Rule 19 is that this “required” party must be “subject to service of process.” This becomes practically impossible when the “required” party is protected by sovereign immunity. This leads to step two — whether the absent party can be joined. Fed. R. Civ. P. 19(a)(2).

In step three, if the required party cannot be joined, the Court must decide whether “in equity and good conscious, the action should proceed among the existing parties or should be dismissed.” Fed. R. Civ. P. 19(b). There are several facts for the Court to consider in determining whether this “equity and good conscious” standard has been met including:

In Running Aces, the Plaintiff conceded that the Tribes whose casinos’ operations were being threatened obviously had an interest in the action. The Court remarked:

Plaintiff could hardly argue otherwise, as it is the Tribes (not the Defendants) who have the exclusive right to conduct gaming on their lands, the Tribes (not the Defendants) who are parties to the relevant compacts under which gaming is conducted, and the Tribes (not the Defendants) who are the intended beneficiaries of Congress’s decision to permit gaming on tribal lands. All of these interests are at stake in this litigation.

Order at 10.  

Running Aces sought to avoid this result by arguing that the employees were essentially stand-ins for the Tribes’ interests. Id. The Court rejected this contention, reasoning that “Running Aces — a bitter competitor of the Tribes — is seeking to impose crushing personal financial liability under RICO on dozens of current and former employees of the casinos.” Id. at 12. This personal financial liability stands in stark contrast to a typical stand-in claim for an elected official, who by contract, would not face personal ruin. Id. Further, the threat of personal liability also “significantly alters the settlement incentives” because individuals have significantly more motivation to avoid financial ruin and therefore may cede to declaratory or injunctive relief instead. Id. at 14. Finally, the Tribes’ interest in the litigation differs tremendously — if their casino operations were shut down it would threaten tribal self-sufficiency and a “critical source of jobs for tribal members.” Id.

As for step two, the Tribes’ sovereign immunity makes joinder impossible.

Turning to step three, the Court held that the Rule 19(b) factors weigh in favor of dismissal. As explained, the Tribes’ absence significantly threatens the remaining individual defendants and their livelihood, and there is no way to avoid this prejudice. Id. at 16-17. No matter what, Running Aces’ source of relief requires a finding that the “Tribes acted unlawfully” in offering the allegedly offending card game, which in turn, “could cripple the Tribes financially and cost the jobs of hundreds of members.” Id. at 17. In analyzing each of the factors, the Court found that the “gaming challenged in this lawsuit is of enormous economic importance to the absent Tribes” and thus dismissal was warranted without their participation.

The Running Aces decision is ultimately rooted in Congress’s expressed policy of tribal self-governance and long-standing principles of tribal sovereignty.