353 F.3d 712 (9th Cir. 2003), 02-16508, Artichoke Joe's California Grand Casino v. Norton

Docket Nº:02-16508
Citation:353 F.3d 712
Party Name:Artichoke Joe's California Grand Casino v. Norton
Case Date:December 22, 2003
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 712

353 F.3d 712 (9th Cir. 2003)

ARTICHOKE JOE'S CALIFORNIA GRAND CASINO; Fairfield Youth Foundation; Lucky Chances, Inc.; Oaks Club Room; and Sacramento Consolidated Charities, Plaintiffs-Appellants,


Gale A. NORTON, Secretary of Interior; James McDivitt, Acting Assistant Secretary of Interior; Arnold Schwarzenegger, [*] Governor of California; Bill Lockyer, Attorney General of California; Harlan W. Goodson, Director of the California Division of Gambling Control; John E. Hensley, Chair, California Gambling Control Commission; and Michael C. Palmer, J.K. Sasaki, and Arlo Smith, Members of the California Gambling Control Commission, Defendants-Appellees.

No. 02-16508.

United States Court of Appeals, Ninth Circuit

December 22, 2003

Argued and Submitted Aug. 14, 2003.

Page 713

James Hamilton, Swidler Berlin Shereff Friedman, LLP, Washington, DC, for the plaintiffs-appellants.

Edmund F. Brennan, Assistant U.S. Attorney, U.S. Department of Justice, and Marc A. Le Forestier, Deputy Attorney

Page 714

General, State of California, Sacramento, CA, for the defendants-appellees.

James C. Martin and Ezra Hendon, Reed Smith Crosby Heafey LLP, Oakland, CA; Fred Jones, Law Offices of Fred Jones, Auburn, CA; Arturo N. Fierro, Cerritos, CA; Neil Vincent Wake, Law Offices of Neil Vincent Wake, Phoenix, AZ; and Frank R. Lawrence, Holland & Knight LLP, Los Angeles, CA, for the amici curiae.

Appeal from the United States District Court for the Eastern District of California; David F. Levi, District Judge, Presiding. D.C. No. CV-01-00248-DFL.

Before REINHARDT and GRABER, Circuit Judges, and RHOADES, [**] District Judge.

GRABER, Circuit Judge.

Plaintiffs are California card clubs and charities that are prohibited under California state law from offering casino-style gaming. They challenge the validity of compacts entered into under the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. §§ 2701-2721, between the State of California and certain Indian tribes. Pursuant to an amendment to the California Constitution that permits casino-style gaming only on Indian lands ("Proposition 1A"), California has entered into 62 compacts ("Tribal-State Compacts") with Indian tribes allowing such gaming. Plaintiffs brought this action, in federal district court, against various state defendants1 and the Secretary and Assistant Secretary of the United States Department of the Interior, alleging that Proposition 1A and the Tribal-State Compacts violate IGRA and their rights to equal protection guaranteed by the Fifth and Fourteenth Amendments.2

The district court granted summary judgment to both the state defendants and the federal defendants. Because we hold that Proposition 1A and the Tribal-State Compacts are consistent with IGRA and do not violate the guarantees of equal protection, we affirm.


A. The Indian Gaming Regulatory Act ("IGRA") 3

In California v. Cabazon Band of Mission Indians, 480 U.S. 202, 107 S.Ct. 1083, 94 L.Ed.2d 244 (1987), the Supreme Court invalidated an attempt by California to

Page 715

enforce California Penal Code § 326.5 (the "bingo statute") against tribes that operated bingo halls. The Supreme Court characterized the bingo statute as regulatory, rather than criminal, and held that Public Law No. 280 prohibited the enforcement of state regulatory statutes against Indian tribes:

[I]f the intent of a state law is generally to prohibit certain conduct, it falls within Pub. L. 280's grant of criminal jurisdiction, but if the state law generally permits the conduct at issue, subject to regulation, it must be classified as civil/regulatory and Pub. L. 280 does not authorize its enforcement on an Indian reservation.

Cabazon, 480 U.S. at 209, 107 S.Ct. 1083. Because California permitted a substantial amount of gaming activity, including bingo, the bingo statute could not be characterized as criminal or prohibitory and therefore could not be enforced on Indian lands.

As a response to the Cabazon decision, Congress enacted IGRA as a means of granting states some role in the regulation of Indian gaming. As noted in the opinion below,

IGRA was Congress' compromise solution to the difficult questions involving Indian gaming. The Act was passed in order to provide "a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments" and "to shield [tribal gaming] from organized crime and other corrupting influences to ensure that the Indian tribe is the primary beneficiary of the gaming operation." 25 U.S.C. § 2702(1), (2). IGRA is an example of "cooperative federalism" in that it seeks to balance the competing sovereign interests of the federal government, state governments, and Indian tribes, by giving each a role in the regulatory scheme.

Artichoke Joe's v. Norton, 216 F.Supp.2d 1084, 1092 (E.D.Cal.2002) (alteration in original).

IGRA creates three classes of gaming, each of which is subject to a different level of regulation. Class I gaming covers "social games solely for prizes of minimal value or traditional forms of Indian gaming engaged in by individuals as part of, or in connection with, tribal ceremonies or celebrations." 25 U.S.C. § 2703(6). Class II gaming includes bingo and card games that are explicitly authorized by a state or "not explicitly prohibited by the laws of the State and are [legally] played at any location in the State." Id. § 2703(7)(A)(ii). Class II gaming specifically excludes banked card games and slot machines. 4

At issue in this case is class III gaming, the most heavily regulated and most controversial form of gambling under IGRA. Class III gaming includes "all forms of gaming that are not class I gaming or class II gaming." Id. § 2703(8). It includes the types of high-stakes games usually associated with casino-style gambling, as well as slot machines and parimutuel horse-wagering. Class III gaming is lawful on Indian lands only if three conditions are satisfied: 5 (1) authorization by an ordinance

Page 716

or resolution of the governing body of the Indian tribe and the Chair of the National Indian Gaming Commission ("NIGC"); 6 (2) location in a state that permits such gaming for any purpose by any person, organization, or entity; and (3) the existence of a Tribal-State compact approved by the Secretary of the Interior. Id. § 2710(d)(1).

IGRA's compacting requirement allows states to negotiate with tribes that are located within their borders regarding aspects of class III Indian gaming that might affect legitimate state interests. Id. § 2710(d)(3)(C). The compacting process gives to states civil regulatory authority that they otherwise would lack under Cabazon, while granting to tribes the ability to offer legal class III gaming. Keweenaw Bay Indian Cmty. v. United States, 136 F.3d 469, 472 (6th Cir. 1998). IGRA also imposes on states an obligation to conduct compact negotiations in good faith, 25 U.S.C. § 2710(d)(3)(A), and allows tribes to enforce that obligation in federal court, id. § 2710(d)(7)(A).7

B. California's Regulation of Indian Gaming Under IGRA

After the enactment of IGRA, certain Indian tribes in California sought to negotiate compacts with the State to permit the operation of class III gaming on their reservations. The class III games over which the tribes sought to negotiate--live banked or percentage card games and stand-alone electronic gaming machines (similar to slot machines)--were not permitted under California law. See Cal.Penal Code §§ 330, 330a, 330b. However, California did allow other forms of class III gaming, such as nonelectronic keno and lotto. Rumsey Indian Rancheria of Wintun Indians v. Wilson, 64 F.3d 1250, 1255 n. 1 (9th Cir. 1994).

During the administration of Governor Pete Wilson, California refused to negotiate with tribes with respect to the forms of gaming that they sought to conduct. Because the State did not permit live banked or percentage card games or slot machine-like devices, it took the view that it had no obligation to negotiate with respect to those games or devices. The tribes argued that, because the State permitted other types of class III games, it could not refuse to negotiate over a particular subset of class III games. See Mashantucket Pequot Tribe v. Connecticut, 913 F.2d 1024, 1030 (2d Cir. 1990) (agreeing with the tribe's position). In Rumsey, this court rejected the tribes' view, holding that

IGRA does not require a state to negotiate over one form of Class III gaming activity simply because it has legalized another, albeit similar form of gaming. Instead, the statute says only that, if a state allows a gaming activity "for any purpose by any person, organization, or

Page 717

entity," then it also must allow Indian tribes to engage in that same activity. 25 U.S.C.§ 2710(d)(1)(B). In other words, a state need only allow Indian tribes to operate games that others can operate, but need not give tribes what others cannot have.

64 F.3d at 1258.

The Rumsey decision meant that the State of California had no obligation under federal law to negotiate with the tribes over the class III gaming that the tribes wanted to operate. The tribes thus resorted to California's initiative process to impose a state-law obligation on California to negotiate class III gaming compacts. A coalition of California tribes drafted Proposition 5, which required the State to enter into a model class III gaming compact covering banked card games and slot machines. The Proposition required the Governor to execute compacts within 30 days after any federally recognized Indian tribe requested such an arrangement. If the Governor took no action within 30 days, the compacts were deemed approved. Flynt v. Cal. Gambling Control Comm'n, 104...

To continue reading