Idaho v. Coeur D'Alene Tribe

• Decision Date: 22 July 2015
• Docket Number: No. 14–35753.,14–35753.
• Citation: 794 F.3d 1039
• Parties: State of IDAHO, a sovereign State of the United States, Plaintiff–Appellee, v. COEUR D'ALENE TRIBE, a federally recognized Indian tribe, Defendant–Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

794 F.3d 1039

State of IDAHO, a sovereign State of the United States, Plaintiff–Appellee
v.
COEUR D'ALENE TRIBE, a federally recognized Indian tribe, Defendant–Appellant.

No. 14–35753.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted April 6, 2015.
Filed July 22, 2015.

794 F.3d 1040

Joseph H. Webster (argued) and F. Michael Willis, Hobbs, Straus, Dean & Walker, LLP, Washington, D.C.; Howard Funke and Kinzo Mihara, Howard Funke & Associates, PC, Coeur d'Alene, ID, for Defendant–Appellant.

Hon. Lawrence G. Wasden, Attorney General, Steven L. Olsen, Chief of Civil Litigation, Clay R. Smith (argued) and Tim A. Davis, Deputy Attorneys General, Boise, ID; Cally A. Younger, Office of the Governor, Boise, ID, for Plaintiff–Appellee.

Scott D. Crowell and Bruce Didesch, Crowell Law Offices, Tribal Advocacy Group, Sedona, AZ; William Bacon, Office of the Reservation Attorney, Shoshone–Bannock Tribes, General Counsel, Fort Hall, ID, for Amicus Curiae Shoshone–Bannock Tribes.

Appeal from the United States District Court for the District of Idaho, B. Lynn Winmill, Chief District Judge, Presiding. D.C. No. 2:14–cv–00170–BLW.

Before: MICHAEL DALY HAWKINS, JOHNNIE B. RAWLINSON, and CONSUELO M. CALLAHAN, Circuit Judges.

794 F.3d 1041

OPINION

HAWKINS, Circuit Judge:

The Coeur d'Alene Tribe (“Tribe”) appeals the preliminary injunction prohibiting the Tribe from offering Texas Hold'em (“Hold'em”) poker. The Tribe argues that tribal sovereign immunity was not abrogated and that venue was improper under the terms of the Tribal–State Gaming Compact (“Compact”). We affirm because the Indian Gaming Regulatory Act (“IGRA”) severed tribal immunity and the Compact did not bar the litigation. Lastly, we affirm the grant of injunctive relief because the district court's findings were not clearly erroneous.

FACTUAL AND PROCEDURAL BACKGROUND

As this appeal hinges on the regulation of Indian gaming, we begin with a brief introduction to the IGRA. Congress passed the IGRA in 1988 “in order to provide a statutory basis for the operation and regulation of gaming by Indian tribes.”Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 48, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). “The Act divides gaming on Indian lands into three classes—I, II, and III—and provides a different regulatory scheme for each class.” Id. “Non-banking” card games (including poker) can be either Class II or Class III gaming, depending on the laws of the state in which the gaming takes place.¹ See 25 U.S.C. § 2703.

Non-banking card games are Class II if they “are explicitly authorized by the laws of the State, or are not explicitly prohibited by the laws of the State and are played at any location in the State.” Id. § 2703(7)(A)(ii). Class III gaming is a residual category that consists of “all forms of gaming that are not class I gaming or class II gaming,” § 2703(8), and is “the most heavily regulated of the three classes.” Seminole Tribe, 517 U.S. at 48, 116 S.Ct. 1114. Such gaming “is lawful only where it is ... conducted in conformance with a Tribal–State compact.” Id. at 48–49, 116 S.Ct. 1114 (quoting 25 U.S.C. § 2710(d)(1) ).

Several years after Congress enacted the IGRA, the State and Tribe executed a Compact authorizing the Tribe to offer Class III gaming. The parties failed to reach accord on the scope of gaming allowed by Idaho law. The State argued that Idaho law only permitted the state lottery and parimutuel betting, while the Tribe countered that it allowed “all games that contain the elements of chance and or skill, prize and consideration.” The Compact authorized the parties to seek a declaratory judgment to resolve the dispute.

The Tribe filed suit in federal court in pursuit of such a declaration. The district court held on summary judgment that Idaho law only allowed “a lottery and parimutuel betting” and that “Idaho law and public policy clearly prohibit all other forms of Class III gaming, including the casino gambling activities which the Tribes have sought to include in compact negotiations with the State.” Coeur d'Alene Tribe v. Idaho, 842 F.Supp. 1268, 1283 (D.Idaho 1994) (“Coeur d'Alene I ”). The Ninth Circuit affirmed. Coeur D'Alene Tribe v. Idaho, 51 F.3d 876 (9th Cir.1995).

In March 2014, Idaho officials learned that the Tribe intended to offer Hold'em at

794 F.3d 1042

the Coeur d'Alene Casino. Shortly after providing notice of non-compliance, the State filed a complaint and moved for a temporary restraining order and a preliminary injunction. The Tribe moved to dismiss pursuant to Rules 12(b)(1), (3), & (6), arguing that tribal sovereign immunity applies and that venue was improper.

The district court denied the motion for injunctive relief as moot, granted the Tribe's request to compel arbitration, stayed the litigation, and directed the parties to file a joint status report, concluding that the Compact prohibited the State from litigating at that juncture. The court “refrain[ed] from rendering an opinion” as to whether the parties could litigate the dispute if neither party invoked arbitration.

The joint status report informed the court that neither party had invoked arbitration and asked the court to decide the pending motion to dismiss. The court denied the motion to dismiss and granted a preliminary injunction, determining that the Tribe had elected to pursue litigation. The court concluded that the statute abrogated tribal immunity, and determined that an injunction was warranted because the State otherwise lacked effective remedies and the continued offering of unlawful gaming would cause irreparable harm. The Tribe filed timely notice of appeal.

JURISDICTION AND STANDARD OF REVIEW

“The general federal-question statute, 28 U.S.C. § 1331, gives a district court subject matter jurisdiction to decide any claim alleging a violation of IGRA.” Michigan v. Bay Mills Indian Cmty., ––– U.S. ––––, 134 S.Ct. 2024, 2029 n. 2, 188 L.Ed.2d 1071 (2014). The court had jurisdiction pursuant to § 1331 because Idaho alleged a violation of the IGRA. See Oklahoma v. Hobia, 775 F.3d 1204, 1213 (10th Cir.2014).²

The existence of sovereign immunity is a question of law reviewed de novo. See Allen v. Gold Country Casino, 464 F.3d 1044, 1046 (9th Cir.2006). The classification of Texas Hold'em hinges on statutory interpretation, which is also reviewed de novo, see Schleining v. Thomas, 642 F.3d 1242, 1246 (9th Cir.2011), as is the district court's venue ruling. Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 (9th Cir.2010).

A preliminary injunction ruling “is subject to limited appellate review, and we will reverse only if the district court ‘abused its discretion or based its decision on an erroneous legal standard or on clearly erroneous findings of fact.’ ” Nat'l Wildlife Fed'n v. Nat'l Marine Fisheries Serv., 422 F.3d 782, 793 (9th Cir.2005) (quoting United States v. Peninsula Commc'ns, Inc., 287 F.3d 832, 839 (9th Cir.2002) ).

ANALYSIS

I. Tribal Sovereign Immunity

An Indian tribe is subject to suit only when Congress has abrogated the tribe's sovereign immunity by statute or when the tribe has waived its immunity. Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998). To abrogate immunity by statute, Congress must unequivocally express its intent to do so. See C & L Enters., Inc. v. Citizen Band Potawatomi

794 F.3d 1043

Tribe of Okla., 532 U.S. 411, 418, 121 S.Ct. 1589, 149 L.Ed.2d 623 (2001).

The relevant federal statute provides that “district courts shall have jurisdiction over ... any cause of action initiated by a State or Indian tribe to enjoin a class III gaming activity located on Indian lands and conducted in violation of any Tribal–State compact....” 25 U.S.C. § 2710(d)(7)(A)(ii). In order to abrogate immunity, all of the statute's “textual prerequisites must be met.” Michigan v. Bay Mills Indian Cmty., 695 F.3d 406, 414 (6th Cir.2012), aff'd and remanded, ––– U.S. ––––, 134 S.Ct. 2024, 188 L.Ed.2d 1071 (2014).

In Bay Mills, the statute did not abrogate immunity because the conduct Michigan sought to enjoin was not located on Indian land and was not Class III gaming. 134 S.Ct. at 2032–34. Likewise, the Tribe contends here that the statute does not abrogate immunity because Hold'em is Class II gaming and the Compact does not address it. Thus, the immunity inquiry necessarily requires the determination of whether Hold'em qualifies as Class III gaming.

A. Classification of Texas Hold'em

As discussed supra, non-banking card games are Class II gaming if they are either “explicitly authorized by the laws of the State” or “are not explicitly prohibited by the laws of the State and are played at any location in the State.” § 2703(7)(A)(ii). The district court properly determined that Hold'em is not a Class II game because the Idaho Constitution and gaming statute explicitly prohibit poker.³

The...