An Oklahoma federal judge has lifted a pause in the Modoc Nation's $14.6 million lawsuit against a computer management company after the Tenth Circuit determined the tribe's former attorney general isn't entitled to sovereign immunity in the dispute.

U.S. District Judge John D. Russell, in a Friday minute order, lifted the stay that was set in July to allow attorney Blake Follis time to appeal the federal district court's denial of immunity on counterclaims he asserted against Softek Management Services LLC, executives Rajesh Shah and Sharad Dadbhawala, and former Red Cedar Enterprise Inc. employee Rusty Bohl.

The parties must file a joint status report no later than Nov. 21, according to the order.

The overall dispute stems from a 2019 lawsuit the tribe and its entities, including Red Cedar, filed against the California-based Softek, its executives and employees, alleging that they established a scheme to charge fraudulent fees for services never rendered.

The Modoc Nation alleges that it was pulled into a business arrangement with Softek based on a promise that the company had necessary personnel, infrastructure, financial resources and information technology expertise to help the tribe secure federal government contracts.

According to the Tenth Circuit's Oct. 3 order, Softek looked to impose personal liability against Follis in counterclaims for alleged tortious actions that included interfering with the company's relationship with the tribe in late 2016 or early 2017 before he became its attorney general.

In addition, the company alleged, Follis attempted to leverage tribal resources to develop a failed fantasy sports operation.

Softek claims that Follis marketed his gaming operation by using a significant amount from a $5 million line of credit jointly established by the Modoc Nation and the company.

And in 2019, while serving as the tribe's attorney general, he attempted to terminate numerous tribal employees whom he had wrongfully conscripted to work on his failed gambling operation, the company alleged.

When Softek objected to his use of funding to support the gambling operation, Follis fabricated a false narrative that Softek defrauded the tribe, the company claimed.

Those circumstances, the appellate court said, confirm Follis is the real party in interest and is unprotected by sovereign immunity.

Troy LittleAxe and his law firm Legal Advocates for Indian Country, in a January motion, asked the federal district court to dismiss the case or pause it pending Follis' and the tribal entities' Tenth Circuit appeal of Judge Russell's October 2024 order that said they failed to show that Softek and its executives engaged in a pattern of racketeering activity.

Judge Russell also determined in the October 2024 order that neither the Modoc Nation nor Follis is entitled to sovereign immunity in a counterclaim for breach of a stock purchase agreement brought against them by their former business partners at Softek.

In addition, the judge granted LittleAxe's motion for summary judgment as to an intentional interference with a contractual relationship claim, but denied the motion as to breach of fiduciary duty and legal malpractice claims.

The judge found that LittleAxe may have violated his fiduciary duty when serving both parties in the suit.

Counsel for the parties could not immediately be reached for comment on Monday.

The Modoc Nation, Red Cedar and related plaintiffs are represented by Charles D. Neal Jr., Richard W. Wassall, Clark W. Crapster and Stacie Lynn Hixon of Steidley & Neal PLLC.

LittleAxe and Legal Advocates for Indian Country are represented by Bruce A. McKenna of McKenna & Prescott PLLC.

Shah, Dadbhawala, Softek Management Services LLC, Softek Federal Services LLC and Softek Solutions Inc. are represented by Anthony Broadman, R. Joseph Sexton, Ryan D. Dreveskracht and Shelby R. Stoner of Galanda Broadman PLLC.

The case is Modoc Nation et al. v. Shah et al., case number 4:19-cv-00588, in the U.S. District Court for the Northern District of Oklahoma.