NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

GUIDIVILLE RANCHERIA OF CALIFORNIA,

Plaintiff

- Appellant,
UPSTREAM POIN T MOLATE, LLC,
Plaintiff

- Counter

D efendant

- Appellant,

v. UNITED STATES OF AMERICA; RYAN ZINKE , Secretary of the Interior; MICHAEL S. BLACK, Acting Assistant Secretary

- Indian Affairs,

Defendants,
and CITY OF RICHMOND, Defendant

- C ounter C laimant

Appellee. No. 15

- 15221
D.C. No. 4: 12

- cv - 01326

- YGR

MEMORANDUM 

 This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3. 

# FILED

AUG 4 2017 MOLLY C. DWYER, CLERK U.S. COURT OF APPEAL S2

GUIDIVILLE RANCHERIA OF CALIFORNIA,

Plaintiff

- Appellant,
and UPSTREAM POINT MOLATE, LLC,
Plaintiff

- C ounter D efendant,

v. UNITED STATES OF AMERICA; RYAN ZINKE , Secretary of the Interior; MICHAEL S. BLACK, Acting Assistant Secretary

- Indian Affairs,

Defendants,
and CITY OF RICHMOND, Defendant

- C ounter C laimant

Appellee. No. 15

- 17069
D.C. No. 4:12

- cv - 01326

- YGR

Appeal from the United States District Court for the Northern District of California Yvonne Gonzalez Rogers, District Judge, Presiding Argued and Submitted February 14, 2017 San Francisco, California3

Before: GOULD and BERZON, Circuit Judges, and G ARBIS , * * District Judge. This appeal presents a dispute between the City of Richmond, California (“the City”), a developer, Upstream Po int Molate, LLC (“Upstream”), the Guidiville Band of Pomo Indians (“the Tribe”) , and the United States 1 in connection with a proposed development project for Point Molate, the site of a decommissioned United States Navy fuel depot located on the coast of the City. Upstream and the Tribe have sued the City for breach of the Land
D isposition Agreement (“LDA”) between Upstream and the City, as well as for
breac h of the implied covenant of good faith and fair dealing

. The district court granted the City’s Motion for Judgment on the Pleadings and dismissed the breach
of contract and bad

- faith claims , denied Appellants leave to amend, and awarded the City legal fees from the Tribe and Upstream

. The district court then entered an

* * The Honorable Marvin J. Garbis, United States District Judge for the District of Maryland, sitting by designation.

1 The Tribe also asserts federal claims against the United States pertaining to the denial of approval of federal gaming authorization under the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 et seq. The district court has stayed proceedings regarding the Tribe’s claim against the United States pending resolution of the instant appeal.4

amended judgment, finding no just reason for delay pursuant to F ederal Rules of
Civil Procedure 54(b). We have jurisdiction under 28 U.S.C. § 1291

. As discussed herein, we affirm the di smissal of certain of Appellants ’ claims, reverse the dismissal of certain of Appellants’ claims , and remand for further proceedings.
1
. Breach of Implied Covenant of Good Faith and Fair Dealing
. The
district court erred in concluding that Appellants failed to plead a plausible claim
of bre ach of the implied covenant of good faith and fair dealing. “Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” Carma Developers (Cal.), Inc. v.
Ma rathon Dev. California, Inc. , 826 P.2d 710 , 726 (Cal. 1992) (quoting
Restatement (Second) of Contracts § 205). “ In the case of a discretionary power, it has been suggested the covenant requires the party hol ding such power to exercise it ‘ for any purpose within the reasonable contemplation of the p arties at the time of
formation

— to capture opportunities that were preserved upon entering the contract, interpreted objectively. ’ ” Id. at 727 (quoting Steven J. Burton, Breach of
Contract and the Common Law Duty to Perform in Good Faith , 94 Harv. L. Rev. 369, 373 (1980)).5

The Third Amended Complaint (“ TAC ”) contains plausible allegations that the City violated the implied covenant of good faith and fair dealing by i nterfering

w ith Appellants’ ability to obt ain federal approval for the casino , thereby preventing Appellants from satisfying a condition precedent of the LDA

. The TAC allege s that , beginning in 2009, the City , through Mayor Gayle McLaughlin, contacted the B ureau of Indian Affairs , Contra Costa County, and various public officials including the Governor of the State of Californ ia and
United States Senator Dianne Feinstein , to encourage them to deny, delay, or otherwise oppose the Tribe’s quest to obtain the necessary federal and state approvals for gaming. Appellant s allege that this pressure delayed the federal approval process

— a condition precedent of the LDA

— sufficiently that the City abandoned the project in April 2011 in part because “[w]ithout these Federal approvals, a casino use at Point Molate is not legally permitted.” R esolution No.
23

- 11 ¶ 5. Appellants further allege that the City’s pressure ultimately l ed the
D epartment of the Interior (“D OI ”) to determine in September 2011 that the Point
Molate property was not eligible for gaming.
On April 5, 2011 , the City issued Resolution 23

- 11, determining that a
casino use was not allowed at Point Molate. In Resolution 23

- 11 , the City cited the federal g overnment’s delay in granting the approvals and t he opposition of other6

government officials as reasons for it s denial

. Appellants contend that the City acted in bad faith, as the delay in approvals and the opposition of federal officials were induced by the City’s own covert lobbying

. Under the “ doctrine of prevention, ” if a contracting party interferes with the performance of a condition precedent in a way that the parties did not reasonably contemplate, then the interference is a breach of the implied covenant of good faith and fair dealing, and the interfering party “cannot in any way take advantage of
that failure [of the condition precedent] .” 13 Williston on Contracts § 39:3 (4th
ed. ) ; s ee also City of Hollister v. Monterey Ins. Co. , 81 Cal. Rptr. 3d 72, 100 ( Cal. Ct. App. 2008), as modified on denial of reh’g (Aug. 28, 2008)

. “The implied covenant of good faith and fair dealing requires a promisor to reasonably facilitate the occurrence of a condition precedent by

. . . refraining from conduct which would prevent or hinder the oc currence of the condition . . . .” Westerbeke Corp. v.
Daihatsu Motor Co. , 304 F.3d 200, 212 (2d Cir. 2002) (quoting Cauff, Lippman & Co. v. Apogee Fin. Group, Inc. , 807 F. Supp. 1007, 1022 (S.D.N.Y. 1992)). Appellant s allege in the TAC that the parties to the LDA did not contemplate that the City would directly attempt to oppose or interfere with the Tribe’s gaming application and Req uest for a Land Determination. Whether the City is liable for
the Mayor ’s actions depends on whether she acted in her off icial capacity, which is7

ordinarily a question of fact better resolved after discovery and not through a Motion for Judgment on the Pleadings

. See Farmers Ins. Grp. v. Cty. of Santa
Clara , 906 P.2d 440 , 458

– 59 (Cal. 1995).
The TAC contains some of the alleged interfering communications from Mayor McLaughlin wherein she identifies herself as the Mayor acting on behalf of the City of Richmond

. These allegations present an issue of fact concerning whether the Mayor was acting in her official c apacity and are sufficient to plead a plausible claim of breach of the implied covenant of good faith attributable to the City

. See Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes , 120 Cal. Rptr. 3d 797, 803 ( Cal. Ct. App. 2010) (“The Develop er established a breach attributable to the Town by evidence of the actions of town officials, acting within their authority.”). Therefore, the City is not entitled to judgment on the pleadings on the theory that it is not responsible for the actions of t he Mayor.
We also disagree with the district court’s conclusion that the waiver provision in the Sixth Amendment to the LDA precluded a claim based on the Mayor’s actions. Th at Amendment, executed May 18, 2010, states, “[N]o event of default under the LDA exists as of [May 18, 2010], and that no event has occurred which, with the passage of time or the giving of notice, or both, would constitute an event of default.” Sixth Amendment to the LDA, § 5.8

However, to the ext ent that there may have been a waiver of de fault claims,
the waiver would not apply to the alleged actions causi ng defaults after May 18,
2010. At least two of the Mayor’s allegedly improper actions , as well as the City’s disapproval of the casino project , occurred after May 18, 2010. 2 Therefore, the City is not entitled to judgment on the pleadings by virtue of the waiver provision
in the Sixth Amendment.
We therefore conclude that the TAC states a plausible claim that, by preventing the occurrence of t he condition precedent and relying partially on the

non - occurrence to deny the casino project and avoid carrying out the purpose of the LDA, the City breach ed the implied covenant of good faith and fair dealing when it promulgated Resolution 23

- 11 and discontinued consideration of a casino
use for Point Molate

.

2 Specifically, these included a June 1, 2010 letter to several U.S. Senators lobbying them to deny the Tribe’s application, and an Au gust 15, 2010 speech at a conference of the U nited States Representatives regarding Indian Gaming, where Appellants allege that “Mayor McLaughlin in her official capac ity of Mayor, expressly advanced the City’s position the Tribe’s Land Determi nation Request should be denied . . . . ” TAC ¶¶ 63

- 64.9

2 . Breach of Express Terms of Contract. Appellants also claim that the City breached the express terms of § 2.8 of the LDA, 3 which states:
If it is d etermined that the development of Indian gaming uses on the Property is not commercially feasible or not legally permitted, the Developer may purchase and lease the Property without any involvement by any Native American tribe, and, prior to the Closing Da te, the Developer and the City shall negotiate exclusively in good faith for a period not to exceed one hundred twenty (120) days with respect to an alternative development proposal. LDA § 2.8 (emphasis added). We agree with the district court that the TAC’s allegations regarding breach of express terms of contract were conclusory and unsupported by any specific allegations

. Appellants , however, should have been permitted to augment these allegations in a Fourth Amended Complaint

. 3 . Leave to Amend. The district court abused its discretion in denying Appellants’ motion for leave to file the Proposed F ourth Amended Complaint (“FAC”)

. In the Proposed FAC, Appellants added non

- conclusory, factual allegations regarding the 120

- day negotiation period. Ap pellants’ new allegations

3 Appellants also contend that the City violated the Sixth Amendment to the LDA by failing to give “equal consideration t o each project alternative identified in the [Final Environmental Impact Report] .” Sixth Amendment to the LDA, § 3(c). Since Appellants did not raise this issue in the district court or in the TAC, it will not herein be considered.10

plausibly state that the City was merely going through the motions of negotiating. The Proposed FAC states that City representatives would come to negotiation meetings only “to listen,” that the City repeatedly failed to respond to Upstream’s substantive questions concerning the City’s goals or preferences for the project, and that during the negotiation period the City filed a lawsuit against Upstream seeking declaratory relief that it had no further obligations under the LDA,
in cluding Section 2.8. 4 FAC ¶¶ 89

– 90, 94

– 95, 98, 106

– 07. While the City was contractually free to reject Upstream’s proposal, the City’s mere attendance at meetings and correspondence with Upstream is not per

se good faith negotiation. See Placentia Fire Fighters v. City of Placentia , 129 Cal. Rptr. 126, 136 ( Cal. Ct. App. 1976) (“Consequently, to sit at a bargaining table, or to sit almost forever, or to make concessions here and there, could be the very means by which to conceal a purposeful strategy to make bargaining futile or fail.”).

4 Upstream also alleges that, unlike past negotiations over LDA amendments, the City’s attorneys attended the meetings instead of the City Council members, and that in every other project considered by the City during the same time period, the City issued a Statement of Overriding Consideration or Mitigated Negative Declaration to approve the project despite findings of adverse negative impacts. FAC ¶¶ 115, 120.11

When taken in a light most favorable to Appellants, the TAC plausibly alleges that the City did not negotiate in good faith. Accordingly, the Order Denying Leave to Amend is r eversed, and Upstream may file the Proposed FAC

. 4. Attorneys’ Fees
. In light of the reversal of the district court’s d ismissal, the district court’s o rder on attorneys’ fees is vacated. However, we conclude that
the district court correctly determined that the Tribe waived its sovereign immunity and would not be exempt from a future attorneys’ fees award

. The Tribe asked, as part of its requ ested relief, that the district c ourt grant

“ [a]n award of damages against the City of Richmond for . . . cost of suit, including reasonable attorneys [ ’ ] fees and costs as permitted by law.” TAC at 38. Thus, attorneys’ fee s was one of the issues that the Tribe expressly requested the
district c ourt to resolve and put under its jurisdiction. Cf. Rupp v. Omaha Indian
Tribe , 45 F.3d 1241, 1245 (8th Cir. 1995) (finding that the Tribe had waived sovereign immunity as to counterclaims when it “affirmatively requested the district court to resolve the ownership of the disputed land by asking the
defendants to assert any [claims] they may have in the disputed lands ”)

. Once the Tribe consented to federal court jurisdiction over the attorneys’
f ees issue, it was bound by the district c ourt’s determination under California law, which applies to the Tribe as it would to any other third

- party beneficiary. See Cal.12

Civ. Code, § 1717 ; Real Prop. Servs. Corp. v. City of Pasadena , 30 Cal. Rptr. 2d 536, 541 ( Cal. Ct. App. 1994)

. For the foregoing reasons : 1. W e reverse the district c ourt’s grant of the Motion for Judgment on the Pleadings and remand the case for further proceedings regarding whether the City violated the LDA by interfering wi th the Tribe’s ability to fulfill a condition precedent

. 2. We affirm the district court’s dismissal of the express breach of contract claims

. 3. We reverse the district court’s order denying leave to amend the Proposed Fourth Amended Complaint

. Appellants may file the Proposed Fourth Amended Complaint

. 4. The district court’s amended judgment is vacated and the case i s remanded for further proceedings consistent herewith, including consideration of a legal fee award against the Tribe. The parties shall bear their own costs on appeal. AFFIRMED in part, REVERSED in part, and REMANDED.