Appeals Court tackles dispute over Kings Mountain casino construction

North Carolina’s second-highest court will decide whether Catawba Indians enjoy sovereign immunity that protects them from some claims in a lawsuit tied to construction of a casino in Kings Mountain.

A three-judge North Carolina Court of Appeals panel heard an hour of oral arguments Tuesday in the dispute pitting the Catawba Indian Nation against Kings Mountain Land Development Partners.

KMLD originally owned the property containing the casino. The company continues to own surrounding property and granted easements to the Catawbas for work related to casino construction.

But KMLD eventually sued the Catawbas “for trespass, conversion, unfair and deceptive trade practices, injunctive relief, and breach of easement agreements.”

One of the key arguments involves a parking deck. KMLD argues that the tribe secured easements after promising the company that it could build a deck to serve the casino on land owned by KMLD. But the tribe eventually built a deck on its own property closer to the casino.

The company also argues that the Catawbas removed material from KMLD property and graded the land in such a way that it can no longer be used.

A trial judge dropped some of KMLD’s claims based on the tribe’s sovereign immunity.

“The tribe deliberately violated KMLD’s rights to save time, save money, open its casino sooner, and boost its own profits,” argued lawyer Erik Zimmerman on behalf of the company. “This appeal asks whether KMLD can sue the tribe for all those deliberate violations of its property rights.”

The tribe responded that KMLD can rely on the waiver of sovereign immunity tied to the easements.

“It has to be a clear, unequivocal expression of a waiver, and it cannot happen by implication,” argued lawyer Michael Mitchell on behalf of the Catawba tribe. “The problem is that the claims in the complaint jumble claims that do fall within the waiver and claims that clearly don’t fall within the waiver.”

Appeals Court Chief Judge Chris Dillon and Judges John Tyson and Toby Hampson questioned multiple aspects of the case, including whether KMLD even has a basis for appeal at this point in the case. The judges also wrestled with how closely the tribe’s activities can be tied to the easements.

Zimmerman argued that it’s not clear which of KMLD’s claims survived the trial judge’s ruling. All parties appeared to agree that the trial court order struck the claim about the parking deck.

“They’ve said our claim related to the parking deck … is not related to the agreements,” Zimmerman argued. “That’s also incorrect. Our claim on the parking deck is that they induced us to enter into the easements based on their misrepresentation about the parking deck.”

“This lawsuit implicates a foundational right — as a federally recognized Indian tribe, Catawba Nation enjoys sovereign immunity from lawsuits unless that immunity is abrogated by Congress or waived by a clear and unequivocally expressed waiver by the Tribe itself,” the tribe’s lawyers wrote in a Feb. 24 Appeals Court brief.

“Catawba Nation partially waived its immunity in two easement agreements with KMLD,” the brief continued. “But those waivers are limited and specific. They apply only to claims related to the easements or ‘transactions contemplated [t]hereunder.’”

“KMLD ignored the terms of those limited waivers and sued the Tribe for matters plainly outside their scope,” the Catawbas’ lawyers wrote. “For example, KMLD claims it has the exclusive and lucrative right to build and operate a parking deck for the Tribe’s new casino in Cleveland County. But nothing in the easements mentions or contemplates a parking deck, much less grants an exclusive right for KMLD to build and operate one for the Tribe’s casino.”

KMLD seeks to “rewrite and expand” the scope of the existing waivers, according to the brief. “KMLD misinterprets the language of the waivers, tramples bedrock legal principles governing the interpretation of sovereign-immunity waivers, and ultimately asks this court to undermine the Tribe’s sovereignty.”

The company submitted its main Appeals Court brief in December 2025.

“To facilitate the Tribe’s construction of a new casino on the Trust Land, KMLD transferred part of its own land to the Tribe and made three agreements with the Tribe,” company lawyers wrote. “Two of those agreements granted easements that allowed the Tribe to access KMLD’s remaining land for certain construction-related purposes. The third agreement imposed a restrictive covenant on the land that KMLD transferred to the Tribe.”

“In each agreement, so that KMLD could protect its property and its rights, the Tribe waived its sovereign immunity for ‘any claim’ that is ‘directly or indirectly related to [the] Agreement or any transactions contemplated [t]hereunder,’ whether ‘arising as a matter of contract or a tort,’” the KMLD brief continued.

“In connection with the Tribe’s construction of its casino, the Tribe and its contractors (who acted on behalf of and at the instruction of the Tribe) soon began construction activities on KMLD’s land, exceeding the parameters of the easements, and violating KMLD’s property rights,” the company argued. “The Tribe engaged in this conduct to save time during construction so that it could begin full casino operations sooner and thus substantially increase its revenue and profits.”

KMLD challenged the trial judge’s ruling. “The court reasoned that the tort claims are not ‘related to’ the parties’ agreements or the transactions that those agreements contemplate, because the claims (1) allegedly do not have a ‘logical or causal connection’ to those agreements, and (2) are not ‘based on the express rights and restrictions’ in the agreements. That reasoning is erroneous,” according to the brief.

“The court’s interpretation ignores both the ordinary meaning of the term ‘related to’ and this [Appeals] Court’s governing precedent interpreting that term,” KMLD lawyers added. “The court’s interpretation also violates bedrock principles of contract interpretation.”

“[A]ll of KMLD’s claims arise because the Tribe violated KMLD’s property rights when constructing its casino,” the brief continued. “Thus, the claims relate to a transaction contemplated by the agreements: the casino construction. For these reasons, the Tribe waived its immunity for all of KMLD’s claims.”

Catawba Indians opened a temporary casino in July 2021. They unveiled in May the first phase of  what is described as a $1 billion resort, which will include a 385-room hotel. The operation now features 1,350 slot machines, 22 table games, a 68-seat restaurant, an 18-seat bar, and sports betting kiosks, according to the casino’s website.

“Appeals Court tackles dispute over Kings Mountain casino construction” was originally published on www.carolinajournal.com.