American Greyhound Racing, Inc. v. Hull

Decision Date03 July 2001
Docket NumberNo. CIV. 00-2388-PHX-RCB.,CIV. 00-2388-PHX-RCB.
PartiesAMERICAN GREYHOUND RACING, INC., et al., Plaintiffs, and Tucson Greyhound Park, Inc., Plaintiff in Intervention, v. Jane Dee HULL, et al., Defendants.
CourtU.S. District Court — District of Arizona

Neil Vincent Wake, Linda Delmor Skon, Law Offices of Neil Vincent, Phoenix, AZ, for Plaintiffs.

W. Scott Bales, Thomas John Dennis, Atty. Gens. Office, Phoenix, AZ, Richard Wingfield Garnett, III, Maricopa County Atty's Office, Phoenix, AZ, for Defendants.

Donald M. Peters, Timothy Andrew LaSota, Miller, LaSota & Peters, PLC, Phoenix, AZ, for Intervenor Plaintiff.


BROOMFIELD, Senior District Judge.

This is a case with potentially serious implications for the future of gaming in Arizona. A synopsis of the court's decision can be found beginning on page 1029.

The Plaintiffs are permittees of horse and dog racing facilities in Arizona. Am. Compl. (doc. # 45) ¶¶ 1-2. The Plaintiff-Intervenor Tucson Greyhound Park, Inc., is a permittee for a dog racing enterprise. Am. Compl. (doc. # 52) ¶ 1. The Defendants include state authorities responsible for negotiating gaming compacts with Indian tribes and enforcing state laws prohibiting certain forms of gaming. Id. ¶¶ 3-5. At issue is the kind and breadth of gaming that the Arizona Governor may include in compacts with Indian tribes. The Plaintiffs and the Intervenor seek to enjoin the Governor from entering new, renewed or modified gaming compacts that would allow Indian tribes in Arizona to conduct slot machine, keno or blackjack gaming. Of the nineteen gaming compacts currently obtaining between the State and tribes, the first will begin to expire in 2003.

I. Procedural Background

This action began in the Superior Court in Maricopa County in November, 2000. The Plaintiffs seek injunctive relief by means of special action against the Governor, Jane Dee Hull, and the Attorney General, Janet Napolitano. The Plaintiffs name the State of Arizona as a defendant to preserve their right to attorneys' fees in the event they prevail. Richard Romley, the County Attorney for Maricopa County, is named so that in the event the court grants the Plaintiffs' alternative form of relief — an injunction against criminal prosecution — such relief may be effective. Romley has not actively participated in this litigation. It should be understood that where the court refers to "the Defendants," the State and its officers (and not Romley) are intended, unless otherwise noted.

The Plaintiffs requested that the case proceed on an accelerated basis. The Plaintiffs alleged that the Defendants were in the course of negotiating new or modified gaming compacts with Indian tribes, and that if compacts were concluded, the case would not be able to go forward. Accordingly, they believed expeditious treatment of their claims was necessary. The judge in the Superior Court granted the request.

All Defendants removed the matter on December 15, 2000. Notice of Removal (doc. # 1). The case was assigned to United States District Judge James A. Teilborg. On January 14, 2001, Judge Teilborg permitted Tucson Greyhound Park, Inc., to intervene as a plaintiff pursuant to a stipulation by the parties (doc. # 12). Judge Teilborg recused himself on January 16, 2001, and the case was reassigned to United States District Judge John W. Sedwick. On January 26, 2001, Judge Sedwick recused himself. At that time, the matter came before this court.

On February 1, 2001, the court held a preliminary scheduling conference, at which time the Plaintiffs reiterated their desire for a ruling on the merits on an expedited basis. The Defendants asserted that potentially dispositive motions should be heard first. Shortly thereafter the court announced a briefing schedule. The parties were required to file dispositive motions and/or trial briefs, responses and replies prior to the trial. It was understood that a hearing on the motions and the trial would be held on same day.1

Since then, the court has approved a consent preliminary injunction submitted by the parties pursuant to a written stipulation. Order of February 16, 2001 (doc. # 53). The injunction prohibits the Defendants from entering any new, modified, or renewed gaming compacts until disposition of this case.

Several dispositive motions are now before the court. They are: Defendants' Motion to Dismiss (Justiciability) (doc. # 49), Defendants' Motion to Dismiss for Failure to Join Indispensable Parties (doc. # 28), Defendants' Motion to Dismiss Amended Complaint for Failure to Join Indispensable Parties (doc. # 50), and Plaintiffs' Motion for Summary Judgment (doc. # 46). The court heard oral argument on the motions on April 12, 2001, at which time it took the matter under advisement. Also on April 12, 2001, the court took evidence and held a trial on the merits. The Joint Statement of Facts (JSOF) submitted by the parties includes a stipulation that all the exhibits are admissible, although the parties do not stipulate to their relevance and reserve the right to challenge the relevance or materiality of any fact or document at any point in these proceedings. For purposes of this order, all the exhibits are part of the record.

II. Factual Background

Beginning in 1993, Arizona governors have entered into gaming compacts with tribes. Am. Compl. ¶ 10. Tribal gaming in Arizona is governed by the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. §§ 2701 et seq., and by state law, which IGRA incorporates by reference. IGRA establishes three classes of gaming. Class I includes social games for prizes of minimal value and traditional forms of Indian gaming. 25 U.S.C. § 2703(6). Class II includes bingo and certain card games. Id. § 2703(7)(A). Class III is the default category, capturing any games not falling into classes I or II. Id. § 2703(8). Slot machines and blackjack are types of class III gaming, see id. § 2703(7)(B) (excluding such games from Class II), and so is keno, a house banking game, see 25 C.F .R. § 502.4(2). Tribes must reach a compact with the state where tribal lands are located in order to operate class III gaming on those lands. 25 U.S.C. § 2710(d).

Under Arizona law, the Governor has authority to negotiate the terms of compacts on behalf of the State. See A.R.S. § 5-601. In the event negotiations fail, the Governor must enter into a standard form compact with any tribe wanting to sign on to its terms. A.R.S. § 5-601.01. Seventeen of the twenty-one recognized tribes in Arizona have entered into compacts, all on substantially similar terms. See Motion to Dismiss (doc. # 28), Hart Aff. ¶ 4.

The compacts authorize specific types of class III gaming, including slot machines, keno, lotteries, off-track pari-mutuel wagering, and pari-mutuel wagering on horse and dog racing. Ex. A to Hart Aff. (Salt River Pima-Maricopa Indian Community/State of Arizona gaming compact) § 3(a). Each compact provides for automatic renewal after the initial term. Hart. Aff. ¶ 5. Specifically, the typical duration clause reads:

(1) This Compact shall be in effect for a term of ten (10) years after the effective date.

(2) The duration of this Compact shall thereafter be automatically extended for terms of five (5) years, unless either party serves written notice of nonrenewal on the other party not less than one hundred eighty (180) days prior to the expiration of the original term of this Compact or any extension thereof.

Salt River Pima-Maricopa compact § 23(b). The termination clause provides:

This Compact may be voluntarily terminated by mutual agreement of the parties, or by a duly adopted ordinance or resolution of the Tribe revoking the authority to conduct Class III gaming upon its lands, as provided for in 25 U.S.C. § 2710(d)(2)(D).

Id. § 23(c). The enforceability clause provides in relevant part:

(2) In the event that federal law changes to prohibit the gaming authorized by this Compact, the State may seek, in a court of competent jurisdiction, a declaration that this Compact is invalid.

(3) This Compact shall remain valid and enforceable against the State and the Tribe unless or until it is held to be invalid in a final non-appealable judgment or order of a court of competent jurisdiction.

Id. § 23(d).

These compact terms form the basis of the relationship between the State and tribes engaged in gaming. The Defendants admit that "the Governor is considering the possibility of executing renewed, amended compacts" to take effect when current compacts expire in 2003. Answer ¶ 5 (doc. # 72). The Defendants maintain that renewal negotiations between the State and the Indian tribes were initiated in December 1999 by the tribes, id., and are presently underway. They have included discussions about slot machines and blackjack. Id. Apparently longer compact terms have also been contemplated, for the Governor disputes the Plaintiffs' suggestion that her authority is limited to compacts for terms not exceeding ten years. Id. ¶ 12.

The Plaintiffs and Intervenor claim they do not intend to disturb the existing compacts. Rather, they express alarm at the prospect of renewal of the existing compacts or execution of new compacts. They contend that they have been injured by the advent of slot machine, keno and poker gaming on Indian reservations. Am. Compl. ¶ 15. The Plaintiffs are concerned by the possibility that the State could increase the concentration of gaming on the reservations. Id. ¶¶ 13, 15. They foresee a "massive expansion and extension in quantity and types" of tribal gaming. Id. ¶ 44. The Plaintiffs predict that heightened...

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