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Law360 (June 5, 2026, 9:13 PM EDT) — Officials with the Colorado River Indian Tribes must face a lawsuit brought by a smoke shop owner who claims they wrongfully evicted his business and stole its inventory, the Ninth Circuit ruled in a published opinion, saying tribal employees aren’t automatically shielded by sovereign immunity.
A three-judge panel on Thursday reversed the permanent dismissal of a civil racketeering lawsuit filed by Kyle Welsh, a tribal member who operated the Flame On Indian Smoke Shop, once located on the Arizona side of CRIT’s reservation.
The three named defendants — CRIT’s Attorney General Rebecca Loudbear, tribal Chairwoman Amelia Flores, and John Yackley, a property manager for the tribe — were initially allowed to escape the suit when a federal court determined they were entitled to sovereign immunity because they were acting in their official capacity as leaders or employees of the tribe.
But the panel rejected this ruling, saying the lower court missed an important distinction. Welsh’s lawsuit doesn’t seek damages from the tribe; rather he is suing the tribal employees in their “individual capacities” and wants them to pay damages from their own pockets, not the tribal coffers, the opinion said.
“The [entrepreneur seeks] damages resulting from alleged criminal acts carried out by individuals, not CRIT,” the panel said in its 13-page opinion. “And ‘an officer sued in his individual capacity cannot claim sovereign immunity from suit, so long as the relief is sought not from the government treasury but from the officer personally.'”
“In sum, the tribal defendants have not shown that the remedy sought by [Welsh] would run against CRIT or that CRIT is the real party in interest,” the panel said.
Counsel for Welsh, Dennis Wilenchik of Wilenchik & Bartness PC, told Law360 on Friday that they are very pleased with the decision.
“It was clear the case should never have been dismissed,” he said. “Our next step once the court is ready is to have a pre-trial conference and then to conduct discovery to substantiate our client’s claims and damages.”
Counsel for the tribal officials did not immediately respond to a request for comment Friday.
The lawsuit was filed in April 2025. It names as plaintiffs Welsh, the estate of his sister and business partner, Jill Welsh, and their limited liability company, WW Young Money.
The suit claims that in 2015 the Welshes and Young Money entered into a lease with CRIT to operate a smoke shop at the Moovalya Plaza in Parker, Arizona — commercial property owned by the tribe and managed by Yackley. On April 8, 2021, Loudbear and Flores sent a termination letter on official tribal letterhead, claiming they had not paid rent and caused property damage, according to the opinion.
The lawsuit claims Yackley received every rent check, which were sent via FedEx and required a signature, but he never deposited them.
The suit claims the named defendants later entered the smoke shop and took the inventory, worth hundreds of thousands of dollars, and sold the goods at the Running Man Fuel Station Smoke Shop and the Blue Water Resort & Casino Gift Shop.
The lower court granted the three defendants’ motion to dismiss in August 2025, finding that the officials were immune because they were acting within their official duties for the tribe and that CRIT was an indispensable party to the suit.
The panel’s opinion leaned on the U.S. Supreme Court‘s 2017 ruling in Lewis v. Clarke . The panel said sovereign immunity does not shield tribal employees when the money sought would come from them individually.
The panel also said CRIT is not a necessary party because Welsh is not seeking to reinstate his tenancy, but merely to hold the individual defendants liable for their alleged criminal acts.
U.S. Circuit Court Judges Michael Daly Hawkins, Andrew D. Hurwitz and Roopali H. Desai sat on the panel for the Ninth Circuit.
Welsh, his sister’s estate and their company are represented by William M. Fischbach III, Garo V. Moughalian and Dennis I. Wilenchik of Wilenchik & Bartness PC.
Loudbear, Flores and Yackley are represented by Rob R. Smith, Rachel B. Saimons, and Alexander M. Mallory of Kilpatrick Townsend & Stockton LLP.
The case is Welsh et al. v. Loudbear et al., case number 25-5475, in the U.S. Court of Appeals for the Ninth Circuit.