Appeal made to 8th Circ. after court rules ‘sovereign immunity’ protection from claims of racketeering, fraud

Three Affiliated Tribes citizen Laura “Lori” Bird now claims the lower court erred in dismissing her civil RICO claim based solely on sovereign immunity, meaning the tribal government can’t be sued. She now asks the Eighth Circuit Court of Appeals to revisit her case.

“The trial court abused its discretion and committed plain error by refusing to apply U.S. Supreme Court and the Eighth Circuit law that says inclusion of a mandatory arbitration clause in a contract with an Indian tribe constitutes a waiver of the tribe’s sovereign immunity,” said attorney Irv Nodland in an August brief filed with the Eighth Circuit.

The Three Affiliated Tribes Tribal Business Council argues Bird’s appeal “consists of almost entirely unsupported factual allegations that are unrelated to the narrow legal issues of sovereign immunity,” according to the tribe’s brief filed in September.

Nodland told Buffalo’s Fire his client had an arbitration clause in her joint venture agreement with the tribe and legal precedent weighed in her favor. Bird has lost previous legal attempts to recover tens of millions of dollars from the tribe in a failed business deal with the Three Affiliated Tribes Tribal Business Council and its Four Bears Economic Development Corporation.

An arbitration mediator ruled in favor of tribal sovereign immunity in December 2020. Bird, owner of Bird Industries, then filed her federal suit against the tribe in October 2021. Her allegations against the tribe include a civil RICO claim as well as theft, fraud and sale of her equipment. Now comes her appeal to the Eighth Circuit.

“I am appealing because the judge’s dismissal is saying that the law allows tribal officials to use sovereign immunity as a cover,” Bird told Buffalo’s Fire. She said she wants to be heard in an unbiased court. “This decision doesn’t just affect my case but the masses of Native American tribal members, Native American businesses, and businesses in general across the nation.”

Bird industries is based in Brookings, S.D. Bird entered her business into a joint venture agreement with the Three Affiliated Tribes Four Bears Segment on April 22, 2015. She provided money and equipment, in addition to management and manufacturing skills related to gravel and concrete products.

The court acknowledged the Tribal Business Council’s “responsibility for all actions taken on behalf of the tribe, including actions made by officers, arms, segments, employees, department managers, commissions, entities, and sub-entities.”

As part of the joint venture, the tribe and Bird Industries did business as Lakeview Aggregates, a North Dakota limited liability company. The agreement provided a net income split in which Bird Industries would receive 40 percent of gravel, or aggregate sales, and 49 percent of the net income of concrete or ready-mix sales.

The business was operational in June 2015. “In the following months, the Tribal Business Council defaulted on its agreement to contribute 50 percent toward the cost of goods and services for the project,” according to the July court order. In response, Bird Industries advanced $3,007,888.98 to cover the cost of goods and services for the project.

Meanwhile, “the Tribal Business Council, in the belief that Bird mismanaged the project, advised Bird Industries that it was being removed from all day-to-day activities of the aggregate and ready-mix operation,” wrote Hovland. “The Tribal Business Council demanded that Bird Industries sell its interest in the joint venture.”

Hovland continued: “In the course of the buyout negotiations, the Tribal Business Council provided Bird Industries with information concerning the project’s past income and expenses which Bird Industries contends were misleading.”

After Bird Industries sold its interest in the project – Bird describes it as a forced buyout — a company from Texas, Focus Energy, was hired to do marketing and perform some management functions for the Lakeview Aggregates and ready-mix operation. The gravel and concrete business was based in New Town, N.D. and located across the highway from the Four Bears Casino.

After Bird Industries no longer worked on site, an employee familiar with the operation talked to Bird.

Brandon Bentley, who worked for Focus Energy and CIG Resources, informed Bird in October 2018 that “the Tribal Business Council had established numerous bank accounts in North Dakota, Texas, and other states to enable it to hide millions of dollars in income from the sale of aggregate and ready-mix owed to Bird and make disbursements to persons who were not so entitled,” according to the July court order.

“Bentley told Bird that councilman Frank Grady and Jolene Lockwood had conspired to get Laura Bird and Bird Industries removed from the project in order to gain control over the project’s funds and assets,” wrote Hovland.

In an April 2019 phone recording Bird thanked Bentley for the information “If it weren’t for you guys giving me the bank statements, I’d still be sitting here. Like. What?”

Bentley replied: “You know, I would have done that regardless Lori. That’s just the right thing.”

Buffalo’s Fire reached out to Bentley for an interview on Jan. 2, 2020. He was fatally shot in a truck in downtown St. Louis the next day. His body was pushed onto the street. The St. Louis Homicide Division confirmed last week the murder case is still open. It is not known who shot Bentley, or why.

Kirt Bailey, Bentley’s business associate, told Buffalo’s Fire that Bird and the FBI were both provided with documents and bank statements related to Lakeview Aggregates. In a separate case, former Three Affiliated Tribes Councilman Frank Grady pleaded guilty on unrelated criminal charges of bribery and kickbacks in a March plea agreement.

Bird awaits an Eighth Circuit decision in her case. She said she’s tried to work with the tribe to reach a fair settlement. Those efforts failed. She believes tribal sovereign immunity should not be used as a weapon against the tribe’s citizens. In a move to protect sovereign immunity, the tribe now employs three law firms to fight Bird. Those firms include Robins Kaplan, Fredericks Law Firm and most recently, Bird & Bird, an international law firm with 1,400 lawyers.

“I am an enrolled member of the Three Affiliated Tribes. I am also a citizen of the United States,” said Bird. “Where do I get justice from?”