The opinion of the court was delivered by: Royce C. Lamberth, United States District Judge
Now before the Court comes defendant's motion  to stay. Upon consideration of the motion, the plaintiff's opposition, the reply, the applicable law, and the entire record herein, the Court concludes that defendant's motion will be GRANTED. The parties shall notify the Court within 10 days after the exhaustion of tribal court proceedings that are currently pending before the Seneca Nation of Indians Peacemakers Court, Allegany Territory ("Peacemakers Court"), at which time proceedings in this Court may resume.
Having concluded that a stay of the proceedings is appropriate, plaintiff's motion  for judgment on the pleadings will be DENIED, without prejudice to filing a new motion after the stay is lifted. The defendant's motion  to continue the date for opposing plaintiff's summary judgment motion will be DENIED as moot.
On November 13, 2004, the Council of the Seneca Nation of Indians ("Nation") adopted a resolution appointing Roscoe C. Howard, Jr. and the law firm of Sheppard Mullin Richter & Hampton LLP ("Sheppard Mullin") as independent counsel to review financial transactions and other issues regarding the construction, financing, management, and operation of the Nation's New York casino business. (Council Resolution, Ex. 1 to Kanji Decl.) This resolution gave Sheppard Mullin the authority to "retain qualified forensic auditors and such other consultants as the Firm may deem necessary . . . ." (Id.) Sheppard Mullin then-acting on behalf of the Nation-contracted with plaintiff LECG to provide forensic accounting and consulting services related to Sheppard Mullin's investigation. (LECG Engagement Ltr., Ex. 4 to Kanji Decl.) LECG's engagement letter stated that Sheppard Mullin and the Nation accepted LECG's "standard commercial terms," a copy of which were included in the letter. (Id. at 1.) One such term was an alternative dispute resolution clause that purported to bind the parties to arbitrate any disputes that could arise in connection with the contract. (Id. at 5.)
From late 2004 until April 2005, LECG provided services under its contract for which the Nation issued checks totaling approximately $270,000. (Ex. 11 to Kanji Decl.) In April 2005, LECG issued a report summarizing the results of its investigation. This report contained errors which Sheppard Mullin considered "clerical" but which Seneca determined were "beyond significant." (Ex. 12 and 14 to Kanji Decl.) Following this incident, the Nation ceased paying LECG's invoices as they became due.
On October 27, 2005, LECG demanded arbitration before Judicial Arbitration & Mediation Services, Inc. ("JAMS") seeking payment of $815,508.62 in outstanding invoices.
(Ex. 15 to Kanji Decl.) Citing the Nation's sovereign immunity, its Department of Justice does not recognize JAMS's jurisdiction over this dispute. (Porter Ltr., Ex. 17 to Kanji Decl.) The Nation asserts that to waive sovereign immunity, it must expressly do so, and that Sheppard Mullin did not have the authority to unilaterally waive the Nation's sovereign immunity. Consequently, on January 23, 2006, the Nation filed suit against JAMS and LECG in Peacemakers Court seeking to enjoin arbitration proceedings against the Nation based upon its assertion of sovereign immunity. (Peacemakers Court Compl., Ex. 21 to Kanji Decl.) LECG has not appeared in the Peacemakers Court proceedings.
On July 24, 2006, LECG filed suit in this Court seeking declaratory judgment that the Nation waived its sovereign immunity and is subject to arbitration as specified in LECG's engagement letter. (Amended Compl. at 8--9.) The Nation has expressly waived its sovereign immunity for the limited purposes of resolving the claims specified in LECG's complaint filed in this Court. (Answer at 10--11.)
Citing the parallel Peacemakers Court proceedings, on October 3, 2006, LECG filed a motion  to stay proceedings in this Court pending the exhaustion of proceedings in the Nation's court system. On September 14, 2007, the Peacemakers Court ruled that it had jurisdiction over the dispute and scheduled a status conference for November 19th for the purpose of "scheduling further proceedings, including discovery, if any, dispositive motions and the trial of this action." (Peacemakers Court Findings of Fact and Conclusions of Law, Sept. 14, 2007.) No appellate proceedings have occurred in the Nation's three-tiered court system. See Kirkpatrick v. Kirkpatrick, 282 F. Supp. 2d 613, 614 (N.D. Ohio 2003) (indicating that the Nation's court system consists of three levels: the Peacemaker's Court, the Seneca Nation of Indians Court of Appeals, and the Seneca Nation Supreme Appellate Court).
1. Tribal Exhaustion Doctrine
The tribal exhaustion doctrine governs federal cases filed by parties when parallel proceedings are pending in Indian tribe courts. See Nat'l Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845 (1985). In National Farmers, an Indian tribe member sued a state school district in tribal court regarding injury claims stemming from a motorcycle accident. Id. at 847. The school district did not file an answer in tribal court, which caused default judgment to be entered in favor of the tribe member. Id. at 847--48. The school then filed a motion for a temporary restraining order in federal district court. Id. at 848. The Supreme Court held that "[u]ntil petitioners have exhausted the remedies available to them in the Tribal Court system, it would be premature for a federal court to consider any relief." Id. at 857. Several factors support requiring "the federal court [to stay] its hand" by not addressing the "merits or any question concerning appropriate relief" until "after the Tribal Court has had a full opportunity to determine its own jurisdiction and to rectify ...