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Case 1:13-cv-00015-DLC Document 40 Filed 07/30/13 Page 1 of 17

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MONTANA

BILLINGS DIVISION

ROBERT R. OLIG,

Cause No. CV 13-15-BLG-DLC-RKS

Plaintiff,

vs.


XANTERRA PARKS & RESORTS,
INC., a Delaware corporation, ADDIE
WICKHAM, and John Does 1-5,

Defendants.

I.

INTRODUCTION

FINDINGS AND RECOMMENDATIONS OF
UNITED STATES MAGISTRATE JUDGE

Plaintiff Robert Olig brings this action for wrongful discharge, intentional

infliction of emotional distress, and punitive damages against his former employer

Defendant Xanterra Parks & Resorts, Inc., the concessionaire operating in

Yellowstone National Park. Also named as a Defendant is Olig’s supervisor,

Xanterra employee Addie Wickham. Olig initially filed this action in Montana’s

Sixth Judicial District Court, Park County, but Defendants removed to this Court

under the federal enclave doctrine, asserting that Olig’s causes of action arise

from his employment within the federal enclave of Yellowstone National Park.

CD 1.

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Pending before the Court are Olig’s motion to remand and Defendants’

motion to dismiss, which has been converted to a motion for summary judgment. 1

CD 37. The briefing has narrowed the issues significantly. Defendants argue that

because Olig was employed in Yellowstone National Park, the federal enclave

doctrine applies, granting the Court federal question jurisdiction and limiting the

applicable state law to laws in effect at the time the park was created. Defendants

further argue that because Montana law at that time did not recognize claims like

those at issue here, Olig fails to allege cognizable claims for relief.

Olig concedes that his claims fail if the federal enclave doctrine applies

because he does not attempt to argue that his claims would be cognizable under

Montana law in existence at the time Yellowstone was created. Rather, Olig

argues the federal enclave doctrine is inapplicable because he was required to

perform some services for Xanterra outside the boundaries of Yellowstone

National Park. He therefore argues there is no basis for federal jurisdiction and

this matter must be remanded to state court. Accordingly, the only issue to be

decided is whether the federal enclave doctrine applies.

1

Defendants have also moved the Court to take judicial notice of certain facts to be

considered with their motion to dismiss (CD 8), but since the Court has accepted the parties’
invitation to consider materials outside the pleadings and convert the Rule 12(b)(6) motion to
dismiss into a Rule 56 motion for summary judgment (CD 37), the motion for judicial notice is
moot.

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For the following reasons, the Court concludes that it does apply. The

Court therefore recommends Olig’s motion to remand (CD 15) be denied and

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Xanterra’s motion to dismiss (CD 6) be converted into a Rule 56 Fed.R.Civ. P.

motion for summary judgment and granted.

II. OLIG’S MOTION TO REMAND3

Generally, an action is removable to federal court only if it could have been

brought there originally. 28 U.S.C. § 1441(a). Xanterra’s Notice of Removal

asserts federal question jurisdiction because Olig’s causes of actions arose from

his employment within the federal enclave of Yellowstone National Park. CD 4,

¶¶ 9-10. Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1250 (9th Cir.

2006)(“Federal courts have federal question jurisdiction over tort claims that arise

on ‘federal enclaves.’”). “Personal injury actions which arise from incidents

occurring in federal enclaves may be removed to federal district court as a part of

federal question jurisdiction.” Akin v. Ashland Chemical Co., 156 F.3d 1030,

2

The case was originally assigned to the U.S. District Judge Richard Cebull, but was

transferred to Chief U.S. District Judge Dana Christensen upon Judge Cebull’s retirement. Chief
Judge Christensen has referred the case to this Court as provided by Local Rule of Procedure
73.1(a)(1).

3

Federal courts must establish their jurisdiction before proceeding to the merits of the
case. Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 94-98 (1998). Accordingly,
since Olig’s motion to remand challenges this court’s jurisdiction over his claims, the motion to
remand must be decided first.

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1034 (10th Cir. 1998); Fung v. Abex Corp., 816 F.Supp. 569, 571 (N.D. Cal.

1992) (failing to plead that exposure to asbestos occurred in an enclave does not

shield plaintiff from the effect of the enclave doctrine).

Removals based on federal question jurisdiction are governed by the general

removal statute, in this case 28 U.S.C. § 1441(a). The general removal statute is to

be strictly construed, and any doubts as to the right of removal must be resolved in

favor of remanding to state court. Durham, 445 F.3d at 1252, citing Gaus v.

Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992) (per curiam). The strong

presumption against removal means that the defendant always bears the burden of

proving removal was proper. Gaus, 980 F.2d at 566. In ruling on a motion to

remand, district courts may consider evidence outside the pleadings, such as

affidavits, documents, or even a limited evidentiary hearing, to resolve disputed

jurisdictional facts. Community Ins. Co. v. Rowe, 85 F.Supp.2d 800, 804 (S.D.

Ohio 1999).

Removals under 28 U.S.C. § 1441 are subject to the well-pleaded complaint

rule. Durham, 445 F.3d at 1253. The well-pleaded complaint rule provides that

federal jurisdiction exists only when a federal question is presented on the face of

the plaintiff’s properly pleaded complaint. California v. United States, 215 F.3d

1005, 1014 (9th Cir. 2000). Courts consider what appears in the plaintiff’s

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statement of his claim without regard to anything alleged to avoid federal defenses

it anticipates a defendant may assert, even the defense of federal preemption. Id.;

see also Tingey v. Pixley-Richards West, Inc., 953 F.2d 1124, 1129-30 (9th Cir.

1992). Assertion of a federal defense does not grant a right of removal even where

the federal defense is anticipated in the complaint and both parties concede it is

the only issue in the case. Tingey, 953 F.3d at 1130 citing Caterpillar, Inc. v.

Williams, 482 U.S. 386, 393 (1987). Under the well-pleaded complaint rule, a

defendant asserting that the complaint is barred because the cause of action is

barred by federal preemption does not have a right of removal and must raise the

defense in state court. Tingey, 953 F.3d at 1130; see also Berger Levee Dist.,

Franklin County, Mo. v. U.S., 128 F.3d 679, 681 (8th Cir. 1997) (U.S.

Government’s assertion of Supremacy Clause defense to state tax collection claim

does not confer federal question jurisdiction).

Assertion of the federal enclave doctrine is not considered a defense for

purposes of the well-pleaded complaint rule because removal may still be

appropriate when “federal law not only displaces state law, but also confers a

federal remedy on the plaintiffs or compels them to rely, explicitly or implicitly,

on federal propositions.” Harper v. San Diego Transit Corp., 764 F.2d 663, 666

(9th Cir. 1985); see also Swords to Plowshares v. Kemp, 423 F.Supp.1031, 1033

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(N.D. Cal. 2005) (an action arises under federal law within the meaning of § 1331

if the “plaintiff’s right to relief necessarily depends on the resolution of a

substantial question of federal law”), citing City of Chicago v. Int’l College of

Surgeons, 522 U.S. 156, 164 (1995). Related to this rule is the artful pleading

doctrine, a corollary to the well-pleaded complaint rule, providing that while the

plaintiff can forego federal causes of action in order to avoid removal, a plaintiff

cannot avoid federal jurisdiction by omitting from the complaint allegations of

federal law that are essential to the establishment of his claim. Harper, 764 F.2d at

666-67; Lippitt v. Raymond James Fin. Serv., 340 F.3d 1033, 1041 (9th Cir.2003).

Olig’s Amended Complaint does not mention Yellowstone National Park,

so it may have been artfully pleaded in an attempt to avoid the federal enclave

doctrine. Defendants are correct that tort claims brought by employees of

contractors operating on federal enclaves are subject to the federal enclave

doctrine. Stiefel v. Bechtel Corp., 497 F.Supp.2d 1138, 1148 (N.D. Cal. 2007),

quoting Taylor v. Lockheed Martin Corp., 78 Cal.App. 4th 472, 481 (2000). And

Yellowstone National Park is a federal enclave. Yellowstone Park Transp. Co. v.

Gallatin County, 31 F.2d 644, 645 (9th Cir. 1929), citing 1891 Mont. Laws 262;

Mont. Code Ann. § 2-1-207 (2011).

Olig argues the federal enclave doctrine is inapplicable because Xanterra

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directed him to perform limited work outside the boundaries of the enclave at

properties it managed in Gardiner and West Yellowstone, Montana, as well as in

Livingston, Great Falls, Butte, Three Forks, Bozeman, and Billings, Montana. CD

38-1, Aff. Of Robert Olig (July 3, 2013) . Olig avers that in a typical year

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approximately 15% of his time was spent performing services for Xanterra outside

the boundaries of Yellowstone. CD 38, ¶ 11. Olig also avers–without any legal

authority for its relevance–that he worked for Xanterra in the State of Montana, as

evidenced by pay stubs showing that Xanterra withheld funds from his paycheck

for payment of Montana state income taxes. CD 38, ¶ 13.

The weight of the case law, however, does not support Olig’s argument that

performing some work outside the enclave at the direction of the employer renders

the federal enclave doctrine inapplicable. And Olig supplies no authority for the

proposition that payment of state income taxes obviates the doctrine. Title 4

U.S.C. § 106(a) authorizes states to tax income earned from services performed

within federal enclaves and the Court has found no authority linking this practice

to the federal enclave doctrine.

4

Olig filed this second affidavit in response to this Court’s June 21, 2013 Order notifying

the parties that Xanterra’s Rule 12(b) motion would be converted to a Rule 56 motion and that
they should submit any additional pertinent material within 12 days. Olig’s second affidavit
contained only one additional averment (¶ 13) and one additional exhibit (Ex. B) beyond his
initial February 26, 2013 affidavit. CD 14-1.

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The issue is whether Olig’s claims arose on the federal enclave. Durham,

444 F.3d at 1250. The U.S. District Court for the Northern District of California

has recently explained that the “federal enclave doctrine only applies when the

locus in which the claim arose is the federal enclave itself.” In re High-Tech

Employee Antitrust Litigation, 856 F.Supp.2d 1103, 1125 (N.D.Cal. 2012).

Another court in the Northern District of California looked to where the

“substance and consummation of the tort” occurred in determining whether a tort

claim arose on a federal enclave. Totah v. Bies, 2011 WL 1324471, * 2 (N.D.Cal.

2011) (denying motion to remand). Finally, two other federal district courts in

California have applied the enclave doctrine to wrongful termination claims where

“all pertinent events occurred” on the enclave. Stiefel, 497 F.Supp.2d at 1148;

Snow v. Bechtel Const. Inc, 647 F.Supp. 1514, 1521 (C.D. Cal. 1986).5

Olig argues Stiefel is distinguishable because the wrongful termination

plaintiff did not dispute that all of his work was performed on the enclave, but

argued the enclave doctrine did not apply because he was at home, off the enclave,

when he was terminated. 497 F.Supp.2d at 1147-48. While that is true, it does not

5

A court in the Northern District of Alabama has even applied the federal enclave

doctrine where only some of the events alleged in the complaint occurred on a federal enclave.
Corley v. Long–Lewis, Inc., 688 F.Supp.2d 1315, 1336 (N.D.Ala. 2010).

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undermine Stiefel’s rule that the federal enclave doctrine applies where all

pertinent events occur on the enclave. 497 F.Supp.2d at 1148.

Here, Olig brings claims for wrongful discharge (Counts I and II),

intentional infliction of emotional distress (Count III), and punitive damages (also

Count III). CD 5. Count I alleges that on January 12, 2009 he was wrongfully

discharged from his position as “Assistant Parkwide Trades Manager FT” without

cause because the claimed reason of job elimination was a pretext, and in

retaliation for reporting violations of public policy. Id., at ¶¶ 8-10. Count I

further alleges the discharge violated Xanterra’s written policy manual. Id., at ¶

12. Count II alleges he was constructively discharged from the position he was

demoted to, “Project Assistant,” because his supervisor, Defendant Addie

Wickham, created a hostile work environment that was ratified by Xanterra, all in

violation of Xanterra’s written policies. Id., at ¶¶ 16-20. Count III alleges

Defendants “engaged in a course of conduct to humiliate and embarrass Olig in

front of his peers” that was intended to cause him severe emotional distress. Id., at

¶ 24. The second Count III alleges Defendants are liable for punitive damages for

acting with actual malice. Id., ¶27. Neither the Amended Complaint nor Olig’s

affidavit (CD 38) allege that any of Defendants’ allegedly wrongful conduct

occurred outside Yellowstone.

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Xanterra’s base of operations in Yellowstone is at Mammoth Hot Springs,

within the boundaries of the enclave. Defendant’s Statement of Uncontroverted

Facts, CD 25, ¶ 3. At all times relevant to this lawsuit Olig worked for Xanterra’s

Engineering Department, based within the enclave at Mammoth Hot Springs. Id.,

at ¶¶ 5, 13, 16, 20. During Olig’s time as Assistant Parkwide Trades Manager, his

office was located at Mammoth Hot Springs, along with his three supervisors. Id.,

at ¶¶ 13, 14. When Olig was terminated from his job as Assistant Parkwide Trades

Manager, he was notified both orally and in writing at the Engineering Department

at Mammoth Hot Springs. Id., at ¶ 19. He accepted his new position as Project

Assistant there as well. Id., at ¶ 21. During Olig’s time as Project Assistant,

performance and discipline issues arose and all personnel actions were taken

within the boundaries of the enclave, primarily at the Engineering Department

offices in Mammoth Hot Springs. Id., at ¶¶ 24-27. When Olig resigned as Project

Assistant in April of 2010, he hand delivered his letter of resignation to the

Director of Engineering at Mammoth Hot Springs. Id., at ¶ 28. Finally, Xanterra

counters Olig's claim that 15% of his working hours were spent outside the

enclave by noting that only three of the 837 structures it manages are located

outside of the enclave. Id., at ¶¶ 6, 16.

With respect to the claim that Wickham intentionally inflicted severe

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emotional distress on Olig through a hostile work environment after his demotion,

Wickham avers that almost all of their interactions occurred at the offices in

Mammoth Hot Springs and rarely in the field. Id., at ¶¶ 22-23.

Considering Olig’s claims in light of the facts supplied by Xanterra, and

without any evidence that Xanterra committed the alleged torts outside the

enclave, the only possible conclusion is that Olig’s claims arose within the federal

enclave of Yellowstone National Park. Xanterra properly removed to this Court.

Olig’s motion to remand should therefore be denied.

III. XANTERRA’S MOTION TO DISMISS



Under Rule 12(d) Fed.R.Civ.P., if the Court considers matters outside the

pleadings in ruling on Xanterra’s Rule 12(b)(6) Fed.R.Civ.P. motion to dismiss, it

must convert the motion to a Rule 56 motion for summary judgment after giving

the parties “a reasonable opportunity to present all the material that is pertinent to

the motion.” On June 21, 2013, the Court gave actual notice that it would be

converting Xanterra’s motion to a motion for summary judgment and that any

additional material must be filed by July 3, 2013. CD 37. Olig responded by

updating his affidavit with one additional averment and one additional exhibit (CD

38), which have been taken into consideration.

Rule 56(a) Fed.R.Civ.P. requires that summary judgment be granted if there

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are no genuine disputes as to any material fact and the movant is entitled to

judgment as a matter of law. An issue is “genuine” only if there is a sufficient

evidentiary basis on which a reasonable fact finder could find for the nonmoving

party and a dispute is “material” only if it could affect the outcome of the suit

under the governing law. Anderson, v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986). On summary judgment, the evidence must be viewed in the light most

favorable to the non-moving party. In re Barboza, 545 F.3d 702, 707 (9th Cir.

2008) The court should not weigh the evidence and determine the truth of the

matter, but determine whether there is a genuine issue for trial. Anderson, 477

U.S. at 249.

Xanterra’s basis for dismissal is that all of Olig’s claims are preempted by

the federal enclave doctrine. Having already established that Yellowstone

National Park is a federal enclave and that the federal enclave doctrine is

applicable because Olig’s claims arise from his employment in Yellowstone,

supra, the only question is whether the federal enclave doctrine precludes Olig’s

claims. By failing to argue otherwise his briefs, Olig has conceded that the federal

enclave doctrine defeats all of his claims.

The federal enclave doctrine arose from Article I, Section 8, Clause 17 of

the United States Constitution, which gives Congress the power to exercise

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exclusive legislation over all places purchased by the consent of the relevant state

legislature. Stiefel, 497 F.Supp.2d at 1147. Under the doctrine, state laws existing

at time of surrender of sovereignty continue until they are abrogated by Congress,

unless they are inconsistent with the laws of the United States or with the

governmental use for which the property was acquired. Stiefel, 497 F.Supp.2d at

1147. In such cases, existing state law becomes federal law. Id. And more

importantly for the instant case, only state laws in effect at time when jurisdiction

is transferred continue. Id. Subsequently enacted state laws have no effect in the

enclave unless they were adopted by Congress or the state expressly reserved

jurisdiction over such matters. Id.

On February 14, 1891, the State of Montana “ceded to the United States

exclusive jurisdiction over and with respect to all lands within the state which

were or might be embraced within the Yellowstone National Park, … reserving

only concurrent jurisdiction for the execution of process, civil and criminal,

lawfully issued by the courts of the state.” Yellowstone Park Transp. Co., 31 F.2d

at 645, citing 1891 Mont. Laws 262. From this language, and there being no

authority to the contrary, the Court concludes Montana did not reserve legislative

jurisdiction over Yellowstone. Therefore, Montana law existing as of 1891

applies. See Merritt v. Akima Corporation, 273 M.F.R. 273, 276 (D.Mont. 2003).

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Montana’s Wrongful Discharge from Employment Act, under which Counts

I and II are brought, was enacted in 1987. Id., citing Mont. Code Ann. § 39-2-901.

Accordingly, Counts I and II are barred as a matter of law by the federal enclave

doctrine. Id.

6

Similarly, Montana only “tacitly recognized” a causes of action for

intentional infliction of emotional distress in 1992. Sacco v. High Country

Independent Press, Inc., 896 P.2d 411, 427 (Mont. 1995), citing Foster v.

Albertsons, Inc., 835 P.2d 720, 728 (Mont. 1992); see also Doohan v. Bigfork

School Dist. No. 38, Bigfork, Mont., 805 P.2d 1354, 1362 (Mont. 1991), overruled

by Sacco, 896 P.2d at 429 (the Montana Supreme Court has “not yet dealt with a

case which merits recognition of a separate cause of action for the intentional

infliction of emotional distress.”). And to the extent Olig claims Count III alleges

negligent infliction of emotional distress, Montana did not create elements for

such a tort until 1983. Versland v. Caron Transport, 671 P.2d 583, 588 (Mont.

1983) overruled by Sacco, 896 P.2d at 429. Accordingly, Count III is also

6

Although he makes no mention of Wyoming law in any filings with this Court, because
Mammoth Hot Springs and most of Yellowstone lies within Wyoming, the Court also notes that
the result would be the same under Wyoming law. This is because (1) Wyoming law presumes
employment to be at-will unless a contract clearly states otherwise and (2) at-will employment
may be terminated by the employer at any time with no legal consequence. Preston v. Marathon
Oil Co., 277 P.3d 81, 85 (Wyo. 2012).

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precluded as a matter of law by the federal enclave doctrine. 7

Finally, Olig also pleads a cause of action for punitive damages, also named

as Count III. CD 5, p. 4. But there can be no award of punitive damages without

an award of compensatory damages. Jacobsen v. Allstate Ins. Co., 215 P.3d 649,

664 (Mont. 2009). Having concluded that all of Olig’s claims fail as a matter of

law, the second Count III, alleging punitive damages, must also fail.

IV. CONCLUSION

It is RECOMMENDED:

1. Olig’s Motion to Remand (CD 15) should be denied because Xanterra

properly removed to this Court based on federal question jurisdiction through the

federal enclave doctrine.

2. Xanterra’s Motion to Dismiss (CD 6) should be converted to a Rule 56

Fed.R.Civ.P. motion for summary judgment and granted because Olig’s state-law

claims are precluded by the federal enclave doctrine.

3. Xanterra’s Motion for Judicial Notice (CD 8) should be denied as moot.

4. The Clerk of Court should be directed to close this matter and enter

7

If Olig were to claim Count III arises under Wyoming law, the result would be the same

since Wyoming did not recognize the torts of negligent or intentional infliction of emotional
distress until 1986. Gates v. Richardson, 719 P.2d 193, 198 (Wyo. 1986) (negligent infliction of
emotional distress); Leithead v. Am. Colloid Co., 721 P.2d 1059, 1056 (Wyo. 1986) (intentional
infliction of emotional distress).

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judgment in favor of Defendants pursuant to Rule 58 of the Federal Rules of Civil

Procedure.

NOTICE OF RIGHT TO OBJECT TO FINDINGS &

RECOMMENDATIONS AND CONSEQUENCES OF FAILURE TO OBJECT

Pursuant to 28 U.S.C. § 636(b)(1), the parties may serve and file written

objections to these Findings and Recommendations within fourteen (14) days of

the date entered as indicated on the Notice of Electronic Filing. Any such filing

should be captioned “Objections to Magistrate Judge’s Findings and

Recommendations.”

If either party files objections, they must itemize each factual finding to

which objection is made and identify the evidence in the record he relies on to

contradict that finding. In addition, he must itemize each recommendation to

which objection is made and set forth the authority he relies on to contradict that

recommendation.

Failure to assert a relevant fact or argument in objections to these Findings

and Recommendations may preclude that party from relying on that fact or

argument at a later stage of the proceeding. A district judge will make a de novo

determination of those portions of the Findings and Recommendations to which

objection is made. The district judge may accept, reject, or modify, in whole or in

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part, the Findings and Recommendations. Failure to timely file written objections

may bar a de novo determination by the district judge and/or waive the right to

appeal.

This order is not immediately appealable to the Ninth Circuit Court of

Appeals. Any notice of appeal pursuant to Fed.R.App.P. 4(a), should not be filed

until entry of the District Court’s final judgment.

DATED this 30 day of July, 2013.

th

/s/ Keith Strong
Keith Strong
United States Magistrate Judge

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