497 F.3d 491 (5th Cir. 2007), 05-50754, Texas v. United States

Docket Nº:05-50754.
Citation:497 F.3d 491
Party Name:State of TEXAS, Plaintiff-Appellant, v. UNITED STATES of America; United States Department of the Interior; Dirk Kempthorne, in his Official Capacity as Secretary of the Department of the Interior, Defendants-Appellees, Kickapoo Traditional Tribe of Texas, Intervenor-Defendant-Appellee.
Case Date:August 17, 2007
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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497 F.3d 491 (5th Cir. 2007)

State of TEXAS, Plaintiff-Appellant,


UNITED STATES of America; United States Department of the Interior; Dirk Kempthorne, in his Official Capacity as Secretary of the Department of the Interior, Defendants-Appellees,

Kickapoo Traditional Tribe of Texas, Intervenor-Defendant-Appellee.

No. 05-50754.

United States Court of Appeals, Fifth Circuit.

August 17, 2007

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[Copyrighted Material Omitted]

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William T. Deane, Asst. Atty. Gen. (argued), General Litigation Div., Austin, TX, for Plaintiff-Appellant.

Bridget Garcia, U.S. Dept. of the Interior, Washington, DC, for U.S., U.S. Dept. of Interior and Dirk Kempthorne.

Lane Madison McFadden (argued), U.S. Dept. of Justice, Environment & Natural Resources Div., Washington, DC, John Francis Paniszczyn, San Antonio, TX, for U.S.

Edmund Clay Goodman (argued), Hobbs, Straus, Dean & Walker, Portland, OR, Jennifer Hughes, Hobbs, Straus, Dean & Walker, Washington, DC, for Kickapoo Traditional Tribe of Texas.

Appeal from the United States District Court for the Western District of Texas.

Before JONES, Chief Judge, and KING and DENNIS, Circuit Judges.

EDITH H. JONES, Chief Judge:

This is high-stakes litigation involving a challenge to procedures adopted by the Secretary of the Interior Department ("Secretary") to circumvent the consequences of the Supreme Court's Eleventh Amendment decision in Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). An initial question is whether Texas's challenge to the existence of the Secretarial Procedures is ripe now, before the Secretary has made a substantive determination on a tribe's Class III gaming license. We hold that the case is ripe, the State has standing, and the Secretary lacked authority to promulgate the regulations. The district court's judgment is REVERSED and REMANDED.


In the 1980s, various Indian tribes began to seek authority for legalized gambling as a way to earn revenue. As sovereigns, Indian tribes are subordinate only to the federal government. California v. Cabazon Band of Mission Indians, 480 U.S. 202, 207, 107 S.Ct. 1083, 1087, 94 L.Ed.2d 244 (1987). State laws, however, "may be applied to tribal Indians on their reservations if Congress has expressly so provided." Id. In Cabazon, the Supreme Court held that because Congress had not so expressly provided, California could not enforce certain anti-gambling laws against an Indian tribe there. Id. at 214, 221-22, 107 S.Ct. at 1091, 1094-95.

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In response to Cabazon, Congress enacted the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. § 2701 et seq., to give states a subordinate but significant role in regulating tribal gaming. IGRA separates gaming into classes of escalating stakes. Class I gaming--social games played for minimal value--is within the exclusive jurisdiction of the tribes. 25 U.S.C. §§ 2703(6), 2710(a)(1). Class II gaming--bingo and related activities--is subject to oversight by the National Indian Gaming Commission. 25 U.S.C. §§ 2703(7), 2706(b), 2710(a), (b) & (c). All other forms of gaming, including high-stakes games such as slot machines, casino games, lotteries, and dog racing, are Class III. 25 U.S.C. § 2703(8).

Class III gaming, if authorized by the tribe, must be "conducted in conformance with a Tribal-State compact entered into by the Indian Tribe and the State." 25 U.S.C. § 2710(d)(1). In IGRA, Congress meticulously detailed two separate tracks leading to the institution of a Class III tribal gaming business. On the first track, the tribe and the state may negotiate a voluntary compact governing the conduct of gaming activities, which takes effect essentially upon approval by the Secretary. § 2710(d)(3)(B).

The second track begins when no compact has been reached one hundred eighty days after the tribe requests negotiations. IGRA then allows a tribe to file suit against the state in federal court and seek a determination whether the state negotiated in good faith. § 2710(d)(7). If the court finds the state negotiated in good faith, the tribe's proposal fails. On a finding of lack of good faith, however, the court may order negotiation, then mediation. If the state ultimately rejects a court-appointed mediator's proposal, the Secretary "shall prescribe, in consultation with the Indian tribe, procedures ... under which class III gaming may be conducted." § 2710(d)(7)(B).

The Supreme Court held this second track of the congressional scheme flawed under the Eleventh Amendment, because Congress has no authority to abrogate a state's sovereign immunity from suit under the Indian Commerce Clause of Article I of the Constitution. See Seminole Tribe, 517 U.S. at 47, 116 S.Ct. at 1119. Following Seminole Tribe, a state may waive immunity from suit, or the United States may sue the state to obtain the statutory good-faith determination, but a state cannot be forced to submit to the tribe's suit. Seminole Tribe made the second track toward Class III gaming far more difficult to pursue.

To work around the decision, the Secretary promulgated notice-and-comment regulations in 1999. See Class III Gaming Procedures, 25 C.F.R. pt. 291 ("Secretarial Procedures" or "Procedures"). The Secretarial Procedures only apply if the state asserts its sovereign immunity and refuses to consent to a tribe's statutory good-faith suit. 25 C.F.R. §§ 291.1(b), 291.3. In such event, an eligible tribe may submit a Class III gaming proposal to the Secretary, who then affords the state sixty days to comment and submit an alternative proposal. 25 C.F.R. § 291.7. At that point, the Secretarial Procedures prescribe two tracks depending on whether the state chooses to submit an alternative compact proposal.

If the state does not submit an alternative proposal, the Secretary reviews the tribe's proposal and either approves it or offers the opportunity for a conference between the state and the tribe to address "unresolved issues and areas of disagreements in the proposal." 25 C.F.R. § 291.8. The Secretary must then make a "final decision either setting forth the Secretary's proposed Class III gaming procedures

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for the Indian tribe, or disapproving the proposal." Id.

If the state submits an alternative plan, the Secretary appoints a mediator who, following the same procedures as IGRA prescribes, will resolve differences between the two proposals. 25 C.F.R. §§ 291.9, 291.10. While, under the Procedures, the Secretary may reject the mediator's proposal, he "must prescribe appropriate procedures within 60 days under which Class III gaming may take place." 25 C.F.R. § 291.11 (emphasis added).

The difference between IGRA and the Secretarial Procedures is that IGRA compels appointment of a mediator by the court only after a judicial finding that the state failed to negotiate in good faith, but under the Secretarial Procedures, the gaming proposal goes forward without any judicial bad-faith determination if the state refuses to waive sovereign immunity. The Secretarial Procedures, in sum, offer two alternatives for a state that insists upon its sovereign immunity: refuse to negotiate, participate (or not) in an informal conference, and take a chance that the Secretary will not accept the tribe's Class III gaming proposal, 25 C.F.R. § 291.8; or submit its "last best proposal" to a mediator, with the certainty that Class III gaming must be approved on the mediator's or the Secretary's terms. 25 C.F.R. § 291.11.

In 1995, the Kickapoo Traditional Tribe of Texas (the "Kickapoo") petitioned the State to enter into a compact facilitating Class III gaming on its land. Texas rejected the Kickapoos' offer. The tribe's federal lawsuit against Texas was eventually dismissed under Seminole Tribe. In 2004, the Kickapoo submitted a proposal to the Secretary, who followed the Secretarial Procedures and invited Texas to comment. Texas responded with this lawsuit asking the court to declare the Secretarial Procedures unauthorized and unconstitutional.


This court reviews a district court's legal conclusions, including the decision whether to grant a summary judgment motion, de novo. Garcia v. LumaCorp, Inc., 429 F.3d 549, 553 (5th Cir.2005). Jurisdictional issues such as ripeness and standing, as well as questions of statutory interpretation, are also legal questions for which review is de novo. See Bonds v. Tandy, 457 F.3d 409, 411 (5th Cir.2006) (standing); Groome Res. Ltd., L.L.C., v. Parish of Jefferson, 234 F.3d 192, 198-99 (5th Cir.2000) (ripeness); In re Reed, 405 F.3d 338, 340 (5th Cir.2005) (statutory interpretation). A district court's factual findings, including those on which the court based its legal conclusions, are reviewed for clear error. See Rivera v. Wyeth-Ayerst Labs., 283 F.3d 315, 319 (5th Cir.2002).


The district court determined in a thoughtful opinion that Texas had standing to sue, but that the State's claims were not ripe for adjudication. See Order on Defendants' Motion to Dismiss, Kickapoo Traditional Tribe of Texas v. State of Texas, Cause No. P-95-CA-66 (W.D.Tex. Apr. 2, 1996). The court thus dismissed. Nevertheless, it also opined that the Secretary had implied authority under IGRA and his general statutory responsibility for Indian tribes to promulgate the Procedures. Texas v. United States, 362 F.Supp.2d. 765, 769-70 (W.D.Tex.2004). The State appealed. Responding to the parties' contentions in this court, we conclude that Texas has standing to sue, that its case is ripe, and that the Secretarial Procedures are unauthorized by statute.

A. Justiciability


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