MATT LAW OFFICE, PLLC Terryl T. Matt, Esq. 310 East Main Street · 2020. 10. 19. · MATT LAW OFFICE, PLLC Terryl T. Matt, Esq. 310 East Main Street Cut Bank, MT 59427 Telephone:

MATT LAW OFFICE, PLLC Terryl T. Matt, Esq. 310 East Main Street Cut Bank, MT 59427 Telephone: (406) 873-4833 Fax: (406) 873-4944 [email protected] Attorney for Plaintiffs

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA

BILLINGS DIVISION

LEROY NOT AFRAID and GINGER GOES AHEAD, Plaintiffs, vs. THE UNITED STATES OF AMERICA, and LOUISE ZOKAN-DELOS REYES, in her official and individual capacity; and JO-ELLEN CREE, in her official and individual capacity,

Defendants.

Case No. CV-19-100-BLG-SPW-TJC PLAINTIFFS’ BRIEF IN RESPONSE TO MOTION TO DISMISS

Case 1:19-cv-00100-SPW-TJC Document 20 Filed 01/17/20 Page 1 of 35

Response to Motion to Dismiss – Page 2

TABLE OF CONTENTS

TABLE OF CONTENTS ....................................................................................... 2

TABLE OF AUTHORITIES ................................................................................. 4

INTRODUCTION ................................................................................................. 7

BACKGROUND ................................................................................................... 7

LEGAL STANDARD ............................................................................................ 8

ARGUMENT ......................................................................................................... 8

A. THE FTCA INTENTIONAL TORT AND DISCRETIONARY FUNCTION EXCEPTIONS DO NOT PRECLUDE PLAINTIFFS’ CLAIMS. ..................................................................................................... 9

1. Plaintiffs’ claims are not defamation claims and are not barred by the intentional torts exception to the FTCA. .................................. 9

2. Plaintiffs’ claims are not barred by the FTCA discretionary function exception. ........................................................................... 12

B. PLAINTIFFS HAVE ASSERTED A COGNIZABLE BIVENS CLAIM. ..................................................................................................... 17

C. THE INDIVIDUAL DEFENDANTS ARE NOT ENTITLED TO QUALIFIED IMMUNITY. ........................................................................ 24

D. PLAINTIFFS STATE A CLAIM FOR THEIR NEGLIGENCE-BASED CLAIMS. ..................................................................................... 25

1. Plaintiffs have alleged the existence of duties. ....................... 25

2. Plaintiffs have alleged breaches of the duties alleged. ............ 27

3. Plaintiffs have alleged causation. ........................................... 30

E. PLAINTIFFS HAVE ADEQUATELY ALLEGED CONSTRUCTIVE FRAUD AND BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING. ........................ 31

CONCLUSION.................................................................................................... 33



CERTIFICATE OF COMPLIANCE .................................................................... 34

CERTIFICATE OF SERVICE ............................................................................. 35



TABLE OF AUTHORITIES

Cases

Adams v. Johnson, 355 F.3d 1179 (9th Cir. 2004) ............................................... 18

Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137 (D.C. Cir. 2011) ................................. 8

Anderson v. Creighton, 483 U.S. 635 (1987) ....................................................... 24

ARA Leisure Servs. v. United States, 831 F.2d 193 (9th Cir. 1987) .......... 13, 15, 17

Arrowhead Sch. Dist. No. 75 v. Klyap, 79 P.3d 250 (Mont. 2003) ....................... 26

Ashcroft v. al-Kidd, 563 U.S. 731 (2011)............................................................. 24

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) ............................................ 7, 8, 27, 28

Bailey v. United States, 623 F.3d 855 (9th Cir. 2010) .......................................... 15

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .................................... 7, 8, 27, 28

Berkovitz v. United States, 486 U.S. 531 (1988) .................................................. 14

Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971) . 18, 19, 20, 21, 22, 23, 24

Bixby v. KBR, Inc., 893 F. Supp. 2d 1067 (D. Or. 2012)...................................... 32

Block v. Neal, 460 U.S. 289 (1983) ..................................................................... 10

Bolt v. United States, 509 F.3d 1028 (9th Cir. 2007) ........................................... 15

Covey v. Brishka, 445 P.3d 785 (Mont. 2019) ..................................................... 31

Dalehite v. United States, 346 U.S. 15 (1953) ..................................................... 13

Dellums v. Powell, 566 F.2d 167 (D.C. Cir. 1977) ............................................... 19

DiMartini v. Ferrin, 889 F.2d 922 (9th Cir. 1989), amended on pet. for rehearing en banc, 906 F.2d 465, 466 (9th Cir. 1990)....................................................... 19

Erickson v. United States, 976 F.2d 1299 (9th Cir. 1992)..................................... 19

Faber v. United States, 56 F.3d 1122 (9th Cir. 1995) .......................................... 13



Gibson v. United States, 781 F.2d 1334 (9th Cir. 1986) ....................................... 19

Harlow v. Fitzgerald, 457 U.S. 800 (1982) ......................................................... 24

Harris v. Roderick, 126 F.3d 1189 (9th Cir.1997) ............................................... 31

Hartman v. Moore, 547 U.S. 250 (2006) .............................................................. 19

Hoesl v. United States, 451 F. Supp. 1170 (N.D. Cal. 1978), aff’d, 629 F.2d 586 (9th Cir. 1980) .................................................................................................. 11

Indian Towing Co. v. United States, 350 U.S. 61 (1955) .................... 12, 15, 16, 17

Jefferson v. Harris, 170 F. Supp. 3d 194 (D.D.C. 2016) ................................. 10, 11

Lanuza v. Love, 899 F.3d 1019 (9th Cir. 2018) ................. 18, 20, 21, 22, 23, 24, 25

Marlys Bear Medicine v. U.S. ex rel. Sec’y of Interior, 241 F.3d 1208 (9th Cir. 2001) ............................................................................................... 12, 15, 16, 17

Mendocino Envtl. Ctr. v. Mendocino Cnty., 14 F.3d 457 (9th Cir. 1994) .............. 19

Moss v. Secret Service, 572 F.3d 962 (9th Cir. 2009) ........................................... 19

Myers v. United States, 652 F.3d 1021 (9th Cir. 2011) ........................................ 13

Nance v. E.P.A., 645 F.2d 701 (9th Cir. 1981) ..................................................... 26

Nurse v. United States, 226 F.3d 996 (9th Cir. 2000) .......................................... 14

Paton v. La Prade, 524 F.2d 862 (3d Cir. 1975) .................................................. 19

Peeler v. Rocky Mountain Log Homes Can., Inc., 431 P.3d 911 (Mont. 2018) ... 27, 33

Rayonier Inc. v. United States, 352 U.S. 315 (1957) ........................................... 10

Saucier v. Katz, 533 U.S. 194 (2001) ................................................................... 24

Seminole Nation v. United States, 316 U.S. 286 (1942) ....................................... 26

Sheehan v. United States, 896 F.2d 1168 (9th Cir. 1990) ...................................... 9

Soldano v. United States, 453 F.3d 1140 (9th Cir. 2006) ..................................... 14

Story v. Bozeman, 791 P.2d 767 (1990) ............................................................... 26



Taylor v. Barkes, 135 S.Ct. 2042 (2015) .............................................................. 24

Terbush v. United States, 516 F.3d 1125 (9th Cir. 2008) ..................................... 13

Tsosie ex rel. Estate of Tsosie v. U.S., 441 F. Supp. 2d 1100 (D.N.M. 2004) ...... 26

United States v. Gaubert, 499 U.S. 315 (1991) .................................................... 14

United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797 (1984) ......................................................................................... 13

Westra v. Marcus, 129 Cal. App. 4th 759 (Cal. Ct. App. 2005) ...................... 27, 33

Whisnant v. United States, 400 F.3d 1177 (9th Cir. 2005) ........................ 14, 15, 17

Wood v. Moss, 134 S. Ct. 2056 (2014) ................................................................. 19

Ziglar v. Abbasi, 137 S. Ct. 1843 (2017) ............................................ 18, 20, 21, 22

Statutes

28 U.S.C. § 2680 ...............................................................................................9, 13

Federal Tort Claims Act (FTCA), 28 U.S.C. § 2671-2680 .. 7, 9, 11, 12, 16, 25, 26

Mont. Code Ann. § 27-1-802 ................................................................................. 9

Mont. Code Ann. § 28-1-211 ............................................................................... 26

Rules

D. Mont. L.R. 7.1(d)(2) ........................................................................................ 34

Fed. R. Civ. P. 12(b) .................................................................................. 7, 8, 30

Constitutional Provisions

U.S. Const. Amend. I .......................................................................... 17, 19, 21, 26

U.S. Const. Amend. V ........................................................................ 18, 19, 21, 26



INTRODUCTION

Plaintiffs Leroy Not Afraid (Not Afraid), and Ginger Goes Ahead

(Goes Ahead) (Plaintiffs, collectively), hereby submit this Response to the

Fed. R. Civ. P. 12(b)(1) and (6) motion to dismiss filed by Defendants the

United States of America; DOI RMR Indian Services Officer, Louise Zokan-

Delos Reyes (Reyes); and DOI RMR Tribal Operations Officer, Jo-Ellen Cree

(Cree) (Defendants, collectively). As set forth herein, Plaintiffs have asserted

claims upon which relief can be granted, and the statutory exceptions to the

waiver of sovereign immunity in the Federal Tort Claims Act (FTCA), 28 U.S.C.

§ 2671-2680, do not apply. Accordingly, Plaintiffs respectfully request that the

Court deny the motion to dismiss and allow Plaintiffs the opportunity to present

their claims to a jury.

BACKGROUND

Because Defendants have filed a motion to dismiss (dkt. 13-14) under Fed.

R. Civ. P. 12(b), the relevant facts are those alleged in the Amended Complaint

(the Complaint) (dkt. 4), which are to be accepted as true and construed in a light

most favorable to Plaintiffs. See Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Plaintiffs

hereby incorporate the allegations of the Complaint (dkt. 4) as if set forth fully

herein.

In sum, Plaintiffs, who worked in the Crow Tribal Court, sued Defendants



for preparing an Awarding Officials Technical Representative Report (AOTR) that

levelled numerous false and misleading accusations against them. As a result of

the AOTR, Plaintiffs suffered economic harm, damage to reputation and

emotional damages, including wrongful termination from employment. The

AOTR was conducted in connection with contract number A12AV00409 (the

Contract) between the United States, acting through the Department of Interior

(DOI) and Bureau of Indian Affairs (BIA), and the Crow Tribe.

Plaintiffs have sued Defendants for their misconduct in an Amended

Complaint (the Complaint) asserting VIII claims for relief. Defendants have

moved to dismiss these claims (dkt. 13-14) and Plaintiffs hereby submit this

response.

LEGAL STANDARD

A Fed. R. Civ. P. 12(b)(6) motion tests whether the complaint “state[s] a

claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “To survive a

motion to dismiss [under Rule 12(b)(6)], a complaint must contain sufficient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its

face.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). A plaintiff

receives the “benefit of all inferences that can be derived from the facts

alleged.” Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir.

2011) (internal quotation marks and citation omitted).

ARGUMENT



A. THE FTCA INTENTIONAL TORT AND DISCRETIONARY FUNCTION EXCEPTIONS DO NOT PRECLUDE PLAINTIFFS’ CLAIMS.

1. Plaintiffs’ claims are not defamation claims and are not barred by the intentional torts exception to the FTCA.

Plaintiffs’ claims asserted in Counts II-V and VII1 are precisely what they

purport to be. They are not, as the Defendant argue, disguised claims for

defamation. The reason for this is straightforward – Defendants owed various

duties to Plaintiffs separate and apart from the duty to refrain from “unprivileged

publication […] that exposes any person to hatred, contempt, ridicule, or obloquy

or causes a person to be shunned or avoided or that has a tendency to injure a

person in the person’s occupation.” Mont. Code Ann. § 27-1-802. As alleged in

the Complaint, the Defendants breached these respective duties, and these

breaches are not covered by the FTCA. That these breaches may have also

constituted defamation is irrelevant to the FTCA analysis.

The intentional torts exception to the FTCA is strictly construed. Sheehan v.

United States, 896 F.2d 1168, 1170 (9th Cir. 1990) (“[there] is no justification for

this Court [or any court] to read exemptions into the [Federal Tort Claims] Act

beyond those provided by Congress.”) (quoting Rayonier Inc. v. United States,

1 Plaintiffs concede that their claim for interference with contractual relations

(Count VI) is precluded by 28 U.S.C. § 2680(h). Plaintiffs therefore withdraw that count and/or consent to its dismissal.



352 U.S. 315, 320 (1957)). Additionally, the government may not evade liability

simply because its conduct may constitute conduct protected under the FTCA, in

addition to unprotected conduct. See Block v. Neal, 460 U.S. 289, 298 (1983)

(“Neither the language nor history of the [FTCA] suggests that when one aspect of

the Government’s conduct is not actionable under the “misrepresentation”

exception, a claimant is barred from pursuing a distinct claim arising out of other

aspects of the Government’s conduct.”).

A district court in the District of Columbia rejected precisely the argument

that Defendants advance here. Jefferson v. Harris, 170 F. Supp. 3d 194, 206

(D.D.C. 2016). In Jefferson, the plaintiff served as an Assistant Secretary of Labor

in the Department of Labor (DOL). Id. at 198-99. The DOL’s Office of Inspector

General (OIG) conducted an investigation and prepared a report regarding the

plaintiff’s possible legal and ethical violations. Id. The report concluded that

plaintiff in fact committed legal and ethical violations in the hiring of three

consultants. Id. at 199-201. In response to the report, the DOL placed the plaintiff

on administrative leave, and the findings of the report were shared with the media.

Id. at 201-02. The plaintiff resigned and found it difficult to find a new job as a

result of the report. Id. at 202.

Plaintiff sued, asserting various claims alleging generally that the report was

flawed and the conclusions presented were inaccurate. Id. at 202. The defendants

argued, as Defendants argue in the above-captioned matter, that the plaintiff’s



claims were defamation claims in disguise, and thus barred by the FTCA. Id. at

206. The court rejected this argument because

[i]n attacking not only the defamatory statements themselves, but also his loss of employment and the inadequacy of the procedural protections available for challenging the accusations levied against him, Plaintiff makes clear that he is not simply relying on artful pleading to constitutionalize a simple tort claim.

Jefferson, 170 F. Supp. 3d at 206.

Likewise, in the present case, Defendants’ reliance on the FTCA “falls flat.”

Id. Although Plaintiffs claims possess some of the same characteristics of a

defamation claim, Plaintiffs are not simply relying on artful pleading to bring a

simple tort claim. Id. Like the plaintiff in Jefferson, Plaintiffs here are “attacking

not only the defamatory statements themselves, but also [their] loss of employment

and the inadequacy of procedural protections available for challenging the

accusations levied against [them]”, as well as violations of tribal sovereignty and

the rights of tribal members. Id. As in Jefferson, although Defendants’ conduct

also constitutes defamation, Plaintiffs have stated claims premised on breaches of

duties separate and apart from the duty to refrain from making defamatory

statements, and damages beyond those that would naturally follow from

defamation. The FTCA does not bar these claims.

The Defendants reliance on Hoesl v. United States is misplaced. 451 F.

Supp. 1170, 1174 (N.D. Cal. 1978), aff’d, 629 F.2d 586 (9th Cir. 1980).

However, closer review of the facts in that case reveal critical distinctions. In



Hoesl, a plaintiff sued a government doctor for medical malpractice. Id.

However, the plaintiff failed to allege a mistaken diagnosis followed by resulting

improper treatment and injury to the patient’s physical or mental health, and thus

failed to allege a traditional malpractice claim. Hoesl, 451 F. Supp. at 1173.

Because the plaintiff made no such allegations, the court held he in fact asserted

only a claim for defamation, which is precluded by the FTCA. Id. at 1173-75.

Plaintiffs here have alleged facts and duties that support claims other than

defamation. Jefferson, not Hoesl, presents the relevant analysis and, pursuant to

that analysis, Plaintiffs’ claims are not barred by the FTCA.

2. Plaintiffs’ claims are not barred by the FTCA discretionary function exception.

Defendants’ invocation of the discretionary function exception to the

government’s waiver of sovereign immunity under the FTCA is misplaced

because Plaintiffs have alleged that Defendants contractually agreed to take on

certain duties and then failed to perform those duties. Under these circumstances,

courts have regularly rejected the government’s assertion of immunity pursuant to

the discretionary function exception. See Indian Towing Co. v. United States, 350

U.S. 61, 68-69 (1955) (the government’s decision to build a lighthouse was

protected from liability, but the manner in which it operated the lighthouse was

not); Marlys Bear Medicine v. U.S. ex rel. Sec’y of Interior, 241 F.3d 1208, 1215

(9th Cir. 2001) (distinguishing “the decision to take safety measures” from “the



negligent implementation of those measures.”); Faber v. United States, 56 F.3d

1122, 1124 (9th Cir. 1995) (“in cases where the government is alleged to have

committed negligence in the performance of a function such as that performed by

a private citizen, rather than in the fulfillment of a broad policy-making duty, the

government is subject to suit.”).

The discretionary function exception to federal waiver of sovereign

immunity provides immunity from suit for “[a]ny claim based upon the exercise

or performance or the failure to exercise or perform a discretionary function or

duty on the part of a federal agency or an employee of the Government, whether

or not the discretion involved be abused.” 28 U.S.C. § 2680(a). “The government

bears the burden of proving that the discretionary function exception applies.”

Myers v. United States, 652 F.3d 1021, 1028 (9th Cir. 2011).

The purpose of the discretionary-function exception is to prevent tort claims

from becoming a medium for “judicial ‘second guessing’ of legislative and

administrative decisions grounded in social, economic, and political policy ....”

Terbush v. United States, 516 F.3d 1125, 1129 (9th Cir. 2008) (citing United

States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S.

797, 814 (1984)); Myers, 652 F.3d at 1028. In other words, the exception

immunizes only high-level policy decisions, not “garden variety” tort claims. See,

e.g., ARA Leisure Servs. v. United States, 831 F.2d 193, 196 (9th Cir. 1987); see

also Dalehite v. United States, 346 U.S. 15, 28 (1953).



There is a two-step inquiry to determine whether the discretionary function

exception applies. Nurse v. United States, 226 F.3d 996, 1001 (9th Cir. 2000).

First, the court must determine whether the challenged conduct involves an

element of judgment or choice. Id. (citing Berkovitz v. United States, 486 U.S.

531, 536 (1988)). The element of judgment or choice is removed where a federal

statute, regulation, or policy specifically prescribes a particular course of conduct.

United States v. Gaubert, 499 U.S. 315, 322-23 (1991).

If the challenged action is discretionary, then prong two requires the trial

court to determine “whether the challenged action is of the type Congress meant

to protect -- i.e., whether the action involves a decision susceptible to social,

economic, or political policy analysis.” Whisnant v. United States, 400 F.3d 1177,

1181 (9th Cir. 2005); see also Gaubert, 499 U.S. at 322-23. The “focus of the

inquiry is not on the agent’s subjective intent in exercising the discretion

conferred by statute or regulation, but on the nature of the actions taken and on

whether they are susceptible to policy analysis.” Gaubert, 499 U.S. at 325.

“[T]he distinction between protected and unprotected decisions can be

difficult to apprehend.” Soldano v. United States, 453 F.3d 1140, 1145 (9th Cir.

2006). But the Court of Appeals has delineated a crucial distinction between

designing a statute, policy, or regulation, which is immune, and implementing a

statute, policy, or regulation, which is not. Soldano, 453 F.3d at 1144-46. In

Soldano, for example, this Court held that designing a road without warning signs



was a policy decision, but the Park Service’s decision to set the speed limit “was

circumscribed by objective safety criteria and was not the result of a policy

decision of the kind protected by the discretionary function exception.” Id. at

1147. And this Court has often held that governmental acts taken to implement

safety regulations are not of the kind that are “susceptible to policy analysis.”

Bailey v. United States, 623 F.3d 855, 861 (9th Cir. 2010); Whisnant, 400 F.3d at

1181-82 (discussed infra); Bear Medicine, 241 F.3d at 1215 (“The decision to

adopt safety precautions may be based in policy considerations, but the

implementation of those precautions is not”); Bolt v. United States, 509 F.3d

1028, 1033 (9th Cir. 2007) (failing to comply with routine snow-removal safety

policy is not “the type of decision-making that the discretionary function

[exception] was designed to protect”); ARA Leisure, 831 F.2d at 195 (while initial

road design might be immune policy-based decision, Park Service’s failure to

maintain safe roads is not immune).

In Indian Towing, the Coast Guard’s negligent operation of a lighthouse

caused a shipping accident. Indian Towing Co., 350 U.S. at 62. The Supreme

Court rejected the government’s invocation of the discretionary function exception

and held that the Government’s decision to build a lighthouse might be protected

from tort, but the manner in which it operated the lighthouse was not. Indian

Towing, 350 U.S. at 69 (“The Coast Guard need not undertake the lighthouse

service. But once it exercised its discretion to operate a light ... then the Coast



Guard was further obligated to use due care ... to repair the light or give warning

that it was not functioning.”).

Similarly, in Bear Medicine, the Ninth Circuit distinguished between “the

decision to take safety measures” from “the negligent implementation of those

measures.” 241 F.3d at 1212. In that case, the Ninth Circuit analyzed whether the

Government’s failure to supervise a logging operation by a private timber

company gave rise to a claim against the BIA under the FTCA. Id. The Ninth

Circuit acknowledged that granting the logging contract was a protected

discretionary choice, but rejected the argument that the failure to supervise the

timber operation, which the contract required, could be considered a policy

choice. Id. at 1215 (“Even if the BIA did have discretion in its monitoring of the

[logging] operation, its actions in carrying out its responsibilities were not

protected policy judgments and therefore fail to satisfy the second prong of the

discretionary function analysis.”).

The dispositive factor in both Indian Towing and Bear Medicine was the

fact that the Government had agreed to take on certain duties and then failed to

perform those duties. Similarly, in this case, Plaintiffs’ claims arise out of the

government’s contractual agreement to take on certain duties, and its breaches of

those duties. Central to Plaintiffs’ claims are the obligations the Defendants took

on by entering into the Contract, as well as prior treaties, with the Crow Tribe.

Pursuant to the foregoing authority, while the decision to enter into treaties



and the Contract with the Crow Tribe may have been protected decisions under

the discretionary function exception, Defendants’ negligent violations of those

obligations were not protected policy judgments and therefore fail to satisfy the

second prong of the discretionary function analysis. Defendants actions in

negligently preparing the AOTR did not “involve[] a decision susceptible to

social, economic, or political policy analysis.” Whisnant, 400 F.3d at 1181; see

ARA Leisure Servs., 831 F.2d at 196 (discretionary function exception immunizes

highlevel policy decisions only); Dalehite, 346 U.S. at 27-28 (same). To the

contrary, Plaintiffs’ claims that Defendants breached various legal obligations by

acting negligently in connection with the AOTR are “garden-variety” torts for

which the discretionary function exception provides no immunity. ARA Leisure

Servs., 831 F.2d at 196. Therefore, as in Indian Towing and Bear Medicine, the

discretionary function exception does not apply here and Plaintiffs are entitled to

have their claims adjudicated on the merits.

B. PLAINTIFFS HAVE ASSERTED A COGNIZABLE BIVENS CLAIM.

Plaintiffs have alleged that Defendants “retaliated against them for th[eir]

exercise of their First Amendment rights, causing economic harm, damage to

reputation and emotional damages.” (Dkt. 4 at 24-25). In support of this claim,

Plaintiffs allege that the AOTR contained egregious errors made intentionally to

harm plaintiffs, and that these intentional errors caused harm including improper

termination from the Tribal Court. (Dkt. 4 at 25). Plaintiffs alleged also that this



improper conduct deprived Plaintiffs of their procedural due process under the

Fifth Amendment to the United States Constitution. (Dkt. 4 at 25). Consequently,

Plaintiffs have asserted a claim against Reyes and Cree in their individual

capacities pursuant to Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971).

(Dkt. 4 at 24-25).

Defendants have moved to dismiss Plaintiffs’ Bivens claim, relying

primarily upon the recent Supreme Court decision in Ziglar v. Abbasi, 137 S. Ct.

1843, 1857 (2017). (Dkt. 14 at 14-17).2 However, the Ninth Circuit has recently

interpreted and applied Abbasi to a Bivens claim substantially similar to that

presented here and allowed that claim to proceed. See Lanuza v. Love, 899 F.3d

1019, 1026 (9th Cir. 2018). The Court of Appeals held that the district court’s

dismissal of the Bivens claim was in error, holding “while Abbasi clearly limited

Bivens’s scope, it did not preclude this case; nor is this case precluded by other

Supreme Court precedent.” Id. Because Plaintiffs’ Bivens claim here is materially

similar to that permitted in Lanuza, dismissal would likewise constitute error.

A Bivens claim is a private action against federal officials in their individual

capacities for alleged violations of a plaintiff’s constitutional rights. Adams v.

Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004). Courts have allowed Bivens

2 Page number references to Defendants’ Motion to Dismiss refer to numbers on

the document, not the ECF stamp.



remedies for a range of constitutional violations by law enforcement, including

violations of the Fifth Amendment’s Due Process Clause,3 and the First

Amendment’s speech protections.4 In particular, courts have long allowed Bivens

actions alleging that law enforcement acted based on illegal motives, including

discrimination and retaliation in violation of the First Amendment.5

3 See, e.g., DiMartini v. Ferrin, 889 F.2d 922 (9th Cir. 1989), amended on pet. for

rehearing en banc, 906 F.2d 465, 466 (9th Cir. 1990) (Bivens due process claim against FBI agent who allegedly had plaintiff fired from private job for not cooperating with investigation).

4 See, e.g., Dellums v. Powell, 566 F.2d 167, 194-95 (D.C. Cir. 1977) (First Amendment Bivens claim alleging federal officers prevented plaintiffs from protesting war); Paton v. La Prade, 524 F.2d 862, 869–70 (3d Cir. 1975) (First Amendment Bivens claim that FBI agents conducted unlawful surveillance of political correspondence).

5 See Gibson v. United States, 781 F.2d 1334, 1342 (9th Cir. 1986) (First Amendment Bivens claim against FBI agents who allegedly sought to discourage political activities by wiretapping telephone, passing defamatory information to employers, and seeking to entrap plaintiff); Hartman v. Moore, 547 U.S. 250, 256 (2006) (stating First Amendment retaliation claim “on the authority of Bivens”). Following Gibson, the Ninth Circuit has repeatedly entertained Bivens challenges to law enforcement investigations as retaliation for protected First Amendment speech. See, e.g., Moss v. Secret Service, 572 F.3d 962, 967 n.4 (9th Cir. 2009) (First Amendment Bivens claim against secret service’s relocation of protest critical of the president), overruled on other grounds in Wood v. Moss, 134 S. Ct. 2056, 2066 (2014) (“assum[ing] without deciding that Bivens extends to First Amendment claims” and reversing on qualified immunity); Mendocino Envtl. Ctr. v. Mendocino Cnty., 14 F.3d 457, 461-64 (9th Cir. 1994) (First Amendment Bivens claims against FBI officers for chilling speech through unlawful arrests, release of false accusations, and interrogation of associates); Erickson v. United States, 976 F.2d 1299, 1301 (9th Cir. 1992).



In Abbasi, the Supreme Court addressed Bivens claims implicating foreign

policy and national security issues after the September 11, 2001 terrorist attacks.

Abbasi, 137 S. Ct. 1843. The Court found that, because the case would require the

judiciary to review national security policy, it should refrain from entering a

sphere more properly suited to the Executive and Legislative branches. Id. at

1861. The Abassi Court distinguished cases involving broad policy concerns from

cases such as this in which individuals are seeking to vindicate specific

constitutional violations. Abassi, 137 S. Ct. at 1862.

In Lanuza, the Ninth Circuit Court of Appeals directly confronted the

import of Abassi, beginning with the question “where does Bivens stand?” in the

wake of that decision. 899 F.3d at 1021. Lanuza addressed a situation in which a

U.S. Immigration and Customs Enforcement (ICE) Assistant Chief Counsel

representing the government intentionally forged and submitted an ostensible

government document in an immigration proceeding, which had the effect of

barring the plaintiff from obtaining lawful permanent resident status. Id.

The Court of Appeals noted that no case precluded extension of Bivens to

the circumstances presented, namely, the falsification of evidence. Id. at 1025-27.

The Court observed that the falsification of evidence “has been regularly

considered by the courts in actions against prosecutors who commit similar

constitutional violations by falsifying evidence and suborning perjury.” Id. at

1025-26 (“‘[t]he principle that a State may not knowingly use false evidence ... to



obtain a tainted conviction [is] implicit in any concept of ordered liberty,’ and a

violation of due process.”). The Court therefore held that “[w]hile the Supreme

Court has not extended Bivens to a case involving the substantive and procedural

clauses of the Fifth Amendment, Abbasi did not preclude the possibility of such

an extension.” Id. (citing Abbasi, 137 S.Ct. at 1860–64).

Plaintiffs’ Bivens claim in the above-captioned matter is analogous to that at

issue in Lanuza. As in Lanuza, Plaintiffs’ Bivens claim here is premised upon

Defendants presentation of false evidence in the AOTR, which not only violated

Plaintiffs’ Fifth Amendment due process rights, but also constituted retaliation for

Plaintiffs’ exercise of their First Amendment rights. Like the claim in Lanuza, the

analysis must therefore proceed to the established two-part test, looking to

whether the plaintiff is seeking a Bivens remedy in a new context and, if so,

whether “special factors counsel[] hesitation.” Id. at 1023 (citing Abbasi, 137

S.Ct. at 1853-60).

The Court in Lanuza determined that the claim arose in a new context, as

the claim was “different in a meaningful way from previous Bivens cases decided

by [the Supreme Court].” Id. at 1023. Under this standard, it is submitted that

Plaintiffs’ claim does not arise in a new context because it is not different in a

meaningful way from the issue decided in Lanuza. To the extent the claim here is

determined to arise in a new context, Bivens must nonetheless be extended to

cover the claim for the same reasons it was extended in Lanuza.



In Lanuza, applying principles announced in Abbasi, the Court found there

were “no ‘special factors’ suggesting Bivens remedies should be unavailable.” Id.

at 1028. It evaluated the relevant special factors and concluded none militated

against extending Bivens because (1) the attorney sued was a “low-level” federal

officer; (2) the plaintiff did not “challenge or seek to alter the policy of the

political branches” because the government does not have a policy of allowing

federal officers to submit forged documents in immigration proceedings; (3) the

suit would not overly burden the Executive branch given that the case concerned

only the actions of a single low-level federal officer; (4) litigation would not

reveal sensitive information; (5) the case did not garner any executive or

congressional attention, and Congress did not indicate intent to abstain from

creating a remedy; and (6) there was no adequate remedial scheme available to the

plaintiff to challenge the harm caused by the forged document if the forgery went

undiscovered because “[t]he system does not account for actions designed to

circumvent it.” Id. at 1028-32.

Finally, the Court of Appeals addressed “‘whether the Judiciary is well

suited, absent congressional action or instruction, to consider and weigh the costs

and benefits of allowing a damages action to proceed.’” Id. at 1032 (quoting

Abbasi, 137 S.Ct. at 1858). It answered this question in the affirmative because:

[w]hether the evidence was falsified, and whether it was submitted willfully, and whether the submission of that evidence deprived



Lanuza of his right to due process, have definite answers, and we have “established methods” to come to these conclusions.

Id. at 1033.

All of the reasons for extending Bivens to the circumstances in Lanuza apply

here with equal weight. As in Lanuza, the claim here alleges that low-level officers

harmed the plaintiffs by falsifying evidence. There is no reason to distinguish the

contract administration context here from the immigration context in Lanuza.

Like the attorney in Lanuza, Reyes and Cree are “low-level” federal officers.

Seeking damages for improper retaliatory false accusations leveled by low-level

officers does not challenge or seek to alter the policy of the political branches, as

the government does not have a policy of including false accusations in AOTRs to

retaliate against tribal officials and usurp tribal sovereignty. The suit would not

overly burden the Executive Branch, as it involves isolated misconduct from two

low-level officers. Litigation would not reveal sensitive government information.

The case has not garnered executive or legislative attention, and there is no reason

to believe Congress intended to protect individual federal officers from liability for

submitting false reports. There is no adequate remedial statutory scheme available

for Plaintiffs to seek recourse, as Reyes and Cree’s false report circumvents any

recourse that may have been available. Finally, as in Lanuza, the judiciary is well-

equipped to determine whether the content of the AOTR was falsified, whether it



was submitted willfully, and whether the submission of the AOTR deprived

Plaintiffs of their rights to due process and free speech. Lanuza, 899 F.3d at 1033.

With respect to the “special factors” analysis, the two cases cannot be

meaningfully distinguished. As in Lanuza, the Plaintiffs here have made a

facially adequate Bivens claim, and dismissal of the claim would be improper.

C. THE INDIVIDUAL DEFENDANTS ARE NOT ENTITLED TO QUALIFIED IMMUNITY.

Defendants’ arguments that they are entitled to qualified immunity on

Plaintiffs’ claims are meritless. Although “[d]amages actions against high

officials are… an important means of vindicating constitutional guarantees,”

Harlow v. Fitzgerald, 457 U.S. 800, 809 (1982) (quotations omitted), a

government official defendant may obtain qualified immunity if: (1) taken in the

light most favorable to plaintiff, the official’s conduct did not “violate[] a

constitutional right;” or (2) “[t]he contours of the right [were not] sufficiently

clear that a reasonable official would understand that what he is doing violates

that right.” Saucier v. Katz, 533 U.S. 194, 201–02 (2001). Qualified immunity is

not meant to protect those who are “plainly incompetent or those who knowingly

violate the law.” Taylor v. Barkes, 135 S.Ct. 2042, 2044 (2015) (quoting

Ashcroft v. al-Kidd, 563 U.S. 731, 743 (2011)). The “touchstone” of the qualified

immunity analysis is reasonableness. Anderson v. Creighton, 483 U.S. 635, 639

(1987).



In Lanuza, the Court of Appeals held there was no qualified immunity for

an official who falsifies documents in immigration proceedings. Lanuza, 899 F.3d

at 1034. For the same reasons, Reyes and Cree cannot assert qualified immunity

against allegations that they conducted a woefully insufficient investigation and

then made false accusations in the AOTR with the purpose and intent of retaliating

against Plaintiffs for criticizing the BIA’s failure to protect children in its care,

having perceived adversaries removed from tribal government, and influencing

the outcome of tribal legislative processes. No reasonable federal official could

have believed that such conduct was lawful or constitutional. The doctrine of

qualified immunity does not apply in this case.

D. PLAINTIFFS STATE A CLAIM FOR THEIR NEGLIGENCE-BASED CLAIMS.

1. Plaintiffs have alleged the existence of duties.

Defendants assert that Plaintiffs’ negligence claims fail because Plaintiffs

“identify no specific duty owed to them that would give rise to a cause of action

for damages.” (Dkt. 14 at 18). This argument is without merit. Plaintiffs

specifically allege duties arising from treaties, the Contract, and the common

law.

First, Defendants owed Plaintiff a general duty of care under the FTCA.

Also, The Contract provides for “routine monitoring visit[s]” and reaffirms the

trust responsibility owed to the Crow Tribe. (Dkt. 4, Ex. A at 9-10).



Additionally, every contract, regardless of type, contains an implied covenant of

good faith and fair dealing.” Story v. Bozeman, 791 P.2d 767, 775 (1990),

overruled on other grounds, Arrowhead Sch. Dist. No. 75 v. Klyap, 79 P.3d 250

(Mont. 2003). A covenant of good faith requires “honesty in fact and the

observance of reasonable commercial standards of fair dealing in the trade.”

Mont. Code Ann. § 28-1-211. As discussed above, the Constitution prohibits the

government from unreasonably interfering with free speech and imposes on the

government a duty to employ due process. U.S. Const. Amend. I, V.

On top of these duties, the federal government possesses a “distinctive

obligation of trust” in its dealings with Indian people. Seminole Nation v. United

States, 316 U.S. 286, 297 (1942). The United States’ fiduciary responsibilities

toward Indian Tribes applies to actions of the federal government. Nance v.

E.P.A., 645 F.2d 701, 711 (9th Cir. 1981). Nonetheless, Defendants assert this

obligation “without more, [] does not create a cause of action for breach of a

fiduciary duty that would entitle Plaintiffs to monetary damages.” (Dkt. 14 at 18

(quoting Tsosie ex rel. Estate of Tsosie v. U.S., 441 F. Supp. 2d 1100, 1105

(D.N.M. 2004)).

Defendants fail to recognize that, in this case, there is “more”. There is the

Contract, the implied covenant of good faith and fair dealing, the FTCA, and the

United States Constitution. For reasons discussed throughout this brief and as

alleged in the Complaint, these contractual, common law, statutory, and



constitutional obligations imposed on Defendants a duty to conduct their review

and prepare the AOTR in good faith. Plaintiffs have also alleged a common law

and constitutional duty to refrain from retaliating against Plaintiffs for criticizing

the BIA’s failure to protect children in its care, having perceived adversaries

removed from tribal government, and influencing the outcome of tribal legislative

processes. This duty is clearly alleged in the Complaint, and Defendants’ assertion

that Plaintiffs have failed to allege a duty are without merit.

With respect to the duties alleged in the Complaint that arise from the

Contract, Plaintiffs also have standing to assert breach of the obligations created

thereby as agents of the signatory, the Crow Tribe, at the time of executing the

Contract. See Westra v. Marcus, 129 Cal. App. 4th 759, 767 (Cal. Ct. App. 2005)

(holding agent of signatory to agreement had standing to compel other signatory

to arbitration); Peeler v. Rocky Mountain Log Homes Can., Inc., 431 P.3d 911

(Mont. 2018) (citing Westra with approval).

2. Plaintiffs have alleged breaches of the duties alleged.

Defendants argue Plaintiffs have failed to allege breach of a duty because

“the Report findings were accurate both legally and factually.” (Dkt. 14 at 19).

This argument wholly disregards the controlling standards at the motion to dismiss

stage of the proceedings. See Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 570.

Plaintiffs have alleged the Report findings were neither legally nor factually

correct. (Dkt. 4). In fact, Plaintiffs have alleged the falsity of the AOTR in detail



(dkt. 4 at 10-22), and those allegations must be taken as true at this stage.

Disregarding the controlling standards, Defendants assert “Plaintiffs can

only plausibly allege that the Report findings regarding loans to Tribal Court

employees led to Plaintiffs’ terminations.” (Dkt. 14 at 30). However, as alleged in

the Complaint, all the accusations levelled against Plaintiffs caused economic

harm, damage to reputation, and emotional damages. That the Ethics Board

ultimately relied on the loans only is of no moment – as alleged in the Complaint,

the entire AOTR constituted an attack on Plaintiffs’ character that led to their

termination.

Defendants further argue the loans, even if justified by circumstances, were

unlawful, citing the Ethics Board’s conclusion to that effect. (Dkt. 14 at 20).

However, Plaintiffs have argued that the Ethics Board proceeding was

contaminated by Defendants’ actions from the outset. (Dkt. 4 at 22-24). The

proceeding was commenced when Defendants told the Chairman and Vice-

Chairman to have Plaintiffs terminated, or else have the Contract cancelled. (Dkt. 4

at 22). Then the petition filed for that purpose recited the false allegations in the

AOTR and listed the individual Defendants as witnesses. (Dkt. 4 at 22). To cite the

Ethics Board conclusions as dispositive under these circumstances is circular,

seeking to exonerate Defendants on the ground that they prevailed in their plot.

This argument cannot be accepted at this stage in the proceedings. See Iqbal, 556

U.S. at 678; Twombly, 550 U.S. at 570.



The Defendants further argue the Tribal Court was required to work with the

Executive Branch to ensure Contract requirements were met. However, Plaintiffs

have alleged they did work with the Executive Branch, alleging that there was no

concealment of the account at issue, that “[t]he Court Administrator communicated

on a regular basis with BIA AOTR, Crow Tribal Finance, the Crow Tribal

Chairman, and the Chief Judge” regarding Tribal Court finances in general, and

that Crow Tribal Finance was specifically notified of the account at issue in a

November 16, 2016 memorandum. (Dkt. 4 at 11-12). Again in contradiction to the

controlling standards, Defendants ask the Court to misconstrue the plain

allegations in Plaintiffs’ Complaint as assertions that the Tribal Court had “carte

blanche” to track and administer funds independently. (Dkt. 14 at 22). This is

simply not an accurate representation of the contents of the Complaint. (Dkt. 4 at

11-12).

Defendants argue that Plaintiffs misconstrue the findings and “provide post-

hoc justifications for the deficiencies” asserted in the AOTR. (Dkt. 14 at 22-23).

This argument again mischaracterizes the Complaint. Plaintiffs argued that, not

only are the factual assertions inaccurate, but the entire review process was

“woefully inadequate” and Cree and Reyes “failed to seek or consider

documentary evidence and controlling law” that would have contradicted their

findings. (Dkt. 4 at 5). Plaintiffs do not rely on post-hoc justifications. They

specifically allege that a competent investigation would have revealed exonerating



evidence had such an investigation been conducted. The failure to conduct such an

investigation is at the root of Plaintiffs’ claims. Defendants’ argument that “the

BIA did not make any misrepresentation of fact or opinion, but made accurate

observations consistent with laws and fact” is an argument to be made to the jury,

not one to be determined on a Fed. R. Civ. P. 12(b)(6) motion. (Dkt. 14 at 23).

3. Plaintiffs have alleged causation.

Plaintiffs have specifically alleged that Defendants’ actions caused their

injuries. Nonetheless, Defendants argue Plaintiffs have failed to plead causation

because they do not allege that Reyes or Cree were involved in the meeting with

the Chairman and Vice-Chairman, and they do allege that an intervening action,

the filing of the petition with the Ethics Board, in fact caused Plaintiffs’ alleged

injuries. (Dkt. 14 at 23-25). This argument is flawed.

First, it ignores the fact that the United States is a named Defendant in this

action. Whether Reyes, Crees, or some other agent was present at the meeting is

immaterial – clearly a United States agent was there. Furthermore, it is clearly

alleged that the meeting was prompted by the AOTR, and the AOTR was used to

bring about Not Afraid’s termination.

Furthermore, Defendants misapply basic causation principles. The issue is

not whether an intervening event caused Plaintiffs’ injury. Rather, the issue is

whether an unforeseeable intervening event caused Plaintiffs’ injury. The Ninth

Circuit has held in analogous circumstances that the requisite causal chain can



occur through the “setting in motion [of] a series of acts by others which the actor

knows or reasonably should know would cause others to inflict the constitutional

injury.” Harris v. Roderick, 126 F.3d 1189, 1196 (9th Cir.1997)Similarly, the

Montana Supreme Court has held “[f]oreseeable actions do not break the chain of

causation.” Covey v. Brishka, 445 P.3d 785 (Mont. 2019).

Plaintiffs alleged that, in preparing the AOTR, Defendants “acted with

intent to cause Plaintiffs ultimately to lose their positions in Tribal Court”, and

that Plaintiffs’ termination “was the direct result of the aforementioned

machinations”, referencing Defendants actions in conducting an inadequate

review, making false accusations in the AOTR, and sending agents to meet with

the Chairman to pressure him to seek Plaintiffs’ termination. (Dkt. 4 at 25). Far

from being unforeseeable, Plaintiffs’ allege that their termination was a

motivating force behind Defendants’ actions from the outset. Because Plaintiffs’

termination was a foreseeable result of Defendants’ actions, and Defendants’

actions commenced a chain of causation leading to Plaintiffs’ termination, the

causation element has been adequately pled. Defendants’ argument to the contrary

improperly asks the Court to treat Plaintiffs’ allegations as untrue and draw all

inferences against Plaintiffs.

E. PLAINTIFFS HAVE ADEQUATELY ALLEGED CONSTRUCTIVE FRAUD AND BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING.

Defendants’ attacks on Plaintiffs’ claims for constructive fraud and breach



of the implied covenant of good faith and fair dealing are premised largely on the

incorrect assertions discussed hereinabove. (Dkt. 14 at 25-27). As set forth above,

Plaintiffs have alleged the existence of duties owed to them personally, and thus

can and do make out a prima facie case of constructive fraud.

Additionally, contrary to Defendants’ assertions, Plaintiffs are not required

to allege personal reliance in order to make out a claim for constructive fraud. See

Bixby v. KBR, Inc., 893 F. Supp. 2d 1067, 1087 (D. Or. 2012). In Bixby, members

of the Oregon National Guard were injured when other military officials’ relied

upon misrepresentations from a private company about the hazards posed by

sodium dichromate. Id. That court rejected an argument similar to that made by

Defendants here, holding that the plaintiffs adequately pled reliance by alleging

that they were foreseeably harmed by the defendant’s fraudulent representations

to other agents of the same entity, i.e. the National Guard, regardless of the fact

that they did not personally rely on any misrepresentations. Id. Likewise,

Plaintiffs here have alleged they were injured by Defendants’ misrepresentations

to other members of the Crow Tribal Government. Pursuant to Bixby, this satisfies

the reliance element at the pleading stage, regardless of the fact that Plaintiffs did

not personally rely on the misrepresentations.

Finally, Defendants argue for dismissal of Plaintiffs’ claim for breach of the

implied covenant because Plaintiffs have failed to allege a contractual relationship

with Defendants. (Dkt. 14 at 26-27). As set forth above, Plaintiffs have adequately



pleaded breach of the implied covenant of good faith and fair dealing by alleging

they were agents of a signatory at the time of the breach. See Westra, 129 Cal.

App. 4th at 767; Peeler, 431 P.3d 911.

CONCLUSION

For the foregoing reasons, Plaintiffs respectfully requests that the Court deny

Defendants’ motion to dismiss. Alternatively, Plaintiffs request leave to amend in

the event the Court deems Defendants’ arguments for dismissal to have merit.

Dated this 17th day of January 2020.

Respectfully submitted,

/s/ Terryl T. Matt

MATT LAW OFFICE Terryl T. Matt, Esq. 310 East Main Cut Bank, MT 59427 Telephone: (406) 873-4833 Fax No.: (406) 873-4944 [email protected]



CERTIFICATE OF COMPLIANCE

Pursuant to D. Mont. L.R. 7.1(d)(2), I certify that:

This brief complies with the type-volume limitation of D. Mont. L.R.

7.1(d)(2) because this brief contains 6,438 words, excluding the parts of the brief

exempted by D. Mont. L.R. 7.1(d)(2)(E).

This brief has been prepared in a proportionately spaced typeface using

Microsoft Word Times New Roman 14-point font.

Date: January 17, 2020.

Respectfully submitted,

/s/ Terryl T. Matt




CERTIFICATE OF SERVICE

I hereby certify that the foregoing document was served upon the following

counsel of record, by ECF Electronic Filing, this 17th day of January, 2020:

VICTORIA L. FRANCIS TYSON M. LIES Assistant U.S. Attorneys U.S. Attorney’s Office 2601 2nd Ave. N., Suite 3200 Billings, MT 59101 Email: [email protected] [email protected]

/s/ Terryl T. Matt



Documents

MATT LAW OFFICE, PLLC Terryl T. Matt, Esq. 310 East Main Street · 2020. 10. 19. · MATT LAW OFFICE, PLLC Terryl T. Matt, Esq. 310 East Main Street Cut Bank, MT 59427 Telephone: