Cheyenne-Arapaho Gaming v. National Indian Gaming

• Decision Date: 11 July 2002
• Docket Number: No. 01-CV-0632-C.,01-CV-0632-C.
• Parties: CHEYENNE-ARAPAHO GAMING COMMISSION, an agency of the Cheyenne and Arapaho Tribes of Oklahoma; Eastern Shawnee Gaming Commissioner, an agency of the Eastern Shawnee Tribe of Oklahoma; Fort Sill Apache Gaming Commission, an agency of the Fort Sill Apache Tribe of Oklahoma; Seneca-Cayuga Gaming Commissioner, an agency Seneca-Cauyga Tribes of Oklahoma, Plaintiffs, v. NATIONAL INDIAN GAMING COMMISSION; Montie Deer, Chairman of the National Indian Gaming Commission; John Ashcroft, Attorney General of the United States; United States Department of Justice; Scott Woodward, acting United States Attorney for the Northern District of Oklahoma; Robert G. McCampbell, United States Attorney for the Western District of Oklahoma, Defendants.
• Court: U.S. District Court — Northern District of Oklahoma

214 F.Supp.2d 1155

CHEYENNE-ARAPAHO GAMING COMMISSION, an agency of the Cheyenne and Arapaho Tribes of Oklahoma; Eastern Shawnee Gaming Commissioner, an agency of the Eastern Shawnee Tribe of Oklahoma; Fort Sill Apache Gaming Commission, an agency of the Fort Sill Apache Tribe of Oklahoma; Seneca-Cayuga Gaming Commissioner, an agency Seneca-Cauyga Tribes of Oklahoma, Plaintiffs, v. NATIONAL INDIAN GAMING COMMISSION; Montie Deer, Chairman of the National Indian Gaming Commission; John Ashcroft, Attorney General of the United States; United States Department of Justice; Scott Woodward, acting United States Attorney for the Northern District of Oklahoma; Robert G. McCampbell, United States Attorney for the Western District of Oklahoma, Defendants.

No. 01-CV-0632-C.

United States District Court, N.D. Oklahoma.

July 11, 2002.

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William D. Wood, Richard J. Wilson, Fulbright & Jaworski, Houston, TX, Richard W. Beckler, Fulbright & Jaworski, Washington, DC, Stephen B. Otto, Stephen B. Otto Law Offices, Newport Beach, CA, Michael Burrage, Dennison, TX, for Plaintiffs.

Phil Pinnell, Catherine J. Depew, United States Attorney, Tulsa, OK, Steven K. Mullins, U.S. Attorney's Office, Oklahoma City, OK, Cynthia S. Omberg, National Indian Gaming Commission, Washington, DC, for Defendants.

ORDER

H. DALE COOK, Senior District Judge.

Before the Court is the motion to dismiss filed by defendants, National Indian Gaming Commission; Montie Deer, Chairman of the National Indian Gaming Commission; John Ashcroft Attorney General of the United States; United States Department of Justice; Scott Woodward, acting United States Attorney for the Northern District of Oklahoma; Robert G. McCampbell, United States Attorney for the Western District of Oklahoma (collectively referred to as "defendants" or "NIGC"), pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. Plaintiffs, Cheyenne-Arapaho Gaming Commission, an agency of the Cheyenne and Arapaho Tribes of Oklahoma; Eastern Shawnee Gaming Commissioner, an agency of the Eastern Shawnee Tribe of Oklahoma; Fort Sill Apache Gaming Commission, an agency of the Fort Sill Apache Tribe of Oklahoma; Seneca-Cayuga Gaming Commissioner, an agency Seneca-Cauyga Tribes of Oklahoma, (collectively referred to as "plaintiffs" or "Tribes") have filed a complaint on August 27, 2001, and motion for injunctive relief.

Plaintiffs request two remedies within their motion for preliminary injunction. First, plaintiffs request a declaratory judgment that the "Break the Bank" game should be considered a Class II game and that the devices are, in fact, technological aids to the play. Second, the plaintiffs request a preliminary and permanent injunction prohibiting defendants from interfering with the operation of the Break the Bank game. Defendants requested and received a fourteen-day extension of time in which to file defensive pleadings. Subsequently, on September 25, 2001, defendants filed a motion to dismiss instead of filing an answer to the complaint. Plaintiffs responded to defendants' motion to dismiss on October 15, 2001. On October 30, 2001, Plaintiffs filed a supplemental response to defendants' Motion to Dismiss for Lack of Jurisdiction. On November 5, 2001, defendants replied to plaintiffs' response to motion to dismiss for lack of jurisdiction. After consideration of the briefs, arguments of the parties, and applicable law, the Court finds and concludes as follows:

Factual Background

On May 31, 2000, Kevin Washburn, who is the General Counsel of the National Indian Gaming Commission (NIGC), issued a Game Classification opinion letter to President Cyrus Schindler, Seneca Nation of Indians, Salamanca, New York. The NIGC issued this advisory opinion as a result of a field investigator's initial observed play of a gaming device called "Break the Bank" during an inspection of the Seneca Nation in New York in February, 2000. In the Game Classification Opinion Letter, NIGC's General Counsel advised President Schindler that the "Break the Bank," a/k/a "Cadillac Jack PTC Multi-Tab System," and its network of gaming devices was in fact a Class III gaming device. However, the state of Oklahoma and the plaintiffs (Cheyenne-Arapaho tribe, Eastern Shawnee tribe, Fort Sill Apache tribe, and Seneca-Cayuga tribe) have no Tribal-State compact authorizing the play of Class III gaming machines.

In considering whether the "Break the Bank" game was to be considered a Class II or Class III game under the Indian Gaming Regulatory Act ("IGRA"), the general counsel reviewed a videotape of the game taken by an NIGC investigator at Lucky Star Casino, operated by the Cheyenne and Arapaho Tribes of Oklahoma, where "Break the Bank" was also in play. The NIGC general counsel also examined a detailed description of the game that the game's marketer, Cadillac Jack, Inc., gave the Seneca Nation. The General Counsel of the NIGC concluded that the "Break the Bank" game should be considered a Class III game because it serves as an electronic facsimile of pull-tabs and not a technological aid. However, the NIGC did not threaten enforcement and has not brought an action against plaintiffs based on the letter. Nevertheless, the President of the Seneca Nation in New York, Schindler, notified NIGC that the tribe had ceased the play of "Break the Bank" prior to July 4, 2001, and the manufacturer had removed said devices by July 9, 2001.

Standard for Motions to Dismiss

There are two ways to present a motion to dismiss for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). First, a complaint may simply fail to allege facts upon which subject matter jurisdiction can be based. In that situation, "[I]t must appear beyond doubt that the plaintiff can prove no set of facts that would entitle him to relief. All well-pleaded facts, as distinguished from conclusory allegations, must be taken as true. All reasonable inferences must be indulged in favor of the plaintiff, and the pleadings must be liberally construed." Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir.1984) (citations omitted). In effect, the plaintiff is afforded the same procedural protection as would be received in a Rule 12(b)(6) analysis. "Second, a party may go beyond allegations contained in the complaint and challenge the facts upon which subject matter jurisdiction depends." Holt v. United States, 46 F.3d 1000, 1002-03 (10th Cir.1995). In addressing a factual attack, the court does not "presume the truthfulness of the complaint's factual allegations," but "has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1)." Id. The Court is empowered to dismiss the action when it appears "clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Lehman v. City of Louisville, 967 F.2d 1474, 1476 (10th Cir.1992).

Applicable Statutory/Regulatory Scheme

This case is governed by the IGRA which was passed by Congress in 1988, to codify Indian Gaming as an instrument to further tribal self-government and economic development. See 25 U.S.C. § 2701 et. seq. The IGRA established a National Indian Gaming Commission ("NIGC") as a component of the Department of Interior to oversee tribal gaming, which is divided into three categories, which are Class I, II, and III. See 25 U.S.C. § 2703(6)-(8).

In classifying Indian gaming into three categories, Congress also specified for each category the permissible scope of state regulation versus the NIGC administration. Class I includes "social games solely for prizes of minimal value or traditional forms of Indian gaming." 25 U.S.C. § 2703(6). Class I gaming is to be regulated exclusively by the Indian tribal governments, and thus is not subject to any state regulation. See 25 U.S.C. § 7310(a)(4).

Class II gaming includes several variations of bingo and non-banking card games already allowed in the state in which gaming is conducted. This classification of Indian gaming specifically does not encompass "electronic or electromechanical facsimiles of any game of chance or slot machines of any kind." 25 U.S.C. § 2703(7)(B)(ii). While the Indian tribe may regulate Class II games, it is still subject to federal oversight as promulgated by the NIGC, and also must conform to applicable state laws. See 25 U.S.C. §§ 2706(b), 2710.

Class III consists of all gaming activities not included in Class I and II. See 25 U.S.C. § 2703(8). This category is not regulated by the states, however, the tribes may only conduct Class III gaming pursuant to a Tribal-State compact approved by the Secretary of the Interior. See 25 U.S.C. §§ 2710(d), 2703(8). Class III games include casino-type table games, slot machines, lotteries, and parimutuel wagering. See 25 U.S.C. § 2703(8). See generally 25 C.F.R. § 502 (1995) (regulations promulgated by the NIGC), S.Rep. No. 100-446, 100th Cong., 2d Sess. 5, reprinted in 1988 U.S.C.C.A.N. 3071.

The IGRA contains an enforcement procedure as set forth in 25 U.S.C. § 2713. When the NIGC finds that the tribal operator of gaming is failing to comply with statutory and regulatory guidelines, the chairman issues a Notice of Violation ("NOV") to the tribal operator. The NOV contains a citation to the violated federal requirement, a description of the surrounding circumstances, measures required to correct the violation, a time limit for such correction with a notice of right to appeal to the full Commission. The NOV and any subsequent civil penalties imposed by the NIGC may be appealed to the full Commission. If the Commission upholds the Chairman's issuance of the NOV, judicial review is available in Federal District Court. See 25 U.S.C. § 2714.

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