Alabama v. PCI Gaming Auth.

• Decision Date: 10 April 2014
• Docket Number: Case No. 2:13–CV–178–WKW.
• Citation: 15 F.Supp.3d 1161
• Parties: State of ALABAMA, Plaintiff, v. PCI GAMING AUTHORITY, Buford Rolin, Stephanie Bryan, Robert McGhee, David Gehman, Arthur Mothershed, Sandy Hollinger, Garvis Sells, Eddie Tullis, Keith Martin, Bridget Wasdin, Matthew Martin, Billy Smith, and Tim Manning, in their official capacities, Defendants.
• Court: U.S. District Court — Middle District of Alabama

15 F.Supp.3d 1161

State of ALABAMA, Plaintiff

v.PCI GAMING AUTHORITY, Buford Rolin, Stephanie Bryan, Robert McGhee, David Gehman, Arthur Mothershed, Sandy Hollinger, Garvis Sells, Eddie Tullis, Keith Martin, Bridget Wasdin, Matthew Martin, Billy Smith, and Tim Manning, in their official capacities, Defendants.

Case No. 2:13–CV–178–WKW.

United States District Court, M.D. Alabama, Northern Division.

Signed April 10, 2014.

Andrew L. Brasher, Henry Theodore Reagan, II, Office of the Attorney General, Montgomery, AL, for Plaintiff.

David Coventry Smith, Kilpatrick Townsend & Stockton LLP, Washington, DC, Mark H. Reeves, Kilpatrick Townsend & Stockton LLP, Augusta, GA, Kelly Fitzgerald Pate, Robin Garrett Laurie, Balch & Bingham, LLP, Montgomery, AL, for Defendants.

MEMORANDUM OPINION AND ORDER

W. KEITH WATKINS, Chief Judge.

I. INTRODUCTION

The State of Alabama brings this equity action under state-nuisance law and the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 –2721, 18 U.S.C. §§ 1166 –1168, to prevent allegedly unlawful gaming at three Indian-run casinos in Alabama: Creek Casino in Elmore County; Wind Creek Casino in Escambia County; and Creek Casino in Montgomery County. Defendants are PCI Gaming Authority, the commercial entity through which the Poarch Band of Creek Indians (“Poarch Band”) operates the casinos, and members of PCI Gaming Authority and of the Poarch Band Tribal Council in their official capacities.

Before the court is Defendants' motion to dismiss for lack of subject-matter jurisdiction and failure to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(1), (b)(6). The parties have briefed the motion fully and received assistance through briefs filed as amici curiae by the United States on behalf of Defendants and the State of Michigan on behalf of the State of Alabama. At the heart of the motion to dismiss is the issue whether the State of Alabama has authority to bring this action for injunctive and declaratory relief to halt allegedly illegal gaming at the Poarch Band's Alabama casinos. The answer requires navigating a complicated jurisdictional and federal statutory maze down pathways implicating tribal sovereign immunity, the Ex parte Young doctrine, complete preemption, and congressional intent. Ultimately, each pathway leads to a dead end for the State of Alabama.

Accordingly, after careful consideration of the arguments of counsel, the pertinent law, and the pleadings, as supplemented by the undisputed evidence, the court finds that Defendants' motion to dismiss is due to be granted.

II. JURISDICTION AND VENUE

This opinion addresses disputed issues pertaining to subject-matter jurisdiction. Personal jurisdiction and venue are uncontested.

III. STANDARDS OF REVIEW

A motion to dismiss based on lack of subject-matter jurisdiction, see Fed.R.Civ.P. 12(b)(1), and a motion to dismiss for failure to state a claim, see Fed.R.Civ.P. 12(b)(6), implicate different, but slightly overlapping, standards of review. Those standards are articulated here, and how these standards apply in this case is set out in Part V.

A. Rule 12(b)(1)

A Rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction asserts either a facial or factual challenge to the complaint. McElmurray v. Consol. Gov't of Augusta–Richmond Cnty., 501 F.3d 1244, 1251 (11th Cir.2007) (citing Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir.1981) );¹ accord Lawrence v. Dunbar, 919 F.2d 1525, 1528–29 (11th Cir.1990). A factual attack challenges “the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered.” Lawrence, 919 F.2d at 1529 (citation and internal quotation marks omitted). A facial attack, on the other hand, challenges the complaint on its face and asks whether the complaint “sufficiently allege[s] a basis of subject matter jurisdiction,” employing a standard similar to that governing Rule 12(b)(6) review. McElmurray, 501 F.3d at 1251 (quoting Lawrence, 919 F.2d at 1529 ). Under these review mechanisms, a “ ‘court has the power to dismiss for lack of subject matter jurisdiction on any of three separate bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.’ ” Id. (quoting Williamson, 645 F.2d at 413 ).

B. Rule 12(b)(6)

When evaluating a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court takes the complaint's allegations as true and “construe[s] them in the light most favorable to” the plaintiff. Resnick v. AvMed, Inc., 693 F.3d 1317, 1321–22 (11th Cir.2012). To survive Rule 12(b)(6) scrutiny, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ”

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). “[F]acial plausibility” exists “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. In addition to considering the properly pleaded allegations of the complaint, on a motion to dismiss the court can consider “an extrinsic document if it is (1) central to the plaintiff's claim, and (2) its authenticity is not challenged.” Speaker v. U.S. Dep't of Health & Human Servs. Ctrs. for Disease Control & Prevention, 623 F.3d 1371, 1379 (11th Cir.2010) (citation and internal quotation marks omitted).

IV. BACKGROUND

Since the rise of Indian gaming in the 1970s,² there has been an ongoing struggle between the federal government, the states, and Indian tribes over which entity regulates Indian-run gaming and which entity's laws control. That struggle emerges in this case. To place the facts, claims, and arguments in proper context, some background is necessary on the 1988 Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 –2721, 18 U.S.C. §§ 1166 –1168 (“IGRA”). Through IGRA, Congress “develop[ed] a comprehensive approach to the controversial subject of regulating tribal gaming [and] struck a careful balance among federal, state, and tribal interests.” Florida v. Seminole Tribe of Fla., 181 F.3d 1237, 1247 (11th Cir.1999). Part IV begins with a discussion of IGRA, followed by a synopsis of the facts and procedural history of this case.

A. IGRA

IGRA “provide[s] 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). IGRA was Congress's response to the Supreme Court's holding in California v. Cabazon, 480 U.S. 202, 107 S.Ct. 1083, 94 L.Ed.2d 244 (1987). See S.Rep. No. 100–446 (1988), reprinted in 1988 U.S.C.C.A.N. 3071. Cabazon held that, in the absence of congressional regulation of tribal gaming, Indian tribes could conduct gaming on Indian lands without state interference if the state permitted gaming in any form. Cabazon's holding essentially “left Indian gaming largely unregulated by the states.” Seminole Tribe of Fla. v. Florida, 11 F.3d 1016, 1019 (11th Cir.1994), aff'd, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996).

In 1988, Congress filled the federal regulatory void with IGRA. IGRA legalizes specified gaming activities on Indian lands but does not give Indian tribes unfettered control over these activities. IGRA creates three classifications for gaming to which differing jurisdictional and regulatory rules apply.

Class I gaming is subject to the exclusive jurisdiction of the tribes and, thus, is beyond the regulatory reach of both federal and state authorities. See § 2710(a)(1).³ Class I gaming includes “social games solely for prizes of minimal value or traditional forms of Indian gaming engaged in by individuals as a part of, or in connection with, tribal ceremonies or celebrations.” § 2703(6). This case is not about class I gaming.

Class II gaming, which includes “the game of chance commonly known as bingo,” is subject to regulation by the tribes and the National Indian Gaming Commission (“NIGC”).⁴ § 2703(7)(A)(i). States can control class II gaming on Indian lands within their borders only by imposing a statewide ban of all activities that fall within class II gaming. In other words, class II gaming by Indians is allowed in a state that “permits such gaming for any purpose by any person, organization or entity (and such gaming is not otherwise specifically prohibited on Indian lands by Federal law).” § 2710(b)(1)(A). To participate in class II gaming, a tribe also must ratify an ordinance or resolution concerning the conduct of class II gaming, which the NIGC's Chairman then must approve. § 2710(b)(1)(B). The merits of this case are about whether Defendants are offering permissible class II or impermissible class III gaming at the Poarch Band casinos.

Class III gaming covers “all forms of gaming that are not class I or class II gaming.” § 2703(8). IGRA permits class III gaming, which includes slot machines and casino games, on “Indian lands” as that phrase is defined in IGRA, but only if the gaming is “located in a State that permits such gaming for any purpose by any person, organization, or entity,” § 2710(d)(1)(B), and is conducted “in conformance with a Tribal–State compact entered into by the Indian tribe and the State,” § 2710(d)(1)(C).⁵ IGRA defines “Indian lands” to mean:

(A) all lands within the limits of any Indian reservation; and

(B) any lands title to which is either held in trust by the United States for the benefit of any Indian tribe or individual or held by any Indian tribe or individual subject to restriction by the

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