U.S. Supreme Court rejects case by El Dorado Hills homeowner

The U.S. Supreme Court has declined to hear a challenge to tribal immunity in a case involving an El Dorado Hills homeowner.

The case, Carls v. Blue Lake Housing Authority, pitted 69-year-old homeowner Rita Carls against a Humbolt County Indian tribe. Carls claimed a house she bought in El Dorado County was defective and the tribe, which acquired the firm that built the house, should be held responsible.

In February, the Sacramento-based Pacific Legal Foundation, which specializes in property rights litigation, filed a petition with the U.S. Supreme Court asking that it overturn a California decision that ruled against Carls.

Earlier this week, the Supreme Court declined to review the case.

Jana Ganion, a spokeswoman for the 53-member Blue Lake Rancheria, said the lawsuit shouldn't have been filed in the first place.

"The most important aspect of this situation, and least reported, is that the merits of the initial construction defect claim are in serious doubt. Based on what we know, it should have never become a lawsuit in the first place, much less a sovereignty issue."

An attorney for the Pacific Legal Foundation said the case had merit and the issue it raised will likely will be raised again.

"It is disappointing that this case will not be heard by the Supreme Court, because the important issues that it raised are not going away," Meriem Hubbard, a principal attorney with the Pacific Legal Foundation, said in a press release this week.

"At some point either Congress or the high court will have to reconsider the broad application of sovereign immunity," said Hubbard, who was among the attorneys representing Carls.

According to the foundation, Carls sued the company that built her house after the firm failed to adequately address construction defects that caused water intrusion and mold. Her lawsuit sought compensation for property damage and personal injury under the warranty provisions of her home purchase agreement.

Unbeknown to Carls, the firm had been sold to the Blue Lake Rancheria, a federally protected Indian tribe, by the time she filed the lawsuit, she claimed in court.

The tribe claimed it could not be sued in state court, under the doctrine of sovereign immunity and a California appellate court agreed.

Tribal spokeswoman Ganion said challenges to sovereign immunity are not uncommon, but in this instance Carls chose to wage her legal battle in state courts, rather than through other available remedies - including mediation, arbitration and tribal court.

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

Like tribes across the state seeking to diversify their economic interests, Blue Lake Rancheria has significantly expanded its business ventures in recent years.

Since 2001, tribe has expanded its businesses off the rancheria - including acquisition of the company that build Carls' home as well as Mainstay Business Solutions, a Roseville employee-staffing firm.