Welsh v. Loudbear

── Welsh v. Loudbear ── Court: Court of Appeals for the Ninth Circuit Date: June 04, 2026 Category: General FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT KYLE WELSH; ESTATE OF JILL No. 25-5475 WELSH; WW YOUNG MONEY, D.C. No. LLC, doing business as Flame On 2:25-cv-01159- Indian Smoke Shop, SPL Plaintiffs - Appellants, v. OPINION REBECCA LOUDBEAR; AMELIA FLORES; JOHN YACKLEY; UNKNOWN PARTIES, Defendants - Appellees. Appeal from the United States District Court for the District of Arizona Steven Paul Logan, District Judge, Presiding Argued and Submitted March 19, 2026 Tucson, Arizona Filed June 4, 2026 Before: Michael Daly Hawkins, Andrew D. Hurwitz, and Roopali H. Desai, Circuit Judges. Opinion by Judge Hurwitz 2 WELSH V. LOUDBEAR SUMMARY * Sovereign Immunity Reversing the district court’s dismissal of a civil RICO action against three officials of the Colorado River Indian Tribes (“CRIT”), the panel held that (1) the tribal defendants were not entitled to sovereign immunity because they were sued in their individual capacities, and (2) CRIT was not a required party without whose joinder the litigation could not proceed. The panel held that Indian tribes have sovereign immunity, and tribal officials may assert the tribe’s immunity when the sovereign is the real party in interest. However, individual capacity suits for money damages related to an officer’s official duties are generally permissible. After Lewis v. Clarke, 581 U.S. 155 (2017), the relevant inquiry when determining whether tribal officials enjoy sovereign immunity is whether the remedy sought is truly against the sovereign. The panel concluded that, under that analysis, the tribal defendants here were clearly not entitled to sovereign immunity because they did not show that the remedy sought by the plaintiffs would run against CRIT or that CRIT was the real party in interest. The panel also held that CRIT was not a required party under Fed. R. Civ. P. 19(a)(1) because the outcome of the litigation would not affect its real property or contractual rights. * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.  WELSH V. LOUDBEAR 3 The panel reversed the dismissal of the complaint under Rules 12(b)(1) and 12(b)(7) and remanded for the district court to consider whether the complaint states a claim upon which relief can be granted and if not, whether leave to amend should be granted. COUNSEL William M. Fischbach III (argued), Garo V. Moughalian, and Dennis I. Wilenchik, Wilenchik & Bartness PC, Phoenix, Arizona; for Plaintiffs-Appellants. Rob R. Smith (argued) and Rachel B. Saimons, Kilpatrick Townsend & Stockton LLP, Seattle, Washington; Alexander M. Mallory, Kilpatrick Townsend & Stockton LLP, Scottsdale, Arizona; for Defendants-Appellees. 4 WELSH V. LOUDBEAR OPINION HURWITZ, Circuit Judge: This is a civil Racketeer Influenced and Corrupt Organizations (“RICO”) action against three officials of the Colorado River Indian Tribes (“CRIT”) (the “tribal defendants”). The issues for decision are: (1) whether the tribal defendants are protected by sovereign immunity; and (2) whether CRIT is a required party without whose joinder this litigation cannot proceed. We conclude that the tribal defendants are not entitled to sovereign immunity because they were sued in their individual capacities and any recovery will run against them, not CRIT. We also conclude that CRIT is not a required party. Accordingly, we reverse the district court’s dismissal of t