F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

P A U M A B A N D O F L U I S E

N O M I S S I O

N I N D I A N S O F T H E P A

U M A & Y U I M

A R E S E R V A T I O N , AKA Pauma B and of Mission I ndians, AKA Pauma L u iseno B and of Mission I n dians,

Plaintiff-Appellee/ Cross-Appellant

,

v

.

S T A T E O F C A L I F O R

N I A ; C A L I F O R

N I A G A M B L I N G C O N T R

O L C O M M I S S I O N , an ag ency of the State of California; E D M U N D G. B R

O W N , J R

. , as Governor of the State of California,

Defendants-Appellants/ Cross-Appellees

. Nos. 14-56104 14-56105

D .C. Nos. 3:09-cv-01955- CAB -MDD 3:09-cv-01955- CAB -MDD

ORDER AND AMENDED OPI NI ON

A ppeal from the United States District Court for the Southern District of California Cathy Ann B enciveng o, District J u dg e, Presiding

Arg ued and Submitted J uly 10, 2015—San F rancisco, California

F iled October 26, 2015 Amended December 18, 2015P A U M A V

. S T A T E O F C A L I F O R N I A 2

B efore: Mary

M. Schroeder and Richard C. Tallman, Circuit J udg es, and J ohn A. J arvey , * Chief District J udg e.

O pinion by

J udg e Tallman; Dissent by

Chief District J udg e J arvey

SUMMARY * *

Indian Law

The panel filed ( 1 ) an order a mending its opinion a nd dissent and deny ing peti t ions f or panel rehearing a

nd rehearing e n banc, and (2) an amended opinion and dissent in an action concerning

a Tribal-State Gaming

Compact.

I n its amended opinion, the p anel affirmed the distr i ct court’s summary

judg ment and held that the Pauma B and of L u iseno Mission I n dians was entitled to rescission of t h e 2004 Amendment to the 1999 T ribal-State Compact
g overning operation of Class I I I
, or casino-sty l e , gaming on Pauma’s land.

The panel held that the interpretation of a Compact l i c ense pool provision in Cachil Dehe Band o f W intu n Indi a n s of the Colusa Indian Cmty. v. Cal.

, 618 F .3d 1066 (9th Cir. 2010), applied, such t h a t the State of California

* T h e Ho n o rab le J oh n A

. Jarv ey , Ch ief Un ited States District J u dg e f or th e So u t h ern District o f

Io w a, sittin g b y

d esig n atio n

.

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.P A U M A V

. S T A T E O F C A L I F O R N I A 3

would be deemed to have misrepresented a material fact as to how many g aming licenses were available when neg otiating with Pauma to amend its Compact. The panel h e l d that, unlike a chang e in judicial interpretation of a st a t u t e o r law, the doctrine of retroactivity does n ot apply to contracts. Once there has been a f

inal judicial interpretation of an ambig uous contract provision, t h a t is and has alway s been the correct interpretation from the document’s inception. The panel h eld that the district court properly g ranted summary judg ment on Pauma’s misrepresentation claim.

The panel held that the district court awarded the proper remedy to Pauma by refunding $36

. 2 m illion in

o v erpay ments, even thoug h the district court mislabeled t h e remedy as specific performance, r ather than r escission a nd restitution for a voidable c o n t r act. The panel held that this equitable remedy

fell within the State’s limited waiver of its sovereig n immunity in the Compacts, a nd thus w as not barred by the Eleventh Amendment.

On c ross-appeal, t h e p anel held that Pauma was not entitled to seek redress under the I ndian Gaming Reg ulatory Act b ecause the State and Pauma a ctually r e a c h ed a g aming Compact.

Dissenting

, Chief District J udg e J a rvey wr o t e t h at the State did n ot commit t h e t ort o f misrepresentation b y interpreting the Compact differe n tly than a later court decision. H e also wrote that, under the lang u ag e of the Compact, the State did not waive its sovereig n immunity with respect to this claim.P A U M A V

. S T A T E O F C A L I F O R N I A 4

COUNSEL

Teresa Michelle L a ird (arg ued), D eputy Attorney G e neral; Kamala D. Harris, Attor n e y General of California; Sara J

. Drake, Senior Assistant Attorney General; Neil D. Houston, Deputy At torney General, San Dieg o, California, for Defendants-Appellants/Cross-Appellees.

Chery l A. W illiams (arg ued) and Kevin M. Cochrane, W illiams & Cochrane, L L P, San Dieg o, California, for Plaintiff-Appellee/Cross-Appellant.

ORDER

The panel has voted to a mend its p re vious o pinion a nd issues the following opinion to replace i t

. With this amendment, the panel has voted to deny the p e t itions for panel rehearing and to deny the petitions for rehearing en banc.

The full court h as been advised of the petitions for rehearing en b anc and no jud ge h a s requested a vote on whether to rehear the matter en banc. F ed. R. App. P. 35.

The p etitions for p a n e l rehearing and petitions for rehearing en banc are DENIED

. No future petitions for rehearing or p et i t ions for rehearing en banc will be entertained.P A U M A V

. S T A T E O F C A L I F O R N I A 5

OP INION

TAL L MAN, Circuit J u dg e:

Six teen y e ars ag o more than six ty Native American tribes entered into Tribal-State Gaming Compacts with the State o f California. Sadly

, the long and tortured history leading to the culmination of t h e s e Compacts did not cease there. Rather, litig ation based on a mbig uous provisions as to the number o f authoriz ed g amin g d e v i ces h as ensued for most o f the duration of these Compacts. S e e I n re Indian G aming Related C a s e s , 331 F .3d 1094, 1095–1107 (9th Cir. 2 003) ( d e t ailing the entire history before and after the Compacts

were enacted )

. B efore us is y et a nother installment in this
ong oing sag a, this time between the Pauma B a nd of L u iseno Mission I ndians (“Pauma” o r “the Tr i b e ”) and the State o f C a l i f o r n i a , t h e C a l i fornia Gambling Control Comm i s s i o n , a n d Governor Edmund G. B r own, J r. (collectively “the State”).

Pauma sued the State b ased on our pr i o r decision in Ca chil Dehe B and of W

intun Indians of the Colusa Ind i a n Community v. California (“ Colusa II ”), 618 F .3d 1066 (9th Cir. 2010). W e have b een asked to determine (1) wh e t her C o lusa II ’ s interpretation o f the Compacts’ license po o l provision ap p l i e s retroactively

, such that the State w o uld be deemed to have misrepr e s e n t e d a material fact as to h ow many g a ming licenses were available when neg otiating with Pauma to amend its Compact; ( 2 ) w h e ther the district court awarded the proper remedy to Pauma by r e f u n ding $36.2 million in o verp a y

ments; a nd (3) whether the State has waived its s o v e reig n immunity under the Eleventh A m e n dment. W e answer each question in the affirmati v e, althoug h on alternative g rounds supporting the relief awarded by the district court with respe c t t o the remedy

. On cross-P A U M A V

. S T A T E O F C A L I F O R N I A 6

appeal, Pauma also a s k s us to d etermine whether the State acted in bad f

aith un d e r t h e I ndian Gaming Reg ulatory A ct (“I GRA”), 25 U.S. C

. § 2710. W e ag ree w ith the district court’s finding that I GRA is inapplicable here, an d t h us Pauma’s arg ument that the State a c t e d in bad f aith is irrelevant.

W e h ave jurisdiction u nder 28 U.S

. C. § 1291, and we affirm.

I

W e b eg in our journey with a quick overview of the weathered past between N ative American tribes and the State of California, and then d iscuss the complic ated procedural history that leads us here.

A

I n 1988, Cong ress a ttempted to strike a d e l i c ate balance between the sovereig nty of states and federally recog niz ed Na t i v e A merican tribes by passing I GRA. The purpose o f I GRA is well established:

I GRA w as Cong ress’ compromise solution to the difficult questions involvin g I ndian
g aming

. The Act w as p a s s e d in order to provide “a statutory basis for the operation o f
ga m ing by I ndian tribes as a means o f promoting tribal economic d evelopment,

s e l f

- s u f f i c i e n c y , a n d s t r o n g t r i b a l
g overnme n t s ” a

nd “to shield [ tribal g a ming ] from org aniz ed crime and other c orrupting influences to e nsure that the I ndian tribe is theP A U M A V

. S T A T E O F C A L I F O R N I A 7

primary beneficiary of the g aming operation.” 25 U

. S

. C

. § 2702(1), (2). I GRA is an

ex a mple o f “cooperative federalism” in that it seeks to balance the c o mpeting sovereig n int erests of the federal g overnment, state g overnments, and I n dian tribes, by g iving each a role in the reg

ulatory scheme.

Artichoke Joe’s Cal. Grand Ca s i n o v. Norton
, 216 F

. Supp. 2d 1084, 1 092 (E.D. Cal. 2002), aff’d

, 353 F .3d 712 (9th Cir. 2003). I G RA creates three classes of g aming

, with Class I I I
g aming consisting of “the ty pes of hig h-stakes g ames usually

a s s ociated with N evada-sty le g ambling .” In re Indian Gaming
, 331 F .3d at 1 0 97. As a result, Class I I I g a ming is subjected to the g reatest d e gr e e of control u nder I GRA’s
reg ulations. Class I I I g aming is lawful on Native American lands only if such activities are co n d u c t e d pursuant to a Tribal-State Compact entered into by the tribe and a state that permits such g aming

, a

n d the Compact is ap p r o ved by the Secretary of the I nterior. Id. (citing 25 U.S.C. § 2710(d)(1), (3)(B )).

California did not immediately allow I ndian g am ing within its boundaries after t h e p assag e of I GRA. Some
g ubernatorial administrat i o ns w ere hostile to tribes conducting Class I I I g aming because it was then p rohibited by California’s Constitution, and so the State r efused to neg otiate with the tribes to permit it. See id. at 1098–99. I n 1998, the pe o p l e of California spoke by passing the tribes’ ballot initiative—Proposition 5 (codified at Cal. Gov’t Code §§ 9 8 0 0 0

– 9 8012). See Hotel Emps. & Rest. Emps. I nt’l Uni o n v

. D avis
, 21 Cal. 4th 585, 5 89 (1999). Proposition 5 contained a model compact purporting to effectuate I GRA’s provisions within California. Id. a t 589–90. B ut the victoryP A U M A V

. S T A T E O F C A L I F O R N I A 8

was short-lived. The California Supreme Court found all but

one sente n ce of Proposition 5 unconstitutional. 1 Id. at 589, 615. Undeterred, t h e v oters of California responded b y amending the California C o n s titution on March 7, 2000, to create an ex c eption for c e rt ai n ty pes of Class I I I I ndian
g aming notwithstanding the g eneral prohibition o n g ambling in the State. In re Indian Gaming , 331 F .3d at 1103 & n.11.

I n September 1999, several tribes beg an neg otiating with the State to enter nearly

identical Compacts to operate Class I I I
, or casino-sty le, g ambling (the “1999 Compact”). I n April 2000, Pauma joined more than six ty o t her tribes w ho ultimately sig ned the 1999 Compact. The 1999 Compact contains a provis i o n limiting the number o f licenses 2 availab l e s t atewide for tribes based on a formula. 3 As we

1 T h e so le su

rv iv in g p ro v isio n o f P ro po sitio n 5 is th e statu to ry w aiv er of

so v ereig n im

m u n ity b y t h e State f o r claim s arisin g o u t o f v io lat i o n s o f IGRA . Cal. Go v ’ t Co d e § 9 8 0 0 5

. T h e Calif o rn ia Su prem e Co u rt f

o u n d th is p ro v i s io n sev er a b le an d reco g n ized th at t h e lan g u ag e w as m ean t to ef f ectu ate IGRA sin ce th e U.S. Su p rem e Co u rt h ad recen tly strip p ed th e A ct o f its teeth i n Semin o le T rib e of Flo rid

a v. Flo r i d a , 5 1 7 U.S. 4 4 ( 1 9 9 6 ). Ho tel Emp s. , 2 1 Cal. 4 th at 6 1 4

– 1 5 ; see a lso Rin co n Ba n d o f Lu isen o Missio n In d ia ns v. Sch wa r zen eg g er , 6 0 2 F.3 d 1 0 1 9
, 1 0 26 n .8 (9 th Cir. 2 0 1 0 ) (“ Calif

o rn i a h as w aiv ed its Elev en th A m en d m en t im m u n ity f ro m su ch su its [b ro u g h t b y

trib es u n d er IGRA ].”).

2 Each licen se is th e eq u iv alen t o f on e s lo t m ach in e o r electro n ic v i deo
g am in g d ev ice, an d each trib e w a s l i m i t ed to a m ax im u m o f 2 ,0 0 0 licen ses.

3 T h e fo r m

u l a, w h ich h as b een th e su

b j ect o f m u ch litig atio n , i s f

o u n d in sectio n 4 .3 .2 .2 (a)(1 ) an d read s:

T h e m a x i m

u m n u m b er of m ach in es th at all Co m p act T rib es in th e ag g reg ate m ay licen se p u rsu an t to th is Sectio n sh all be a su

m eq u al t o 3 5 0 m

u ltip lied b y th eP A U M A V

. S T A T E O F C A L I F O R N I A 9

have previously observed, “ [ t] he L icense Pool Provisions that C a lifornia and [ the tribes] included in their Compact as a foundation for establishing Class I I I g aming in California a re murky at best.” Colusa I I
, 618 F .3d a t 1084. Due to the limited time the tribes had to neg otiate with the State, the parties ag reed to the 1999 Compact without ever discussing their radically different interpretations of how many licenses the statewide license pool f ormula actually produced. S ee id.
at 1070–72; In re Indian Gaming
, 3 3 1 F .3d at 1104. I t required protracted litig ation before we settled the number in Colusa II , 618 F .3d at 1082.

B y December 2003, the State informed the tribes that the collective license pool had been ex hausted—without stating the total number of licenses a ctually authoriz ed—and Pauma received only 200 licenses i n that draw instead o f its requested 750. Thus several tribes, including Pauma, beg an neg otiating with the State to amend their Com p acts in order
to abolish the license pool p rovision and ga i n a c cess to an unlimited number of l i c e nses. The State demanded substantially more money p er oper a ble license during

ne g o t iations, Rincon Band of Luiseno Mission Indians v

. Schwarzenegger

, 6 0 2 F .3d 1019, 1025 ( 9th Cir. 2010)

, and only five tribes—including Pauma—ultimately co n cluded such amendments (“2004 Amendment”). Colusa II
, 618 F .3d
at 1072. At t h e t ime, Pauma was set to enter into a contract

n u m b er o f No n -C o m

p act trib es as o f Sep tem ber 1
, 1 9 9 9
, plu s th e d if

f eren ce betw een 3 5 0 an d th e lesser

n u m b er au th orized u n der Sectio n 4 .3 .1

.

Sectio n 4 .3 .1 states trib es m ay n o t op erate m o re g am in g d ev ices t h an “ th e l a r g er o f ” “ (a) A n

u m ber of term in als eq u al to th e n u m b er o f Gam in g Dev ices o p erated b y th e T rib e o n Sep tem b er 1
, 1 9 9 9 ; o r (b ) T h ree h u n d red f if ty (3 5 0 ) Gam in g Dev ices.”P A U M A V

. S T A T E O F C A L I F O R N I A 10

w i t h C a e sars to build a L a s Veg as-sty le casino in place o f Pauma’s t e n t facility near San Dieg o, but needed more g aming licenses to do so. 4

Several lawsuits ensued. B y 2009–2010, these suits had percolated in the district courts for several y ears, a nd culminated in dispositive opinions rendered by our court. See Colusa II
, 6 18 F .3d at 1084; Rincon
, 602 F .3d at 1026 (holding that the State neg ot i at e d i n bad faith by refusing to

remove a provision from the proposed 2004 Amendment for 15% o f Rincon’s net w i n s , which w e declared an impermissible tax under I G RA). I n Colusa II
, w e h e l d that the State miscalculated the number of licenses in the common pool under the 1999 Compact. 6 18 F .3d at 1080. W e f ound that the formula in the 1999 Compact allows for a statewide total o f 40,201 licenses, not the 32,151 that the S t a te h ad orig inally calculated. I

d. at 1082.

4 Fo r m o re d etail o n th e u n su ccessf u l d eal w ith Caesars, se e Pa uma Ba n d of L u i

sen o Missio n In d ia ns v. Ha rra h ’s Op era t in g Co

. , No

. D0 5 0 6 6 7, 2 0 0 9 W L 3 0 69 5 7 8 (Cal. Ct. A p p

. Sep t. 2 8
, 2 0 09 ). In su

m m ary , th e P au m a an d Rin co n trib es are co m p etito rs w h o se casin o s are o n ly six

m iles ap art i n San Dieg o C o u n ty

. Id

. at * 2

. T h e Rin co n trib e h ad alread y p aired w ith Harrah ’ s in b u ild in g a Nev ad a- sty le casin o , an d w as o p eratin g 1 6 0 0 licen ses w

h en th eir n eg o tiatio n s w ith th e State b ro k e d o w n o v er th e p ro p osed 20 0 4 am en d m en ts. P au m a in t e n d ed t o en ter its co n tract w i th C aesars to co m

p ete w ith Rin co n , b u t th en Caesars an d Harrah ’ s m e r g e d in 2 00 4

. Id

. P au m a k

n ew t h e R i n co n ’ s ex clu siv ity ag reem en t w i th Harrah ’ s w o u ld preclu d e it f ro m b u ild in g a co m

p etin g casin o an d so P au m a b ack ed o u t o f th e Caesars d eal. Id

. at * 3

– 4

. P au m a co n t in u ed b y

n eg o tiatin g w ith sev eral o th er l arg e g am in g co m p an ies (Hard r o c k

, Fo x w o od

, etc.), bu t th e eco n o m ic recessio n of 20 0 8 stru ck an d n o d eal

w as ev er co m

p leted

. I d

. P a u m a h as n ev er b een ab le to b u i ld a larg er casin o, an d still o p erates its 1 ,0 5 0 licen ses o u t o f a ten t f acility

.P A U M A V

. S T A T E O F C A L I F O R N I A 11

B

Shortly after the d i s t r ict court in Colusa rendered its decision holding that more licenses ex isted than the State h ad allowed, Pauma filed a complaint asserting e ig hteen c l a i m s attacki ng the formation of the 2004 Amendment under various theories, including mistake and misrepresen t a tion. Pauma notes that it has remained at r o ug hly 1,050 l i c en s e s since December 2003 when the State first asserted t h a t the license pool had been depleted, w hile two neig hboring tribes operate at least 2,000 g a mi n g d ev ices apiece. Pauma

ex e c uted the 2 004 A m endment because it needed to have at least 2,000 licenses in o rder to secure a viable deal with a L a s Veg as-sty le operator. Bu t after the putative deals fell throug h, Pauma continued pay ing California the ex orbitantly

ex p ensive 2004 Amendment prices f or the same machines it acquired under the 1999 Compact p r o v i s ions. Under the orig inal 1999 Compact, Pauma paid $31 5
, 0 00 annually for the 1,050 m achines. U nder the 2004 Amendment, Pauma paid $ 7.75 million a

nnually

. Pauma soug ht refo r m a t ion, injunctive relief, rescission, and restitution.

I n Apri l 2 010, the United States District Court for the Southern District of Califo r nia g ranted Pauma’s request for injunctive r elief from the a nnual $7.75 mill ion pay ments, permitting Pauma to revert to the 1999 Compac t rate. The State a ppealed. O n t he prior appeal, No. 10-55713, we left the injunction in place but remanded to the d i s trict court for reconsideration of the preliminary injunction factors in lig ht of recent cases, including Colusa II

. On remand, the case was reassig ned to thr ee different district judg es before the court finally ruled on the summary judg ment motions, leaving the injunction in place.P A U M A V

. S T A T E O F C A L I F O R N I A 12

Presently before us is the d istrict court’s s u m m ary j u d g ment ruling in favor of Pauma on its misrepresentati o n

c l a im. I n lig h t of our ruling in Colusa II
, the district cou r t found the State had mis r e p re s ented the number of licenses available in December 2003 when it told Pauma the pool was

ex h austed; in fact, the re were 8,050 remaining

. As a r esult, the d i strict c ourt rescinded the 2004 Amendment, allowed Pauma to r eturn to the 1999 Compact’s lower rate, a nd ordered as specific performance a refund of the difference in
pay ment that Pauma h ad made as between the hig her a nd lower rates for the 1,050 machines (totaling $36,235,147.01). The district court also h eld that the State had waived its Eleventh Ame n d ment sovereig n immunity in a provision in the 1999 Compact, which the p arties had left undisturbed in the 2004 Amendment. The court further held t h at the State

was not e ntitled to a setof f for the profits Pauma made between 2004 and 2009 because Pauma shoul d h a v e been able to obtain the 1,050 machines u nder the c o r rectly calculated license formula in the 1999 Compact.

The district c ourt en t e r e d final judg ment in December 2013, b ut was i m mediately asked by Pauma to vacate the order so it could r equest further relief. Pauma soug ht a ruling

o n t wo additional c laims labeled “bad faith/violation o f I G RA” so that the Tribe would be entitled to reformation rather than rescission. The district court denied the request a s moot since it would not result in a remedy different from the

one already provided to Pauma, and held it would fail on the

m e r its in any event. This ruling trig g ered Pauma’s mandamus p etition, which w e denied as premature earlier thisP A U M A V

. S T A T E O F C A L I F O R N I A 13

y ear. 5 T he State’s appeal and Pauma’s cross-appeal are n ow ripe for review.

II

W e review a district court’s g rant of summary judg ment de novo

. Big Lagoon Rancheria v. California

, 789 F .3d 947, 952 n. 4 (9th Cir. 2015) (en banc). “Summary judg ment is appropriate if there is n o g en u i n e issue of material f a ct and,

even making all reasonable i n f erences in favor of the nonmoving party , the moving p arty is entitled to judg ment a s

a matter o f law.” Rincon
, 602 F

. 3d at 1026. W e also r eview the following leg al determinations de novo : interpretation o f contracts based on the plain meaning

, Colusa II , 618 F .3d at 1070; w hether neg otiat i o n s were conducted in g ood faith under I GRA, Rincon
, 602 F .3d at 1026; and the applicability of Eleventh Amendment sovereig n immunity

, Idaho v

. Coeur d’Alene Tribe

, 794 F .3d 1039, 1042 (9th Cir. 2015). “ General principles of federal contract law g overn t he Compacts, which were entered pursuant to I GRA.” Colusa II
, 618 F .3d
at 1073 (citation omitted). W e “ often look t o the

. . . Restatement when deciding q u estions of federal common law.” Curtin v. United Airlines, Inc.
, 275 F .3d 8 8
, 93 n.6 (D.C. Cir. 2001). W e may a lso rely on California contract law since there i s no practical difference between state a nd federal law in this area. Colusa II

, 618 F .3d at 1073

.

5 P au m a’ s m an d am

u s p etitio n essen tially ch allen g ed th e d istrict co u rt’ s d ecisio n to ru le s o lely o n its m isrep resen tatio n claim

, an d ref u sal to reach

an y o f t h e o th er claim s—su ch as th e T rib e’ s b ad f aith claim s u n der IGRA

. W e allo w ed P au m a to assert su ch claim s in its cro ss- ap p eal, an d P au m a h as ch o s en

to d o so . W e ad d ress th em b elo w

.P A U M A V

. S T A T E O F C A L I F O R N I A 14

“W e review the distri c t court’s choice of r emedy for abuse of dis c r e tion.” Id. at 1082. A misapplication o f the
correct leg al rule co nstitutes a n abuse of discretion. United States v

. Hinkson

, 585 F. 3d 1247, 1261–62 (9th Cir. 2 009) (en banc). Otherwise, we must “determine whether the trial court’s application of the correct leg al st andard was (1) illog ical, (2) implaus ible, or (3) without support in inferences that m ay be drawn from the facts in the record.” Id. at 1262 (internal quotations omitted).

III

The h e a r t of the State’s arg u ment b efore us focuses on whether there was a “fact in ex istence” that it misrepresented
to Pauma during the 2 0 04 neg otiations. Thus, we r eview whether Colusa II ’s holding t h a t 40,201 licenses were available—meaning 8,050 remained in December 2003 when the State t o l d Pauma that the license pool h ad been depleted—constitutes a “fact in e x iste n c e ” g iving rise to liability under Pauma’s misrepresentati on claim. W e hold that, unlike a chang e in judicial interpretation of a statute o r law, the doctrine of retroactivity does not apply to contracts. Once there has been a final judicial inter p r e t ation of an ambig uous contract provision, that is and has alway s been the correct interpretation from the document’s inception.

I n orde r t o establish its misrepresentation claim, Pauma
must demon strate: (1) the State made a misrepresentation

a b o u t a fact in ex istence, (2) that w as either f raudulent o r material, (3) wh i c h induced Pauma to enter into the 2004 Amendment, and (4) P a u m a was justified in rely ing on the State’s misrepresentation. See Restatement ( Second) o f Contracts § 164(1) (1981); see also Addisu v. Fred Me y e r , Inc.
, 1 9 8 F .3d 1130, 1137 ( 9th Cir. 2 000) (adopting theP A U M A V

. S T A T E O F C A L I F O R N I A 15

Restatement d efinition for misrepresentation). The outcome of this case hing es on the first prong

. “A misrepr e s e n tation is a n a ssertion that is n ot in a ccord with t h e facts” as they

ex ist at the time the assertion is made. Restatement (Second) of Contracts § 159 & cmt. c. “Such facts include past events

as well as present circumstances but do not include f u t u r e events. An a sse r t ion limited to future events

. . . may be a basis of liability for b reach of contr a c t, but not of relief for misrepresentation.” Id. § 159 cmt. c.

F urthermore, “an assertion need not be fraudulent to be a misrepresentation” so long as “ it is material. ” I d

. § 159
cmt. a; cf. Relia n c e Fin. Corp. v. M iller

, 557 F .2d 674, 680 (9th Cir. 1977) (r e fe rring to this v ersion as “innocent misrepresentation”). 6 A misstated fact is “material if it would be likely to induce a r easonable person to manifest h i s [ o r her] assent” to enter a contract. Restat e m e n t (Second) o f Contracts § 1 62(2). “A misrepresentation ind u c e s a party ’s manifestation of assent if it substantially contributes to his [ o r her] decision to” enter the contract. Id. § 16 7

. Althoug h a party must have justifiably relied upon the misrepresentation, “the requirement of justificatio n is usually met unless, for

ex a mple, the fact to which the misrepresentation relates is o f

6 W e n o te t h a t th e d istrict co u rt h ad bef ore it P au m a’ s claim s f

or eith er i n n o cen t/m aterial m isr e p resen tatio n o r f rau d u len t/n eg lig en t

m isrep resen tatio n

—an d th e co u rt ru led f

or P au m a so lely o n th e f

orm er. T h u s, w e ref

u se to co n s i d e r an y o f P au m a’ s assertio n s th at th e State k n o w i n g ly acted i n b ad f

aith or w ith an y k in d o f ev il in ten t. T h e f o rm u la

w as co n f u s in g

. W e d e f

in itiv ely reso lv ed t

h e issu e in 2 0 1 0

. N o t

h in g in

o u r d ecisio n in Co lu s a II s u g g ests th e State s h o u ld h a ve kn o wn th e co rrect

n u m b er o f licen ses w

h en n eg o tiatin g w ith Pau m a in 20 0 3– 20 0 4, an d w e ref u se to so h o ld n ow

. W e rev iew on l y w h eth er in n o cen t

m isrep resen tatio n

w as p ro p erly

ap plicab l e.P A U M A V

. S T A T E O F C A L I F O R N I A 16

only peripheral importance to the transaction

. . . .” Id. § 164 cmt. d.

W h ile b oth p a r t i e s dispute whether the doctrine o f retroactivity applies, that doctrine is a red herring because we

are dealing with a cont r a c t provision. The State arg ues that

our holding in Colusa II does not apply “retroa c t i v e l y

. ” I n essence, the Sta t e asserts that the district court erred in
g ranting summary judg ment for Pauma because the l i cense pool did not ex pand until mid-2009 when a district court first handed down its ruling in Ca c hil Dehe B and of W intun Indians of the Colusa Indian Community v. California (“ Colusa I

”), 629 F . Supp. 2d 1091 (E.D. Cal. 2009). I n the State’s view, the number of available licenses c hang e d when

we handed down Colusa I I in 2010. Thus, the State contends it could not h ave misrepresented an ex isting fact when it denied licenses to tribes b ey o nd a total of 32,151. We reject this arg ument.

W e find that the term “retroactive” is a misnomer in the realm of contract interpretation. Once a c ourt has interpreted

an ambig u ous contract provision that is and has always been the c orrect interpretation from its formation. Althoug h the

c a ses discussing the retroactivity of judicial decisio n s interpreting stat u t es may be instructive, a contract is fundamentally differe n t f rom a statute or a body of law. A
contract is a private ag reement formed between two parties to represent their m u t u al intent. See Restatement (Second) o f C o n t r a cts § 3

. Thus, a contract provision has only one t r u e

me aning —what it meant when written—even thoug h the parties may later dispute the correct interpretati on. B y contrast, a statute is enacted b y Cong r ess and theP A U M A V

. S T A T E O F C A L I F O R N I A 17

understanding of its provisions may e v o l ve over time, often throug h judicial interpretations or leg islative amendments. 7

“[ T] he fundamental g oal of contract interpretation is to g ive effect t o the mutual intent of the parties as it existed at
t h e t i m e of c ontracting

. ” U .S. Cellular Inv. Co. v. GTE Mobilnet, Inc.
, 281 F .3d 929, 934 (9th Cir. 2002) (emphasis added). This fundamenta l a x iom is widely accepted a nd uncontested. See, e.g.
, Colusa II , 618 F

. 3d at 1073 (holding the “court g ives effect to the mutual intention of the p arties as it exis t e d at the time the contract was e x ecuted” (emphasis adde d ) (internal quotations o mitted)); Liberty Nat’l Bank & Trust Co. v. Bank of Am. Nat’l Trust & Sav. Ass’n , 218 F .2d 831, 8 40 ( 10th Cir. 1955) (“[ T] he basic rule of universal acceptation for the ascertainment of [ the parties] intention is for the court, so f

ar as possible, to put itself in the place of the parties when their minds met upon the terms of the ag reement . . . .”); 11 W illiston on Contracts § 31:9 (4th ed. 2015).

W h en dealing with interpretation o f a contract there is no such thing as a “chang e in the law”—once a f i n a l judicial decision determines what the contested la n gu ag e supports, that is it. The State’s arg ument that Colusa II “chang ed” the number of licenses available under the license pool provision defies log ic. A s is ty

pical in c ontract interpretation cases, the disp u t e w as between the parties’ competing calculations. Once we decreed that 40,201 licenses were avai l a b le under the formula provision b ased on a reasonable interpretation o f

7 T h eref o re, th e d issen t’ s relian ce o n Cu r tin v. Un ited Airlin e s , I n c

. i s

m isp laced as it in v o lv es th e j u d icial in terp retatio n o f a p r o v i sio n of th e W arsaw Co n v en tio n ; a leg islativ ely en acted d o cu m en t, sim ilar to a s tatu te, rath er th an a co n t r a c t. S ee 2 75 F.3 d 88
, 9 6 –9 7 & n n

. 1 6

– 20 (D.C. Cir. 2 0 0 1 ).P A U M A V

. S T A T E O F C A L I F O R N I A 18

the contract lang uag e a

nd the intention of the parties at t he time it w as formed, we resolved the dispute. Colusa II
, 618 F .3d at 1081–82. T hus, the number of licen ses never “chang ed” as the State asserts.

I n C o l u sa II

, we found that the State did not adequately

ex p l a in why it had chosen 32,151 f or the total available licenses since “the f

oundation for this

. . . number is at odds

w ith the plain lang uag e of the contract and wi t h a n interpretation of part of the formula that is now ag reed upon by both parties.” Id. a t 1076; see also id. at 1078 nn. 9 & 12. W e calculated the correct number of licenses that “ were authoriz ed for d istribution statewide throug h the license draw process,” to be 40,201, id. at 1082, and then we turned to the opinion’s prospective effect on other tribes. W e recog niz ed
t h a t “the remedy deprived the state of its rig ht to litig ate t h e siz e of the license pool under d ifferent facts in other pending and future cases” because we purposefully “an t i cipated that California would be liable for a sing le number of licenses in the statew ide pool, not separate numbers for separate litigants based on their r espective situations.” Id. a t 1084 (emphasis added) (internal quotation marks omitted). I n sum,

our interpretation in Colusa II o f the 1999 Compact’s license pool provision is the final word for all tribes, at all times.

The f ormula for calculating the license po ol never chang ed

— i t just took o ver a decade to reach a final judicial interpretation which settled a long standing dispute over the number of licenses it authoriz ed. I nnocent misrepresentation of a different number does not require a fraudulent o r misleading intent. See Restatement (Second) of Co n t r a c ts § 1 59 cmt. a. I t simply requires a fact, which is materi a l

, t o be false. I

d. § 159 cmts. a, c. The formula stated in the 1999 C o m p a ct is a fact. The number of tribes with and wit h o u tP A U M A V

. S T A T E O F C A L I F O R N I A 19

Compacts as o f the l i sted date ( September 1, 1999) was an ascertainable, ex isting fact. See Colusa II
, 618 F .3d at 1073. The number of licenses each tribe with a Compact had as o f that d ate was also an e x isting fact. Id. at 1074. The State h ad all of the information it needed to calculate its own formula. 8 The State simply

miscalculated.

U n d erstandably

, the State “ex presses a sense of un f a i r n e s s eng endered by the retrospective a pplication of a new judicial interpretation of an [ ex isting c o n t r act p rovision]

. B ut the

essence of

judicial decisionmaking necessarily involves some peril to individual ex pectations.” Morales-Izquierdo v. Dep’t

o f Homeland Sec.
, 6 00 F .3d 1076, 1090 (9th Cir. 2010) (internal quotation and alterations omitted). The State could h ave soug ht a declaratory judg ment much earlier, but i t d i d
not. The State also could have simply used fix ed numerals in the formula, but it did not. The f act that there was ambig uity in the formula’s lang uag e or that the State i n t erpreted the total number o f licenses in g ood faith is i r re l e v a nt to the analy sis. W e interpreted the total number of l icenses in the license pool to be 40,201 based on a reasonable interpretation of the c ontract lang uag e. T heref o r e, in December 2 003, the State misrepresented an ex isting fact to the tribes—including Pauma—that no further licenses were available when, in fact, there were 8,050 more licenses under the correct interpretation of the formula.

8 “ [I]t is u

n d isp u ted th at t h e S t a te’ s n eg otiatio n t eam actu ally d raf ted [th i s p ro v i sio n ] i n th e C o m pact.” Co lu sa I

, 6 2 9 F. Su

p p

. 2 d at 1 1 1 5

. A s

su ch

, g en eral co n tract p rin cip les also in d icate th at an y am b i g u ity i n “ ‘ th e l a n g u a g e o f th e co n tract sh o u ld b e in t erp reted s tro n g ly ag ain s t th e p arty

w h o cau sed th e u n certain ty to ex ist’ [( i.e.
, th e State d raf ters)].” Id

. at 1 1 1 3 (q u otin g Bu ckley v. Terh u n e , 4 41 F.3 d 6 8 8
, 6 9 5

– 96 (9 th Cir. 2 0 0 6 )).P A U M A V

. S T A T E O F C A L I F O R N I A 20

Th e State’s remaining a r g u ments reg arding the misrepresentation claim warrant only b rief discussion. F irst, the Sta t e ’ s a r g ument that the license pool provision was not material to the 1999 Compacts borders o n the incredible. See Colusa II
, 618 F .3d at 1069 (“Central to the Compacts is a formula to calculate the number of g aming devices California tri b e s a r e permitted to license.”). Second, the State’s
arg ument that th e l i m i t ed number of licenses did n o t induce Pauma to e nter the 2 0 04 Amendment is equally absurd, considering procurement of more licenses (at least 2,000) was essential to its putative contract with Caesars, dependent on at least that many d evices. F inally

, Pauma justifiably relied

on a fact that was entirely within the State’s control (the total number of a vailable licenses). Pauma has, therefore, established that n o g e nu ine issue o f material fact remains as
to its misrepresentation c laim, and the district court properly
g ranted summary

judg ment. 9

IV

After g ranting summary judg ment i n f avor of Pauma on its innocent misrepresentation claim, the district court turned
to the appropriate remedy

. Since the Compacts incl ude a limited waiver of sovereig n immunity that a l l o ws for suit seeking an equitable remedy

, b ut n ot o ne see k i n g monetary damag es, we must first decide what the correct remedy is. Then we determine whether that remedy is barred b y t he

9 W e n o te th at m o st trib es h av e alread y receiv ed th eir licen ses u n d e r Co lu sa II
, w h ic h a p p r o v ed th e d i strict co u rt’ s rem ed y o f re- o p en in g th e d raw p ro cess f

o r th e rem ain d er o f t

h e licen ses. B y co n trast, P au m a is on e

o f o n ly f iv e trib es w

h o ch o se to am en d its Co m p act an d th u s p aid h ig h er p rices f o r licen s es w

h ich it sh ou ld h av e b een ab le to o b tain u n d er th e

o rig in al 1 9 9 9 Co m

p act.P A U M A V

. S T A T E O F C A L I F O R N I A 21

Eleventh Amendmen t or if it falls within the State’s limited waiver.

A

The d istrict court erred in awarding Pauma $36.2 million under the g uise of “specific perfor mance.” Specific performance is a remedy associated with breach of c ontract. Restatement (Second) o f Contracts § 357; 81A C.J .S. Specific Performance § 4 (2015) (“[ A] c a use for specific performance ordinarily cannot lie until there has been a br e a c h o f the contract.”). “A p a r t y w ho has avoided a contract on the
g round of

. . . misrepresentation

. . . is entitled to restitution f o r an y benefit that h e has c o n ferred on the other party b y way of part performance or reliance.” Restatement (Second) of Contracts § 376; 1 Witkin, S u m m a ry of California L aw, Contracts § 1022 (10th ed. 2005) (“A person who pay s money under the mistaken belief that he or she is under a duty to do

so may recover it.”). F urthermore, “[ s] pe c i fic performance

. . . will not be g ranted unless the terms of the cont r ac t a re sufficiently certain to provide a b a s i s for an appropriate order.” Restatement (Second) of Contracts § 362.

W h ere, as here, n o breach o f a contract has been a lleg ed, but rather a challeng e to its formation— i.e.
, Pauma would not have entered into the 200 4 A mendment had it known additional licenses were available at the c heaper 1999 Compact rates—the contract is voidable and the appropriate remedy is rescission and restitution. See 1 W itkin, Summary of California L aw, Contracts § 3 0 7 (10th ed. 2005) (noting innoc e n t m i s r e p r e sentation is g r ounds for rescission); see also Reliance Fin. Corp.
, 5 5 7 F. 2d at 680 (same); Restatement (Third) of Restitution §§ 52, 54 (2011); Dan B

. Dobbs, Law of Remedies § 4.1(1) (2d ed. 1993) (“W hen the contract itselfP A U M A V

. S T A T E O F C A L I F O R N I A 22

is unenforceable, restitution is u sually t h e only remedy available for benefit s t h e plaintiff has conferred u pon a defenda n t in part performance.” (emphasis in orig inal)); id. § 9.2(2) (“A representation by the defendant, if believed b y the plaintiff, would be the equivalent of a mutual mistake for which rescission would be g ranted.”); id. § 9.3(1).

Moreov e r , o n e c a

n n o t specifically perform something that is n ot a term in the contract. Cf. Restatement (Second) o f Contracts § 3 62. The Compact did not contain a c l a u s e f o r dealing with overpay

ments. Th e s o l e option for returning Pauma to the status qu o ante was e quitable restitution. Id. § 376; see Ambassador Hotel Co. v. W ei-Chuan In v

. , 189 F .3d 1017, 1031 (9th Cir. 1999). Thus, the district court misapplied the law in label ing the remedy specific performance.

H o w e ver, in this case, the d istrict court’s error in mislabeling the remedy does not require r e v ersal. Neither

s i d e disputes the calculation of $36,235,147.01 as the difference between t h e hig her 2004 Amendment pay ments and the lower 1 9 9 9 C ompact’s rates. Rather, the State challeng es only whether it is entitled to a setoff for the p rofits Pauma g ained from operating machines it would n o t have h ad absent the 2 004 Amendment, and Paum a now alleg es it is entitled to essentially r eform the entire contract under the procedu res outlined in I GRA. Since we reject both

ar gu ments, we affirm the district court’s calculation of the remedy on the alternative g r ounds of equitable r escission a nd restitution.

Under g e neral contract princip l e s , “[ w] hen calculating restitution, we must offset the Plaintiffs’ award by the value of any benefits that Plaintiffs received from the [ D] efendantP A U M A V

. S T A T E O F C A L I F O R N I A 23

under the contrac t , so that only the actual, or net, loss is compensated.” R epublic Sav. B a nk, F.S.B. v. United States

, 584 F .3d 1369, 1377–78 (F ed. Cir. 2009) (internal quotation

om i t t ed ); see, e.g. , Cal. Fed. Bank v. Matreyek

, 8 Cal. App. 4th 125, 134 (1992) (holding restitutionary r e covery inequitable where the bank would b e able to retain both a ben e f it and a profit); Restatement (Second) of Contracts § 384; D a n B

. Dobbs, Law of Remedies § 9.3(3) (2d ed. 1993). The State is not entitled to a setoff her e b e c ause Pauma w ould have made the same profits by acquiring t h e

same number of machines under the 1999 Compac t t h a t it

now operates under the 2004 Amendment if the State had not miscalculated the number of available licenses.

The State arg ues that, althoug h this would return Pauma
to the status quo ante in th e o r y , in reality it would unjustly enrich Pauma vis-à-vis the o ther tribes who were p a r t i es to the 1999 Compact because the other t r ibes w ere unable to obtain “unlimited” machines a s Pauma c ould under the 2004 Amendment and thus did not earn addi t i o n a l profits. Essentially

, the State arg ues that Pauma will receiv e a windfall of roug hly $ 16 million b y sitting on the sidelines during the Colusa litig ation.

However, the State’s a

rg u m ent depends on viewing the

s ituation holistically

, in contravention to g eneral litig ation principles. T he district court correctly stated it must deal solely with the parties before it. See, e.g. , B oati n g I n d us. Ass’ns v. Marshall , 601 F

. 2d 1376, 1382 n.7 (9th Cir. 1979) (“Remedy for this injury would depend upon actions o f third parties not before the court in this action.”). Under this v iew,

as between Pauma and t h e State, Pauma is not obtaining a “windfall” because it should never have had to pay the State the $36.2 m i l l ion in the first p lace, and it should have beenP A U M A V

. S T A T E O F C A L I F O R N I A 24

able to obtain the same number of licenses (a total of 1,050) for less money

. Thus, the State’s arg u ment— t o consider Pauma’s p osition in comparison to the other tribes w ho were unable to obtain further license s a n d the attendant
pro fits—must fail. The district court correctly held that the State is not entitled to a setoff.

Pauma’s arg ument for ref o r m a tion meets a similar fate. On cross-appeal, Pauma requests reformation of the 2004 Am e n dment—rather than rescission—so that Pauma may keep the amended contract’s ex tended term limit (ex p iring in 2030 instead of 2 0 2 0 ) at the more favorable 1999 Compact price rates. “[ H] owever, reformation is proper only in cases of fraud and [ mutual] mistake.” Skinner v. Northop Grumman Ret. Plan B
, 673 F .3d 1162, 1166 (9th Cir. 2 012);

see Restatement (Second) of Co n tracts § 166 (referencing only fraudulent misrepresentation as g iving rise to reformation as a remedy

); Dan B

. Dobb s , L a w of Remedies § 9.5 (2d ed. 1993) (“Reformation is the appropriate remedy

. . . f or fraud or mistake in the writt e n e x p r e ssion of the
ag reement.”). This case involves innocent misrepresentation,
not fraudulent m isrepresentation. Reformation is thus inappropriate here.

I n sum, the distr i c t court erred in apply ing the law o f

c o n t r a ct u a l re m ed i es b y a wa r d i n g P a u m a s p e c i fi c perform ance rather than ordering rescission and restitution. B ut because neither side c hall e n g e s the calculation of the remedy

, only whether a setoff should b e a p plied o r reformation o rdered a s a superior remedy — both of which we reject—we a ffirm the district court’s award to Pauma o f $36,235,147.01 under the equitable remedies of resc ission and restitution.P A U M A V

. S T A T E O F C A L I F O R N I A 25

B

B e cause the State must refund the $36.2 million i n overpay ments, we nex t c o n s i d er whether the d istrict court correctly held that the State had w a ived its Eleventh Amendment sovereig n immunity in this case to permit such relief.

“[ T] he rule has evolved that a s u i t by private parties seeking to impose a liability which must be paid from public funds in the state treasury is barr e d b y the Eleventh Amendment.” Edelman v. Jordan

, 415 U.S. 651, 663 (1974). The Supreme Court h as ex tended this b ar to suits broug ht b y Native A merican tribes even though t hey are sovereig ns in their own rig ht. See Blatchford v. Native Vill. of No a t a k

, 501 U.S. 775, 779–82 (1991). I n E d e l m an , the Court made clear that a state’s sovereig n i m m u nity ex tends even to equitable judg ments, particularly if “the award r esembles far

more closely the monetary award ag ainst the State itself

. . . than it does the prospective injunctive relief . . . .” 415 U.S.
at 665. The Court specifically rejected an individual’s c laims for “equitable restitution” b ased on the s t a t e’s wrong f ul withholding o f benefits under a public aid prog ram. Id. at 656, 665. Thus, the Court h eld only prospective, nonmonetary relief ag ainst state off i cials is ex empt f

rom the Eleventh Amendment bar. Id. at 677.

“However, there are ex c e ptions to this g eneral bar.” N.E. Med. Servs., Inc. v. Cal. Dep’t Health Care S ervs. , 712 F .3d 461, 466 ( 9th Cir. 2013). T he Supreme Court discussed o ne such ex ception at l e n gt h i n Edelman

— waiver. 415 U.S. at 671–74. Edelman r ecog n iz ed that Cong ress may abrog a te a

s t a tes’ sovereig n immunity via a clear, ex press leg islative statement, or a state may enter a “compact” by which the stateP A U M A V

. S T A T E O F C A L I F O R N I A 26

ex p ressly and unequivocally waives its own immunity

. Id. at 672. “I n deciding whether a State has waived its constitutional p rotection under the Eleventh Amendment, we

w i ll find waiver only where stated by the most ex p re s s lang uag e or by such overwhelming implications from the tex t

as will leave no room f

or any other r easonable construction.” Id. at 673 (internal quotation and alteration omitted).

H e r e , t he State waived its Eleventh Amendment s o v e r e i g n immunity throug h an ex p licit c o n tractual waiver. T h e 1999 Compact contains a limited waiver of sovereig n immunity on b e h alf of both the State and the Tribe, which the 20 0 4 Amendment left undisturbed. I t reads in relevant part:

Sec. 9.4. L imi ted W aiver of Sovereig n I mmunity

. (a) I n the event that a dispute is to be resolved in federal court

. . . , the State an d t h e Tribe

ex p ressly consent to b e sued therein a nd waive a ny immunity therefrom that they may have provided that:

(1) The dispute is limited solely to issues arising under this Gaming Compact;

(2) Neither side makes any clai m f o r monetary damag es ( tha t is, only injunctive, specific performance, including enforcement of a provisi o n o f this Compact requiring
pay men t of money to one o r another of the parties, or declaratory

relief is soug ht); . . . .P A U M A V

. S T A T E O F C A L I F O R N I A 27

This is an ex p ress waiver that falls within the ex ception to the Eleventh Amendment delineated in Edelman —but the parties dispute the scope of the waiver. W e must determine whether the ex c lusion for mone t a r y damag es in Section 9.4(a)(2) includes authoriz ation to s e e k the remedy of rescission a nd restitution.

W e hold that the proper remedy here does not trig g e r the

ex c lusion provision, and thus the Sta t e w aived its sovereig n immunity for Pauma’s misrepresentation claim. W e beg in b y analy z ing t h e lang uag e of the contract itself. See Colusa II
, 618 F .3d at 1073. The contract u a l l a ng uag e establishes a

c l ear dichotomy between claims for monetary damage s

— which are ex cluded and thus b arre d by sovereig n immunity —and equitable relief. Althoug h restitution may be considered a leg al or equit a b l e remedy

, see Restatement (Third) of Restitution § 4(1); D an B

. Dobbs, Law of Remedies § 4.1(1) (2d ed. 1993), interpreting the contract as a whole demonstrates that restitution was contemplated by the parties

a s a potential remedy for which sovereig n immunity was waived. Thus, we h old that restituti on is included in the waiver “by such overwhelming implications from the tex t a s will leave no room for any other reasonable construction.” Edelman

, 415 U.S. at 6 73 (i nternal quotation and alteration omitted). 1 0

10 T h e d istrict co u rt relied

, as P au m a d o e s o n ap p eal, o n Bo w en v. M a ssa ch usetts , 4 8 7 U.S. 8 79 (1 9 8 8 ), f o r th e d istin ctio n d raw

n b etw e e n

m o n etary d am ag es aw ard s (m ean t to co m p en sate f o r an in j u ry ) an d
sp ecif ic m o n etary relief (m ean t to rein s tate o n e to h is o r h e r o rig in al
p o sitio n ). Id

. at 8 9 3

. B u t Bo wen s im p ly reaf f irm s tw o stead f

ast p rin cip les: (1 ) eq u itab le relief

, w h i ch m ay tak e th e f

o rm o f m o n ey , is d if f eren t th an m o n etary d am ag es; an d (2 ) w h en Co n g ress h as sp ecif

ically
p ro v id ed a w aiv er o f so v e r e i g n i m m u n ity i n a statu te th at allo w s f or eq u itab l e relief (th ere, th e A d m in istrativ e P ro ced u re A ct (“ A P A ”)), th atP A U M A V

. S T A T E O F C A L I F O R N I A 28

“ A w r itten contract must be read as a whole a nd e ve r y part interpreted with reference to the whole, with preference
g iven to reasonab l e interpretations.” W apato Heritage, L.L.C. v. United States
, 637 F .3d 1 033, 1039 ( 9th Cir. 2 011) (internal quotation omit ted); see Restatement (Second) o f Contracts § 202(2). Here, r e a ding the contract as a whole, the present restitutionary

order falls well within the waiver.

The waiver applies “provided th a t

. . . [ n] either side makes an y c l a im f

o r monetary d amag es (that is, only injunctive, specific performance, including enforcement of a provision of this Compact requiring payment of money to o ne or another of the parties [ which must mean either Pauma or the State]
, or declaratory relief is soug ht)

. ” This clause envisions pay

ment o f m oney to either party , and y et the Compact does not contain any provisions requiring pay ment of money f

rom the State to the Tribe. 1 1 I f this clause did not

m ay o ccasio n ally in v o lv e sp ecif ic relief in t

h e f o rm o f m o n ey

. Ho w ev er, th o se p ro p o sitio n s d o n o t a n sw er th e co n tractu al in terp retatio n q u estio n p resen t ed h ere.

W e h av e alread y stated th at Bo wen d o es “ n o t im p licate E l e v en th A m en d m en t co n cern s” sin ce it o n ly an aly zed t h e statu t o ry lan g u ag e o f th e A P A

. Na tive Vill. o

f N o a ta k v. Bla tch

fo rd

, 3 8 F.3 d 1 5 0 5
, 1 5 1 3 (9 th Cir. 1 9 9 4 ). Fu

rth erm o re, alth o u g h Bo wen cited a p p ro v in g ly co n tract cases

aw ard in g sp e c i fi c perf

o rm an ce, th o se cases all d ealt w ith a brea ch of

co n tract issu e an d en f o rcem en t o f a co n t

ra ct p ro visio n to p ay

m o n ey

— n eith er o f w

h ich ex ist in t

h e p resen t case. Co n seq u en tly

, Bo w en sh ed s lig h t o n th e c u r r e n t case o n ly to th e ex ten t i t rein f o rces ou r

co n clu sio n th at restitu

tio n o f th e m o n ey w

ro n g fu l ly p aid b y P au m a m ay still b e a w a r d e d a s an eq u itab le rem ed y an d i s n o t a claim f o r m o n etary d am ag es ag ain s t th e State.

1 1 T h e State itself

asserts th at n o p ro v isio n in th e co n tract req u ired it to p ay P au m a m on ey w

h en arg u i n g th at sp ecif

ic p erf o rm an ce w as th e w

ro n gP A U M A V

. S T A T E O F C A L I F O R N I A 29

contemplate the restitutionary remedy ordered by the district
court a nd affirmed herein, then the p rovision would be operative only as to one party , n ot both. Ex cluding restitution

as a remedy that the Tribe could seek under this waiver would

ren d e r this clause null and void. Cf. 11 W illiston on Contracts § 32:5 (4th ed. 2 0 1 5 ) (“An interpretation which
g ives effect to all provisions o f the contract i s preferred to

one which renders p art of the w riting superfluous, useless o r in e x p licable.”). W hen “that is” is construed to limit w aiver only as to the remedies listed, as u r g ed by the dissent, the restitution remedy ordered by the district court still f alls within that restrictive interpretation. Thus, the district court properly held that restitution by the State of overpay ments b y the Tribe was included in the waiver.

I n sum, the co n t ractual waiver clearly envisions restitution as falling within its purview, and only actions for monetary damages or a c tions not aris i n g from the Compact itself to be ex cluded. T h e proper reme d y for Pauma due to the State’s misrepresentation o f the number of l icenses available under the 1999 Compact’s formula is rescission of th e 2004 Amendment and restitution for the o verpay ments made. Therefore, the State contractually waived to this ex tent its Eleventh A mendment sovereig n immunity and Pauma was not barred from bring ing its misrepresentation claim seeking rescission and restitution. 1 2

rem ed y

. T h at arg u m en t cu ts ag ain st th e State h ere g i v en t h e l an g u ag e of th e ag reem en t.

12 In an y ev en t, Calif

o rn ia—u n lik e m an y states—h as ch osen to leg i slativ ely en act a b ro ad statu to r y w a i v er o f so v ereig n i m m u n ity f or claim s arisin g o u t o f v io latio n s o f IGRA

. S ee Cal. Go v ’ t Co d e § 9 8 0 05 ; Ho tel Emp s. , 2 1 Cal. 4 th at 6 1 5

. B ecau se w e f in d th e co n tractu al w aiv er to in clu de th e restitu tio n ary rem ed y so u g h t an d reco v ered h ere, w e n eedP A U M A V

. S T A T E O F C A L I F O R N I A 30

V

On c ross-appeal, Pauma asserts the district court erred b y deny ing summary judg me n t on the Tribe’s fifth and six th claims for relief—sty

led a s bad faith/I G RA violation claims. Pauma provides a leng thy and fact-intensive ex planation why it thinks the State acted in bad faith with respect t o t h e entirety of their course of dealing s over the last fifteen y ears. The Tribe relies heavily upon our recent decision in R incon
, involving a different California tribe, that upheld a finding o f bad faith u nder I GRA. However, in t h e p rocess, Pauma ig nores the ex plicit statutory lang uag e of I GRA u n der which it seeks r elief. The district court held Pauma’s I GRA c laims

were moot be cause rescission of the 2004 Amendment h ad already been g ranted, 1 3 judicially e stopped as inconsistent

n o t reach w h eth er t

h e statu to ry w aiv er w o u ld also ap p ly

. W e d o n o te, h o w ev er, th at o u r ru lin g is su pp o rted by th e C a l i f

o rn ia Su p rem e Co u rt,

w h ich u p h eld t h e co n stitu

tio n ality o f t

h e w aiv er p ro v isio n co n tain ed in th e ref eren d u m b y th e p eo p l e. Ho t el Emp s. , 2 1 Cal. 4 th at 6 1 5

.

13 Neith er o f th e p arties b rief ed th is issu e so w e n eed n o t reach it, bu t w e also n o te th e district co u rt’ s an aly sis is su p p orted b y o u r r e c e n t en b an c d ecisio n in Big La g o o n Ra n ch eria
, 7 8 9 F .3 d at 9 5 5 (h o ld in g th e t r i b e ’s

cro ss- ap p eal w as m o o t reg ard in g bad f aith claim sin ce th e d istrict co u rt h ad ru led in th e trib e’ s f

av o r o n o th er g ro u n d s).P A U M A V

. S T A T E O F C A L I F O R N I A 31

w i t h P auma’s earlier position, 1 4 and barred by the plai n lang uag e of the I GRA statute. W e affirm on the last g round.

The plain lang uag e o f I GRA does n ot support Pauma’s
arg ument. I GRA states that a Native American tribe “ s h a l l request” a state to e nter into neg otiations for the purposes of entering a Tribal-State Gaming Compact, and “ [ u] pon receiving such a request, the State shall n e g otiate with the I ndian Tribe in good faith t o enter into such a c ompact.” 25 U.S.C. § 2 710(d)(3)(A) (emphasis added). I n order to g ive effect to this lang uag e, the statute vests federal district courts with j u r isdiction over “any cause of action initiated by an I ndian tribe arising from the failure of a State to ent e r i nto neg otiations with the I ndian tribe for the purpose of entering into a Tribal-State compact under p arag r aph (3) or to conduct

14 Pau m a’ s claim s are n o t in co n sisten t, as th e d i s t r i c t c o u rt f o u n d

. A lth o u g h P au m a d i d n o t u se th e w o rd s “ b ad f aith ” in t he b o d y o f its

co m plain t w ith resp ect to t

h ese IGRA claim s, it relied h eav ily o n Rin co n ’ s h o ld in g th at t

h e State’ s req u est f

o r 1 5 % o f th e tri b e ’s n e t w i n s in its
p ro p osed 2 0 0 4 A m en dm en t w as an im p erm issib le tax u n d er IGRA an d th at th e State th u s n eg o tiated in b ad f aith w h en it ref u sed to rem o v e th at p ro v isio n

. Rin co n , 6 0 2 F.3 d at 1 0 2 4 –2 5
, 10 3 6, 1 0 4 2

. W e did n o t ex p ress

an op i n io n as to th e v alid i ty o f th e p ro v isio n f o r th e f i v e trib es, i n clu d in g P au m a, w

h o s u ccessf

u lly n eg o tiate d a n d o b t ain ed a 2 0 04 A m en d m en t b ecau se th eir Co m

p acts “ w ere satisf

acto ry to th em ” an d th e trib es f

reely

en tered in to th e am en d m en ts. Id

. at 10 3 7 n .1 7. S i n c e P au m a h ad th e

sam e p ro v isio n in its 2 00 4 A m en d m en t th at w as at issu e in Rin co n , P au m a arg u es th at th e sam e resu lt sh o u ld b e ap p lied in its case.

T h e d istrict co u

rt also fo u nd th at P au m a w as req u estin g d if f eren t relief

, b u t i n f act P au m a h ad been req u estin g “ re fo r m a tio n ” b ased on IGRA clai m s fi v e an d six in th e co m p lain t f ro m th e b eg in n in g

. P au m a

m erely req u ested “ rescissio n ” an d “ restitu tio n ” in ad d itio n , w ith claim ten ( m i srep resen tatio n ) p ro v i d in g a b asis f o r su ch relief

. T h u s, P a u m a ’s claim s in its co m

p lain t an d su

m m a ry j u d g m en t m o tio n are n o t in co n sisten t

.P A U M A V

. S T A T E O F C A L I F O R N I A 32

such neg otiations in good faith [ .] ” I d

. § 2710(d)(7)(A)(i) (emphasis added).

The nex t subsection d es c r i b es , in detail, the procedure a tribe must follow if a state d oes not adhere to these mandates. Id. § 2710(d)(7)(B ). Specifically

, the Native American tribe
must first introduce evidence that “a Tribal-State compact has
not been entered into under parag raph (3),” and “the State did
not respond to the request of the I ndian tribe to neg otiate such

a compact or did not r espond to such request in g ood faith[ .] ” Id. § 2710(d)(7)(B )(ii)(I ), (I I ) (emphasis a dded). Then, I GRA provides a remedy if such a n event should occur: “I f

. . . the
court finds that the State has failed to n eg otiate in g ood faith with the I ndian tribe to c o n c l ude a T ribal-State compact governing the conduct of g aming activities, the court s h a l l order the State and the I ndian Tribe to conclude such a compact within a 60-day period.” Id. § 2 7 1 0 (d)(7)(B )(iii) (emphasis added). T h is same section also lists factors a court may consider when determining w hether a State has
neg otiated in g ood faith. Id.

The detaile d procedures set forth in I GRA allow for redress by Native American tribes when a S t a t e refuses to neg otiate or neg otiates in bad fai t h for a g aming Compact. These procedures, b y their own langu a ge , simply do not apply when the State and the Tribe have actually reached a Compact

. See id. § 2710(d)(7)( B) (i i )(I ). Rincon d oes not hold o ther w i s e

. Cf. 602 F .3d at 1026. The Rincon tribe (Pauma’s nearby competitor in San Dieg o) also entered into
neg otiations w ith the State in 2003 and 20 04—but Rincon refused to sign an actual amended Compact with the State a nd fil e d s u i t instead. Id. at 1023, 1026; see a lso Big Lagoon R a n c h e r ia
, 789 F

. 3 d at 951–52; In re Indian Gaming
, 331 F .3d at 1110 (holding the St a t e d i d not neg o tiate in b adP A U M A V

. S T A T E O F C A L I F O R N I A 33

faith with respect to the 1999 Compact’s revenue provisions,

w h i c h t h e tribe refused to sig n). Pauma is thus in a ve r y differe n t position than the Rincon tribe because it actually

a greed to the 2004 A mendment and did not challeng e t h e neg otiation process under I GRA.

Therefo r e , the district court correctly concluded: “Althoug h [ ] I GRA may allo w a court to reform or rescind

an unlawful ag reement (which is what Pauma want e d u n t il now), it d oes not allow the Cour t t o t u r n back the clock a nd compel re-neg otiation of an ag reement actually r eached ten
y ears ag o, let alone one that h as been r escind e d a n d never would have been neg otiated in the f i r st place in lig ht of the rel i e f the Court has a lready g ranted in this case.” The relief Pauma seeks in its c ross-appeal is not avai l a b le under the pl a in statutory lang uag e of I GRA, and w e affirm the district court’s denial of Pauma’s summary judg ment motion on this
g round.

VI

I n conclusi o n , we hold that once a court’s judg ment interpreting an ambig uous contract provision becomes final, that is and has alway s b een the correct interpretation from its inception. As such, the State in n o c e n t ly misrepresented a material fact when it erroneously informed Pauma the 1999 Compact’s license p o o l had been d epleted based o n its mi s c a l culation of the formula. Since this misrepresentation induced Pauma to enter into the much more ex pensive 2004 Amendment, the T r ibe is entitled to rescission o f the amendment a

nd restitution for the $36.2 million in
overpay ments made to the State. The Eleventh Amendment does not bar this suit because the State contractually waived its sovereig n immunity for claims arising out of the CompactsP A U M A V

. S T A T E O F C A L I F O R N I A 34

seeking such relief. F inally

, Pauma is n o t e n titled on crossappeal to seek redress u nder I GRA because the plain lang uag e of the statute preclud e s re l ief when the Tribe a nd the State actually

enter into a Compact. 1 5

AF F IRMED. Each party shall bear its own costs.

J ARVEY, Chief District J u dg e, dissenting :

I ag ree w ith the majority ’s conclusion that cou rts determine contracting parties’ inten t a s of the time the
contract is ex ecuted. I d isag ree, however, that California committed t h e tort of misrepresentation by interpreting the Compact differently than a later court dec i s i o n

. The provision reg arding the number of a vailable licenses in the Compact was hopelessly ambig u ous. California, the compacting tribes, the district court and this court a ll interpr e t e d it differently

. That this court’s opinion differed from that offered b y California does not e stablish that California made “an assertion that [was] not in a c cord with the facts” as they ex isted at the time the assertion was made. R E S T A T E M E

N T (S E C O N D ) O F C O N T R A C T S § 159 & cmt. c.

The decision in Colusa II w a s not the result of any j u d i cial fact finding

. I n fact, this court rejected the parti e s ’

15 P au m a m ak es co n clu so ry ref eren ces to th e claim s it ad v an ced in i t s

m an d am u s p etitio n , ask in g th e co u rt to v acate th e m ag istrate j u dg e’ s o rd er d en y in g P au

m a’ s m otio n to co m

p el d isco v ery an d to reassig n th e case to

a d if f eren t d istrict co u rt j u d g e b ased o n h er h an d lin g o f th e IGRA claim s. W e d en y b o th o f t

h ese req u ests as m o o t in lig h t o f o u r h o ld i n g f oreclo sin g f u rth er p u rsu it o f

P au m a’ s claim s u n d er IGRA

.P A U M A V

. S T A T E O F C A L I F O R N I A 35

ex trinsic evidence for contract inter p r e t ation purposes a

nd d etermined the number o f available licenses as a matter o f law. B ecause ex trinsic evidence was rejected and the number determined as a matter o f law, all parties to the Compact were

on equal foot ing with respect to their a b ility to interpret this ambig uous provision. T h e m aj ority is correct when it notes that any party could have sued to g et more clarity

. The tribes in Colusa II did, but the p l a i n t i f f here chose instead to

ne g o t iate for the possibility of receiving more licenses than have ever been available under the 1999 Compact. 1

On the misrepresentation issue, Curtin v. U nited Airlines, Inc.
, 275 F .3d 88 (D.C. Cir. 2001) is analog ous and persuasive. C u rtin involved a p rovision of the W arsaw Convention (a treaty

) that established the compensation to be paid by a carrier when passeng ers’ lug g ag e w a s lost during international travel. The W arsaw Convention provided for a pay ment of $9.07 p e r pound up to the max imum of a seventy pound b a g , or $635. United Airlines h a d a practice of pay ing the max imum amount ($635) for lost interna t ional lug g ag e rather than weig hing the bag s and pay ing the $9.07 price per pound for t h e l ost lug g ag e. That practice had been interpreted by some c o urts as permissible, and by others a s impermissible. Ultimately , the District of Columbia Circuit Court of A ppeals rejected the practice, holding that the W a r saw Convention did not cap liability at $6 3 5 w h ere the carrier had failed to weig

h the bag s as required.

I n Curtin
, pa sseng ers who had settled their lost lug g ag e claims fo r $ 6 3 5 sued claiming

, among other thing s, that the

1 I f i n d it m ore th an

iro n ic th at P au m a h as receiv ed m o n etary d am ag es

as a resu lt of Co lu s a I

I t h a t w ere d en ied to th e trib es th at w o n th at d ecisio n . I f

in d it in eq u itab le.P A U M A V

. S T A T E O F C A L I F O R N I A 36

s e t t l e m e n t agr e e m e n t s w e r e p r o c u r e d b y U n i t e d ’s misrepresentation of its oblig at i o n under the W arsaw Convention, as later determined by the Court of A p p eals. H o wever, the District o f Columbia Circuit held that Un i t e d did n ot make a misreprese n tation by reasonably interpreting the W arsaw Convention differently than the later Dis t r i ct o f C o l u m b ia Court of Appeals decision. This decision i s sensible, intuitive and ana l o go us to what happened in the
matter no w b e fore the court. B ecause I believe that the State’s interpretation of this a mbig uous contractual provision does not qualify under the common law definition of a material misrepresentation, I respectfully

dissent.

I also do n ot believe that the St a t e of California waived sovereig n immunity with res p e ct t o this claim. The 1999 Compact waives immunity as follows:

Sec. 9.4. L imited W aiver of Sovereig n I mmunity

. (a) I n the event that a dispute is to be resolved i n federal court

. . . , the State and the Tr i b e

ex p ress l y c onsent to be sued therein a nd waive any

immunity

therefrom that they may have provided that:

(1) The dispute is limited solely to issues arising under this Gaming Compact;

(2) Neither side m a kes any claim for monetary damag es ( that i s, only injunctive, specific performance, including enforcement

o f a provision of this Compact requir i n gP A U M A V

. S T A T E O F C A L I F O R N I A 37

p ay ment of money to one or another of the parties, or declaratory

relief is soug ht); . . . .

I ag ree with the majority t hat the remedy of specific performance is not available in this c ase. The majority upholds the award as restitution, c oncluding that the Compact waives immunity ag ainst claims f or restitution beca u s e the Compact waives immunity ag ainst claims f or “sp e cific performance, including pay ment of money

to one or another of the p arties.” I disag ree w ith the majority ’ s reading of the waiver.

The limited waiver of sovereig n immunity is well drafted and clear. I t states that neither side can make a claim for monetary d amag es. I t then d e f i n es the waiver, beg inning with the words “that is.” The phrase “that is” is c o m m o nly thoug ht of as a shorthand version of the phrase “ t h a t i s to say .” I t is used to p r eface a more specific delineation of the preceding contractual lang uag e. H ere, to further clar i fy the limitation of the waiver, the parties stated, “that is, o nly injunctive, specific performance, including enforcement of a provision o f this Compact requiring pay ment of money to o ne

or another of the parties, or declaratory r elief is soug ht

. . . . ” (emphasis added). The use o f t he word “only ” is routinely defined to mean alone, solely or e x c l u s ively

. The waiver’s applicability is therefore ex plicitly confined to the circumstances listed.

The major i t y infers a waiver of sovereig n immunity for restitution from a canon o f contract interpretation that prefers interpretations that do not render other terms “ s u p erfluous, useless or inex plicable. ” I t finds that reading the lang uag e “including pay

ment of money to one or another of the parties” as allowing monetary pay ment only in the contex t o fP A U M A V

. S T A T E O F C A L I F O R N I A 38

specific performance would render the clause superfluous because the C o m p act’s pay ment provisions run only from Pauma to the State. B u t this r e a ding d isrega r d s the ex plicit
te x t o f the clause. The clause makes clear that the parties intended “specific performance” to include mo n e t ary pay ments only when the Compact requires th e m. This lang uag e is the p a r ties’ clear recog nition of Bowen v

. Massachu s e t t

s , 487 U .S. 879 (1988), which held that a monetary p ay

ment can constitute specific performance when

a contractual clause requires such pay ment. The fact that the waiver includes specific performance of pay ment provisions does not render it superfluous, useless or inex plicable simply because those particular oblig ations run only from Pauma to the State. I t would b e helpful in the event of that kind o f breach by Pauma.

The monetary damag es awarded here do not qualify a s injunctive, specific performance or d e c l aratory relief. B ecause the law demands that w aivers of sovereig n immunity ordinarily derive only from “the most e x p r ess lang uag e” o r “such overwhelming implications from the t ex t as [ will] leave

no room for any other reasonable construction,” there can be

no waiver found here. Edelman v. Jordan

, 415 U.S. 651, 673 (1974) (citation and interna l quotation marks omitted) (alteration in orig inal). The ex pr es s l ang uag e o f the sovereig n immunity does not include suits for restitution, a nd in fact, e x plicitly ex c lude s suits for monetary damag e s outside the contex t of specific performance. I find n o o ther implications from the tex t, a n d certainly not overwhelming implications, of sovereig n immunity

waiver.