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El Dorado Hills woman fighting Indian tribe over home repairs

By Walter Yost - wyost@sacbee.com March 26, 2008 Sacramento Bee

When Rita Carls of El Dorado Hills sued her home builder for shoddy construction, she never imagined she'd be in a head-to-head battle with an Indian tribe over sovereign immunity.

Even more bewildering to Carls, now 69, and her family: Her home was built on nontribal land, purchased from a nontribal business, and the tribe she's fighting in court is located hundreds of miles away in Humboldt County.

Concerned that what happened to Carls could happen to any Californian, the Sacramento-based Pacific Legal Foundation, which specializes in property rights litigation, is trying to take her case to the U.S. Supreme Court. Attorneys with the foundation say Carls is a victim of tribal sovereign immunity gone awry and the case could provide the court with an opportunity to clarify the doctrine's scope.

"The implications are huge," said PLF attorney Meriem Hubbard.

But a spokeswoman for the 53-member Blue Lake Rancheria says that everything the tribe did was legal, a stance she says is backed up by every court that the suit has reached.

"Challenges to sovereign immunity go on all the time," said Jana Ganion, Blue Lake's spokeswoman.

In this instance, Ganion said, Carls chose to wage her legal battle in state courts, rather than through other available remedies -- including mediation, arbitration and tribal court

Ganion said the tribe is not above the law.

"Sovereign immunity isn't a shield. There are absolutely methods of recourse," she said.

According to the PLF, Carls purchased a home in El Dorado Hills from a non-Indian builder in 2000. When she discovered water intrusion from construction defects, she asked the builder to fix them.

But after the fixes didn't work, Carls sued in California court, only to discover that the construction company had been sold to Blue Lake Housing Authority, a business owned by Blue Lake Rancheria. The lineage of the rancheria's members include Wiyot, Yurok, Tolowa and Cherokee, according to the rancheria's Web site.

Blue Lake Housing Authority claimed it couldn't be sued in state court under the doctrine of sovereign immunity, and the court dismissed the tribe from the case. Subsequently, by a 2-1 vote, an appellate court upheld the lower court's decision, and the California Supreme Court later denied a petition for review.

Then the Pacific Legal Foundation stepped in. Hubbard said the case caught her attention because "of the huge injustice of the whole situation. I own a home, and it would be horrible if I was precluded from going to state or federal court."

"Mrs. Carls was completely blindsided," Hubbard added. "She had no idea (the construction business) had been sold."

Last month, Hubbard filed a petition with the U.S. Supreme Court asking that it overturn the California court decision.

The question she presented to the court is: "When a tribe voluntarily acquires a non-tribal business, with existing contract obligations, does sovereign immunity allow the tribe to repudiate those obligations?"

Ganion said Blue Lake Rancheria has always accepted its contractual obligations.

One of the reasons for sovereign immunity, she said, is to protect the stability of governments -- tribal or otherwise -- in terms of their finances and resources.

"The U.S. government sets down the guidelines for how tribes operate," she said.

As tribes across the state seek to diversify their economic interests, cases like Carls' might become more common.

The Humboldt County tribe, which operates Blue Lake Casino, has significantly widened its business ventures in recent years.

Since Eric Ramos, a former Silicon Valley accountant, returned to Blue Lake Rancheria in 2001 as chief financial officer, the tribe has expanded its businesses off the rancheria -- including acquisition of the company that built Carls' home as well as Mainstay Business Solutions, a Roseville employee-staffing firm.

Hubbard expects to know by the end of April whether the Supreme Court will take Carls' case.

Pete Bernardoni, Rita Carls' son-in-law and spokesman for the family, said all his mother-in-law wants to do is recover her costs.

Unable to fix her home and unable to live in it, Bernardoni said, Carls was forced to sell the house "as is" at a loss of $80,000.

"It's been a real hardship for her," he said, adding that Carls' out-of-pocket costs total over $300,000, including legal fees.

Adding to her troubles, Bernardoni said, the water intrusion caused mold throughout her former home, which caused /health problems for Carls as well as Bernardoni's two children who lived with her at the time.

Carls is now living in a new house in El Dorado Hills and is back to full health, Bernardoni said.

For more on the Pacific Legal Foundation,

go to www.pacificlegal.org. For more on Blue Lake Rancheria, go to www.bluelakerancheria-nsn.gov/index.html.

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