Things Are Brewing in Buffalo!

July is the month for high-profile Indian gaming litigation, and from the looks of it, expect further developments in August.

Besides the controversial case handed down by the Florida Supreme Court earlier this month, litigation has been brewing in New York over the Buffalo Creek Casino.

Just a few days after the Florida decision, a federal judge ruled that despite an NIGC decision to the contrary, the Seneca Nation could not operate gaming on a parcel of land in Buffalo, New York. The tribe currently operates a temporary casino there, and is in the midst of constructing a $333 million casino complex, billed as the largest privately funded construction project in Buffalo's history.

Now, the U.S. has filed a motion asking the federal court to "remand" the case to the NIGC. The tribe supports the motion, with the assistance of their chief legal consultant, the renowned constitutional scholar Laurence Tribe.

How did all that come about? We'll explain it for you!

Next up: The story of the Buffalo parcel . . . .

Attempts to Enforce State Law in Florida

As we explained in our last post, Florida's options for enforcing the Florida Supreme Court decision are limited. Though the court held that the governor could not authorize banked card games as a matter of state constitutional law, this may not necessarily mean that the Seminoles have to stop offering table games at their Hard Rock Hotel & Casino. Legally, the state must turn to the federal government, and politically, the state must decide whether it wants to risk hundreds of millions of dollars in revenue sharing.

The Isle Casino at Pompano Park, a private racino in Florida, brought suit in federal court to shut down the Seminoles' table games. But under IGRA, only a handful of suits are authorized. The statute says that a state or a tribe may sue to stop Class III gaming conducted in violation of a compact. And the federal courts have uniformly held that IGRA does not authorize a general private cause of action. So, being neither a state nor a tribe, the Isle Casino simply cannot sue to enforce IGRA -- which is exactly what the federal district court judge ruled.

The state's next move remains to be seen . . . . But in the meantime, both the Seminole Tribe and Gov. Crist have filed petitions for rehearing in the Florida Supreme Court.

Read more in this Florida Sun-Sentinel story.

The Fallout from the Florida Decision

In our last post, we explained the Florida Supreme Court's recent ruling that Gov. Crist exceeded his state constitutional authority in authorizing banked card games through the tribal-state compact with the Seminoles. That must mean that the Seminoles can't offer banked card games, such as blackjack, right? Not necessarily. There are at least three considerations that make this more complicated, both legally and politically.

First, the compact was negotiated, signed, and approved by the Interior Secretary. Under IGRA, this was a valid compact. The Seminoles have taken the position that a state court decision cannot invalidate a duly approved compact. So, they continue to offer all the games authorized under the compact, including banked card games.

Second, Florida's options for attempting to enforce the court's decision are limited. Florida has no independent state authority over the tribe's casino. At the same time, IGRA states that Class III gaming, such as banked card games, is legal only if it is operated in accordance with a valid compact. But only the federal government can enforce IGRA. The state of Florida can bring suit in federal court to stop unauthorized Class III gaming, or it can try to convince the NIGC or the local U.S. Attorney to shut down any unauthorized Class III gaming.

And third, though the compact contains a severability clause (meaning that even if the court invalidated the portion of the compact that authorized banked card games, the rest of the compact should remain valid), the compact also contains a revenue-sharing provision. The validity of a revenue-sharing provision should turn on whether the state gave the tribe anything above and beyond what the tribe is entitled to under IGRA -- typically, this is some measure of exclusivity, such as the ability to operate banked card games when no one else can. In other words, if the state tries to shut down the tribe's blackjack games, it runs the risk of forfeiting a great deal of revenue -- some $375 million over the first three years of the compact.

Next up: Why was a private casino was unsuccessful in trying to enforce the court's decision?

Read more in this article in the South Florida Sun-Sentinel in which Kathryn is quoted: Does Court Ruling Put Hard Rock in a Hard Place? Also, see Court Strikes Down Florida-Seminole Gaming Deal in the Miami Herald.

No Surprise from Florida

Earlier this month, the Florida Supreme Court held that the Class III compact negotiated between Gov. Crist and the Seminoles violated state law. As Kathryn has detailed in her 2007 Marquette Law Review article, state constitutional challenges to gaming compacts are not unusual, often arising when the state legislature (or some state legislators) are unhappy with the compact negotiated by the governor. The Florida case is similar to cases in Wisconsin, New York, and Michigan. In Florida, the state legislature sued Gov. Crist, arguing that the compact was invalid without legislative approval. As is typical in these cases, the Seminoles were not party to the suit (Kathryn's article discusses how and why this is problematic). And as is also typical in these cases, the court's decision turns entirely on state law. (Ditto.)

The court concluded that because the compact authorized banked card games, which are illegal in Florida, the governor exceeded his constitutional authority: "The Governor has no authority to change or amend state law. Such power falls exclusively to the Legislature. Therefore, we hold that the Governor lacked authority to bind the State to a compact that violates Florida law as this compact does."

The court's decision is available through the Florida Supreme Court web site. (By the way, Kathryn's Marquette Law Review article is cited by the Florida Supreme Court in its decision.)
http://www.floridasupremecourt.org/decisions/index.shtml

Next up: The Fallout from the Florida Decision

And Now Some Gaming News from North Dakota . . . .

This isn't Indian gaming news, but we thought some readers would be interested in what was the biggest illegal gambling case in North Dakota . . . . or at least it was, until a federal court reversed the convictions of the defendants, as well as the forfeiture order of $99 million, based on insufficient evidence.

Read more here.

The Eighth Circuit case is U.S. v. Bala, 489 F.3d 334 (8th Cir. 2007).

Per Capita Payments and Tribal Membership

The San Pasqual Band of Mission Indians withheld per capita gaming payments from about 50 members and also fired several members from casino and other leadership positions. The issue centers on the validity of their status as tribal members. The Band requires "blood quantum" for tribal membership. Each member must, at the least, have a great-grandparent who was a "full-blooded" member of the tribe. The dispute over the 50 members arose from questions about whether the relative from whom they were descended was adopted, rather than being a "blood" member of the tribe.

The San Pasqual Band is a relatively small tribe of about 300 members, and it issues monthly checks of about $4,000 to each of its members under its per capita payment plan. IGRA permits a tribe to make per capita distributions of net gaming revenue to its members if the uses mandated in section 2710(b)(2)(B) (these include funding tribal government operations, providing for the welfare of tribal members, promoting tribal economic development, making charitable donations, and assisting in funding local government operations) are adequately met and the tribe's distribution plan is approved by the Interior Secretary. Because per capita payments are limited to tribal members, the membership determinations of some tribes come under scrutiny. Generally speaking, of course, tribal sovereignty encompasses a tribe's exclusive right to make membership determinations. Accordingly, federal courts have been reluctant to review a tribe's distribution of such payments. At least one court, however, has made a distinction between reviewing a tribe's membership determinations and reviewing a tribe's compliance with its per capita payment plan. (See Smith v. Babbitt, 875 F. Supp. 1353 (D. Minn. 1995), aff'd, 100 F. 3d 556 (8th Cir. 1996).)

Interestingly, though, the local BIA superintendent said that the San Pasqual Band's membership determinations must be approved by the BIA. The BIA superintendent reported the withheld checks to the NIGC as a potential violation of the Band's per capita payment plan, explaining that the disputed members are "members until such time as the BIA changes its mind."

Read more here in Onell Soto’s article in the San Diego Union Tribune.

Intra-Agency Contestation in Interior Department (or, Interior Scolds NIGC)

A few weeks ago, we told you about the NIGC's May 19 Indian land opinion for the Poarch Band of Cree Indians in Alabama. State officials had challenged the legality of the tribe's Class II operation on a parcel of land near Montgomery. Five years passed. And then the NIGC concluded that the land in question met the "restored lands" exception.

As we noted then, it was interesting that the NIGC opinion was issued while the Interior Secretary continues to contemplate formal regulations governing newly acquired lands. As the acting general counsel noted at the start of her opinion letter, "I recognize that this decision, coming from me and at this time, is a bit unusual." Referencing the assistance provided by the Band and the delay in the issuance of the opinion, the letter states that it would be "significantly unfair" to require the Band to wait for new regulations.

Those new regulations were issued the very next day, May 20.

A few weeks later, David Bernhardt, the Interior Department Solicitor or chief legal officer (and the third ranking official in the Interior Department), wrote a lengthy letter to NIGC Chairman Phil Hogen, challenging the NIGC's Indian land opinion for the Poarch Band. The letter details the Solicitor's disagreement with the NIGC opinion. Bernhardt wrote,

"Given that the legal conclusions reached by [the NIGC's general counsel] are inconsistent with the legal views of the Office of the Solicitor, and that . . . NIGC has no statutory mandate to issue Indian lands opinions independently, the Secretary has directed me to inform you that he is invoking his authority . . . to review your decision . . . ."

The letter ends with the Solicitor's analysis of the NIGC's authority. Noting that decisions regarding whether land qualifies as "Indian lands" under IGRA may involve "whether a tribe is exercising jurisdiction and governmental authority over those lands; whether gaming is authorized under [IGRA's section] 2719; and a legal analysis of 25 C.F.R. Part 292," the letter concludes, "Resolution of these questions has not been delegated to the NIGC. Moreover, resolution of these issues relies on the particular expertise of the Solicitor's Office regarding overall Indian issues and not just Indian gaming concerns."

Oh, and by the way, Interior just announced that it was delaying the effective date for the new "Section 20" regulations until August 25, 2008.