SAN FRANCISCO (LN) — A U.S. magistrate judge on Tuesday granted a preliminary injunction halting an arbitration proceeding demanded by real estate investors against the Guidiville Rancheria of California, concluding the tribe did not clearly and unmistakably agree to let an arbitrator decide whether it waived sovereign immunity.
U.S. Magistrate Judge Alex G. Tse ruled that the tribe is likely to succeed on the merits of its argument that a 2006 letter agreement does not delegate arbitrability questions to the American Arbitration Association.
The dispute stems from a 2006 letter agreement between the tribe, Upstream Point Molate, LLC, and the Scotts Valley Band of Pomo Indians. Under the agreement, Scotts Valley loaned $6.5 million to the tribe and Upstream for a proposed development.
Defendants Alan Ginsburg, AHG Group, LLC, and Bluerock Real Estate Holdings, LLC, filed a demand for arbitration with the AAA on Nov. 12, 2025. The tribe objected, arguing it never waived sovereign immunity to arbitrate the claims.
Tse concluded that Paragraph 10 of the 2006 agreement, which waived immunity for the "express limited purpose of compelling arbitration," outlined a specific order of operations for courts — tribal, then federal, then state. The judge wrote that this detailed sequence would be "pointless" if the parties had agreed in Paragraph 11 to arbitrate all issues of arbitrability.
"There is not 'clear and unmistakable evidence' that the Tribe agreed to arbitrate arbitrability," Tse wrote. "Instead, the Court must decide."
The magistrate judge distinguished recent Ninth Circuit precedent, including Caremark, LLC v. Choctaw Nation, noting that the Choctaw case contained an explicit delegation clause granting the arbitrator exclusive authority to resolve disputes regarding the agreement's validity. The 2006 letter agreement here lacks such language.
Tse also concluded that forcing the tribe to arbitrate without its consent would cause irreparable harm, particularly given the stakes of tribal sovereignty. The judge ruled that the balance of equities and the public interest favored the tribe, as defendants could still litigate their claims in federal court.
The injunction bars defendants from advancing the arbitration pending a final determination on the threshold issues of arbitrability and sovereign immunity. Tse waived the requirement for the tribe to post a bond.
The judge denied the tribe's request for an injunction pending a final determination on the merits of the underlying claims, limiting the relief to the procedural question of who decides arbitrability.