Alabama v. PCI Gaming Auth.

• Decision Date: 03 September 2015
• Docket Number: No. 14–12004.,14–12004.
• Citation: 801 F.3d 1278
• Parties: State of ALABAMA, Plaintiff–Appellant, v. PCI GAMING AUTHORITY, Buford Rolin, Stephanie Bryan, Robert McGhee, David Gehman, sued in their official capacity, et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

801 F.3d 1278

State of ALABAMA, Plaintiff–Appellant

v.PCI GAMING AUTHORITY, Buford Rolin, Stephanie Bryan, Robert McGhee, David Gehman, sued in their official capacity, et al., Defendants–Appellees.

No. 14–12004.

United States Court of Appeals, Eleventh Circuit.

Sept. 3, 2015.

Andrew Lynn Brasher, Megan Arys Kirkpatrick, Theodore Reagan, II, J. Strange, III, Alabama Attorney General's Office, Montgomery, AL, for Plaintiff–Appellant.

Adam Howard Charnes, David Coventry Smith, Kilpatrick Townsend, LLP, Winston–Salem, NC, Robin Garrett Laurie, Kelly F. Pate, Balch & Bingham, LLP, Montgomery, AL, Mark H. Reeves, Kilpatrick Townsend & Stockton LLP, Augusta, GA, for Defendants–Appellees.

Appeal from the United States District Court for the Middle District of Alabama. D.C. Docket No. 2:13–cv–00178–WKW–WC.

Before MARCUS, JILL PRYOR and EBEL,^* Circuit Judges.

Opinion

JILL PRYOR, Circuit Judge:

Alabama sued under state and federal law to enjoin gaming at casinos owned by the Poarch Band of Creek Indians (the “Tribe”) and located on Indian lands within the state's borders.¹ As the Tribe itself is unquestionably immune from suit, Alabama instead named as defendants PCI Gaming Authority (“PCI”), an entity wholly owned by the Tribe that operates the casinos, and tribal officials in their official capacity.

Alabama claims that the gaming at the casinos constitutes a public nuisance under Alabama law and should be enjoined. It puts forth two novel theories to explain why its state law applies to the Tribe's casinos. First, Alabama asserts that the Secretary of the Interior (the “Secretary”) lacked authority to take land into trust for the Tribe; therefore, the Tribe's casinos are not located on Indian lands, and Alabama may regulate the gaming there. Second, Alabama contends that by incorporating state laws governing gambling into federal law, 18 U.S.C. § 1166 creates a right of action for a state to sue in federal court to enforce its laws on Indian lands. The district court rejected these arguments and dismissed the action on the grounds that the defendants were entitled to tribal immunity on nearly all of Alabama's claims and Alabama failed to state a claim for relief. After careful consideration of the briefs and the record, and with the benefit of oral argument, we affirm the district court's judgment in favor of the defendants.

I. FEDERAL REGULATION OF GAMING ON INDIAN LANDS

Congress passed the Indian Gaming Regulatory Act (“IGRA”), 18 U.S.C. §§ 1166 –68, 25 U.S.C. §§ 2701 –21, to address “the rapidly expanding field of Indian gaming.” Tamiami Partners, Ltd. v. Miccosukee Tribe of Indians (Tamiami II ), 63 F.3d 1030, 1032 (11th Cir.1995) ;² see also 25 U.S.C. § 2701(1) (explaining IGRA was enacted because “numerous Indian tribes have become engaged in or have licensed gaming activities on Indian lands”). IGRA was enacted in response to the United States Supreme Court's decision in California v. Cabazon Band of Mission Indians, 480 U.S. 202, 107 S.Ct. 1083, 94 L.Ed.2d 244 (1987), which held that because Congress had not regulated Indian gaming, the states lacked authority to regulate gaming on Indian lands. See Michigan v. Bay Mills Indian Cmty., ––– U.S. ––––, 134 S.Ct. 2024, 2034, 188 L.Ed.2d 1071 (2014).³

IGRA regulates gaming that occurs on Indian lands, which include “any lands title to which is [ ] held in trust by the United States for the benefit of any Indian tribe ... and over which an Indian tribe exercises governmental power.” 25 U.S.C. § 2703(4)(B).⁴ IGRA does not govern gaming that occurs outside of Indian lands; a state's authority to regulate such gaming is “capacious.” Bay Mills, 134 S.Ct. at 2034.

As for gaming on Indian lands, IGRA provides “a comprehensive approach to the controversial subject of regulating tribal gaming, [and strikes] a careful balance among federal, state, and tribal interests.” Florida v. Seminole Tribe of Fla. (Seminole Tribe II), 181 F.3d 1237, 1247 (11th Cir.1999).⁵ IGRA “divides gaming on Indian lands into three classes—I, II, and III—and provides a different regulatory scheme for each class.”⁶ Seminole Tribe of Fla. v. Florida (Seminole Tribe I), 517 U.S. 44, 48, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). IGRA defines class II gaming to include bingo and permits the use of “electronic, computer, or other technologic aids” in connection with the game.

25 U.S.C. § 2703(7)(A)(i).⁷ Class III gaming is “all forms of gaming that are not class I gaming or class II gaming” and includes slot machines and other casino games. 25 U.S.C. § 2703(8) ; Seminole Tribe I, 517 U.S. at 48, 116 S.Ct. 1114.

Under IGRA, the extent to which a tribe may engage in class II or class III gaming depends on how the state where the Indian lands are located has chosen to regulate such games in the state as a whole.⁸ With respect to class II and class III gaming, IGRA permits a tribe to conduct each class of gaming only if such gaming is allowed in some form within the state where the Indian lands are located. 25 U.S.C. § 2710(b)(1), (d)(1) (allowing class II or class III gaming when the state where the gaming occurs “permits such gaming for any purpose by any person, organization or entity”). IGRA imposes an additional requirement before a tribe can conduct class III gaming: the tribe and state must agree to a compact regulating the gaming, which the Secretary must approve. Id. § 2710(d)(1), (d)(3). A state must negotiate a tribal-state compact governing class III gaming in good faith. Id. § 2710(d)(3)(A).

IGRA expressly provides both tribes and states with limited express rights of action to sue in federal court with respect to tribal-state compacts. If a state fails to negotiate a tribal-state compact in good faith, a tribe may bring a civil action against the state in federal court. Id. § 2710(d)(7)(A)(i). But IGRA limits the remedies available to the tribe in such an action. The tribe may not obtain broad injunctive relief; the ultimate remedy available is that the Secretary may set forth the terms under which the tribe may engage in class III gaming on Indian lands within the state. Id. § 2710(d)(7)(B)(iv), (vii). IGRA also expressly provides states with a cause of action to sue to enjoin “class III gaming activity located on Indian lands” that is “conducted in violation of any Tribal–State compact.” Id. § 2710(d)(7)(A)(ii). No remedy other than an injunction is provided. See id.

IGRA authorizes the National Indian Gaming Commission (the “NIGC”) to regulate gaming on Indian lands. The NIGC is tasked with “monitor[ing] class II gaming conducted on Indian lands on a continuing basis” and is authorized to “inspect and examine” the premises where class II gaming occurs.⁹ Id. § 2706(b)(1), (b)(2). In addition, the NIGC may fine a tribe or close a gaming facility if it finds a tribe has conducted class III gaming on Indian lands without a compact. Id. § 2713(a)(1), (b).

In addition to this civil and regulatory scheme governing gaming on Indian lands, IGRA includes three provisions codified in the criminal code, only one of which is relevant here.¹⁰ Section 1166, titled “Gambling in Indian country,” applies to class III gaming conducted in the absence of a tribal-state compact. 18 U.S.C. § 1166(c). This section incorporates “all State laws pertaining to the licensing, regulation, or prohibition of gambling, including but not limited to criminal sanctions applicable thereto” into federal law. Id. § 1166(a). These state laws “shall apply in Indian country in the same manner and to the same extent as such laws apply elsewhere in the State.”¹¹ Id. Section 1166 makes it a federal crime to commit an act or omission involving gambling where the conduct “would be punishable if committed or omitted within the jurisdiction of the State in which the act or omission occurred,” under the state's laws “governing the licensing, regulation, or prohibition of gambling.” Id. § 1166(b). The punishment for this federal crime is the same as the punishment would be under state law for the state crime. The United States has the exclusive jurisdiction to bring criminal prosecutions for violations of § 1166(b). Id. § 1166(d).

II. FACTUAL BACKGROUND

The Tribe owns three casinos located within the state of Alabama, all of which are situated on lands held in trust by the United States for the benefit of the Tribe.¹² At the casinos, there are hundreds of machines that appear to be electronic bingo games but, Alabama alleges, are actually slot machines. These gaming devices “play like, look like, sound like, and attract the same class of customers as acknowledged slot machines,” and nearly identical machines are marketed as slot machines.¹³ First Am. Compl. at 6 ¶¶ 17–18 (Doc. 10).¹⁴

Under IGRA, the Tribe may operate bingo games but not slot machines at the casinos. Although the Alabama Constitution generally prohibits bingo gaming, Ala. Const. art. IV, § 65, nonprofit entities and private clubs are permitted to operate bingo games for prizes or money in some towns and counties for charitable, educational, or other lawful purposes. See Ala. Const. amends. 386–87, 413, 440, 506, 508, 542, 549–50, 565, 569, 599, 612, 674, 692, 732, 743–44. Because some bingo gaming is allowed under Alabama law and the NIGC Chairperson approved the Tribe's ordinance to participate in class II gaming, the Tribe may operate bingo games at its casinos. The Tribe may not, however, operate slot machines at its casinos because Alabama prohibits the operation of slot machines within the state. See, e.g., Ala.Code § 13A–12–27(a)(1) (criminalizing the possession of slot machines).

Alabama originally sued PCI as well as thirteen individuals (the “Individual Defendants”)¹⁵ in state court, seeking an injunction and a declaratory judgment on the ground that the operation of illegal slot machines at the Tribe's three casinos constitutes a public nuisance under Alabama law. See Ala.Code § 6–5–121 (authorizing Alabama to bring a lawsuit to abate a public nuisance). After the defendants...