James Acres files suit against 17 Blue Lake tribe associates, alleging fraud, conspiracy

ENCINITAS — After nearly three years of litigation in tribal, state and federal courts, an Encinitas man may get a shot to prove in Sacramento Superior Court that he didn’t get a fair shake in a Northern California tribal court.

James Acres, 40, with help from Solana Beach attorney Ron Blumberg of Blumberg Law Group LLP, has filed a seven-count verified complaint against 17 defendants associated with Blue Lake Rancheria Tribe of Humboldt County, including 14 attorneys, a hotel CEO and a judge, claiming his constitutional due process rights were violated through brazen acts of constructive fraud, breach of fiduciary duty and conspiracy.

The lawsuit is a response to a suit filed by Blue Lake against Acres in 2015, accusing him of fraud and a breach of contract involving his company, Acres Bonusing, Inc.

Acres, who grew up near the glowing bustle of Las Vegas casinos, first got involved with the Blue Lake Rancheria Tribe through his business which provides server-based gaming apps for slot machines in tribal-owned casinos around the country.

In 2010, Blue Lake Hotel & Casino sought to increase its number of slots following a federal ruling that increased the limit for all California tribes to 60,000 machines.

Blue Lake received the additional slot licenses and ordered a server and gaming apps from Acres Bonusing for the casino’s iPad slot kiosks. Shortly after the initial sale, Blue Lake ordered 30 additional apps and a larger server from Acres.

For the next two years, Acres said, he provided Blue Lake with technical support, software updates and several new games. However, the experimental iPad machines were not well received by customers, and by 2012, Blue Lake Casino & Hotel had stopped offering iPad slots to its customers altogether.

“It was hard to get people to play it,” Acres said. “There was no bill acceptor and they had to train employees to operate them.”

Three years later in 2015, Acres received a letter from Blue Lake seeking $330,000 — $250,000 for the original cost of the machines plus interest — alleging Acres made spurious guarantees that his apps would “make them a lot of money.”

The tribe filed a lawsuit, claiming that it was fraudulently induced to enter into a business arrangement with Acres’ company resulting in a breach of contract.

“If this had been a contract with a company not associated with the (Blue Lake) tribe, it never would have gone this far,” Blumberg said. “Sovereign immunity is really at the root of what caused this to happen because they can rule with impunity.”

Tribal sovereign immunity doctrine provides Native American tribes with the same legal protections as individual states and the federal government.

In 1953, Congress passed Public Law 280, transferring criminal jurisdiction from the federal government to a handful of states located in Indian country, including California. Before PL 280, individual states had no jurisdiction over Native American activities on tribal land.

Since the passage of the law, state courts have expanded to include civil litigation, further entangling a Gordian knot of state, tribal and federal jurisdiction disputes.

“(Public Law 280) is outdated,” said Tony Brandenburg, retired chief judge of the Intertribal Court of Southern California. “Its sole purpose was to disenfranchise Native Americans.”

In January 2008, a tribal ordinance officially established the Blue Lake Rancheria Tribal Court, giving the tribe jurisdiction over civil and criminal cases.

The “exhaustion of tribal remedies” doctrine requires individuals or parties involved in a lawsuit with an Indian tribe to first “exhaust” all possible outcomes in tribal court before appealing to a state or federal court for review, according to an article published by the American Bar Association.

Blue Lake was operating within its rights to litigate with Acres, and the idea of a drawn-out legal battle against a sovereign nation had become a troubling reality for the casino-gaming entrepreneur.

“I started freaking out and even spent a night in the emergency room because it was so stressful,” Acres said.

Acres suffered a heart attack, starting to feel the crushing weight of a stacked deck.

But then Acres learned that the judge assigned to his case, Chief Judge Lester J. Marston, was also listed as an attorney representing Blue Lake.

A reinvigorated Acres promptly filed a motion asking for Marston to recuse himself. Marston denied his request.

“I truly believed I had no chance at a fair trial and I would be completely denied due process,” Acres later said in a release.

Before completely surrendering, Acres consulted Blumberg who convinced him to finish the legal process in tribal court.

Blumberg reasoned that if Acres could demonstrate that his due process rights were violated, it could trigger a federal judge to review his case.

The standard for federal judicial review is the “bad faith exception.”

North County family and business attorney Alexandra McIntosh agreed with Blumberg’s strategy.

“If you are dealing with a judge who is corrupt and has a conflict of interest then you shouldn’t have to exhaust your tribal remedies because it will go nowhere,” McIntosh said.

And there was more.

Blue Lake billing records and court documents revealed that not only had Marston previously served as legal counsel for the tribe, but that Marston was being paid both as an attorney and chief judge while presiding over Acres’ case.

It appeared that Marston was not being completely honest about his professional relationship with Blue Lake. And Acres could prove it with a paper trail.

On Nov. 8, 2016, Marston issued a declaration in district court stating that he “(does) not act on behalf of (Blue Lake) in any capacity other than as the Chief Judge of the Tribal court,” according to court documents.

But Acres pointed out that in 2014, Marston was listed as the attorney for Blue Lake Rancheria in Blue Lake v. Shiomoto. Marston states on the declarations page:

“I (Lester J. Marston) am the attorney for the Plaintiffs, the Blue Lake Rancheria (“Tribe”), Jennifer Ann Ramos, and Arla Ramsey in the above-entitled action. I am also the Chief Judge of the Tribal Court of the Blue Lake Rancheria.”

The fix, it seemed, was in. In order to change what was happening in Blue Lake Tribal Court, Acres had to challenge the very system that seemed to be working against him.

“If (Acres) hadn’t challenged (the tribe’s fraud claim), he was dead in the water,” Brandenburg said. “Until someone tests the law, it’s valid. That’s the way it works.”

Acres sought relief in United States District Court in the Northern District of California in San Francisco.

Again, he appeared without legal representation.

“It’s a very impressive feeling when you file your stack of documents (in federal court) and set this entire machine in motion,” Acres said. “You pay enough money and the whole federal government will listen to what you say. It was very humbling.” 

Based on Acres’ investigation, District Judge William H. Orrick granted him discovery and ordered Marston to sit for a deposition.

Marston recused himself from the case.

After filing two federal lawsuits to enjoin the tribal action and with Marston’s replacement Judge James Lambden on the bench, suddenly Acres was back in the game.

Lambden, a former associate justice for the California Court of Appeals appointed by Gov. Pete Wilson, reviewed Blue Lake’s fraud claim and issued a summary judgement in favor of Acres, finding that “reasonable minds could only come to one conclusion,” according to court filings. 

The tribe subsequently dismissed the case.

“Judge Marston should never have been on the bench,” Blumberg said. “It took the fear of going under oath to force (Marston) to finally remove himself from this case.”

Today, Acres is awaiting a new trial but under very different circumstances. As the plaintiff filing seven causes of action against 17 defendants, the North County resident is seeking more than $4 million, in addition to punitive damages and payments made to Marston and his associates during tribal litigation.

“I want to make sure that no one sits in that tribal court again,” Acres said. “My whole livelihood was at stake. This can’t be happening. It has to stop.”

This time, Acres has enlisted Blumberg as his council. As an attorney, Blumberg has said he is nothing short of impressed by Acres’ “brilliant” pro se efforts, giving him the distinguished title of “lunatic savant.”

But for Blumberg, Acres’ case raises larger questions surrounding jurisprudence and sovereign immunity.

“From my perspective, sovereign immunity has to be reviewed,” Blumberg said. “Ask anyone who has come before a tribal court. You have no due process. It’s impossible. The only time you get due process is when the tribe comes to collect.”

Blue Lake Tribal Court currently has several cases pending in its tribal court, all of which are contract disputes, according to the California Judicial Branch website.

“(Mr. Acres) is damn lucky to be out of tribal court,” McIntosh said. “He’s damn lucky the district court gave him the relief they did to get rid of the conflict of interest.”

Marston still serves as chief judge and attorney for Blue Lake and is a member of the California-Tribal Court Forum.

Marston and the co-defendants in Acres’ complaint have not responded to repeated requests for comment.