Chicken Ranch Rancheria of Me-Wuk Indians v. California

• Decision Date: 28 July 2022
• Docket Number: 21-15751
• Parties: CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS ; Chemehuevi Indian Tribe; Blue Lake Rancheria; Hopland Band of Pomo Indians; Robinson Rancheria, Plaintiffs-Appellees, v. State of CALIFORNIA; Gavin Newsom, Governor of California, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

42 F.4th 1024

CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS ; Chemehuevi Indian Tribe; Blue Lake Rancheria; Hopland Band of Pomo Indians; Robinson Rancheria, Plaintiffs-Appellees,

v.State of CALIFORNIA; Gavin Newsom, Governor of California, Defendants-Appellants.

No. 21-15751

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 9, 2021 San Francisco, California

Filed July 28, 2022

Timothy M. Muscat (argued), Deputy Attorney General; William P. Torngren, Supervising Deputy Attorney General; Sara J. Drake, Senior Assistant Attorney General; Rob Bonta, Attorney General; Office of the Attorney General, Sacramento, California; for Defendants-Appellants.

Lester J. Marston (argued), Rapport and Marston, Ukiah, California; David B. Dehnert, Dehnert Law PC, Marina Del Rey, California; for Plaintiffs-Appellees.

George Forman, Jay B. Shapiro, and Margaret C. Rosenfeld, Forman & Associates, San Rafael, California, for Amici Curiae Bear River Band of Rohnerville Rancheria, Cahuilla Band of Indians, Cachil Dehe Band of Wintun Indians of the Colusa Indian Community, and Soboba Band of Luiseño Indians.

Kristin L. Martin, McCracken Stemerman & Holsberry LLP, San Francisco, California, for Amicus Curiae Unite Here International Union.

Laura E. Hirahara, Associate Counsel, California State Association of Counties, Sacramento, California, for Amicus Curiae California State Association of Counties.

Before: Kim McLane Wardlaw, Daniel A. Bress, and Patrick J. Bumatay, Circuit Judges.

Opinion by Judge Bress ;

Concurrence by Judge Wardlaw ;

Dissent by Judge Bumatay

BRESS, Circuit Judge:

Under the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. § 2701 et seq. , Indian tribes must enter a compact with the state in order to conduct high-stakes Las Vegas-style casino gambling, known as Class III gaming. But to prevent states from using their compact approval authority to force regulations on tribes that the states would otherwise be powerless to enact, Congress in IGRA imposed important safeguards on compact negotiations. IGRA strictly limits the topics that states may include in tribal-state Class III compacts to those directly related to the operation of gaming activities. 25 U.S.C. § 2710(d)(3)(C). States are also required to negotiate compact agreements in good faith. Id. § 2710(d)(3)(A). If a state does not negotiate in good faith, the tribe may sue in federal court and obtain remedies designed to force the state to the bargaining table and get the deal done. Id. § 2710(d)(7)(B).

We hold in this case that California failed to act in good faith in its compact negotiations with the plaintiff Tribes. The central problem with California's approach was this: it for years demanded that the Tribes agree to compact provisions relating to family law, environmental regulation, and tort law that were unrelated to the operation of gaming activities and far outside the bounds of permissible negotiation under IGRA. Through its negotiating demands, California effectively sought to use the Class III contracting process as leverage to impose its general policy objectives on the Tribes, which a state may not do. California thereby failed to act in good faith, triggering IGRA's remedial provisions.

We affirm the judgment of the court below, although, importantly, on grounds different than the district court articulated.

I

The plaintiffs are the Chicken Ranch Rancheria of Me-Wuk Indians, Blue Lake Rancheria, Chemehuevi Indian Tribe, Hopland Band of Pomo Indians, and Robinson Rancheria. The history of the Tribes' Class III negotiations with the State of California is extensive, and we recite only those events pertinent to this appeal. Some of this history is wrapped up in the history of IGRA itself, but we will limit ourselves here to the facts giving rise to this case and turn to IGRA next.

After Congress passed IGRA in 1988, California and approximately 60 tribes, including the plaintiff Tribes, entered a 1999 compact that gave Indian tribes in California the exclusive right to host Class III gaming. See In re Indian Gaming Related Cases (Coyote Valley II) , 331 F.3d 1094, 1104 (9th Cir. 2003). In return, the tribes agreed to accept various regulations and duties relating to their gaming activities. Id. at 1104–05. The 1999 compacts were set to expire on December 31, 2020, but provided for an automatic extension through June 30, 2022 for those tribes that were in negotiations to extend or replace their existing compacts, which includes the plaintiff Tribes. Very recently, California and the plaintiff Tribes agreed to extend the 1999 compacts until December 31, 2023.

Negotiations over successor compacts to the 1999 compacts have been ongoing for years. In 2014, the plaintiff Tribes joined various other Indian tribes with existing 1999 compacts to form the Compact Tribes Steering Committee (CTSC). The first formal negotiation session was held in January 2015. Between 2015 and 2019, California and the CTSC held 39 days of in-person negotiation sessions, in addition to numerous smaller sessions focused on discrete issues. Over that time, the State provided at least twelve full draft compacts to the CTSC, and the CTSC offered approximately fourteen drafts of its own.

Although the parties reached consensus on some issues, other aspects of the negotiations were fraught. For example, California sought a provision that would require the Tribes to recognize and enforce state spousal and child support judgments against tribal gaming facility employees. California also requested that the Tribes agree to extensive environmental regulations—devoting nearly 30 pages of detailed draft compact provisions to this topic alone. California also wanted the Tribes to adopt California tort law as tribal law that would apply in various situations disconnected from gaming activities, while insisting the Tribes waive sovereign immunity for tort claims and establish tort claims commissions. The Tribes maintained that these requests were insufficiently related to gaming, and that the State therefore could not negotiate for them under IGRA.

Despite these objections, the CTSC operated on a parallel path and endeavored to negotiate the disputed topics "in anticipation of the State offering meaningful concessions" of significant value. But the Tribes came to believe that California was not offering sufficient additional consideration. And California refused to accept any compact that did not include the challenged topics of negotiation. By the end of 2019, and after nearly five years of formal negotiations with the State, the plaintiff Tribes had seen enough. They withdrew from the CTSC and turned down California's existing offers. The tribes also tried one last time, proposing a "best and final offer." But California did not accept it.

In January 2019, the Tribes sued the State, alleging that California violated IGRA's duty to negotiate in good faith. On cross-motions for summary judgment, the district court agreed with the Tribes. The court concluded that California's demand for tribal enforcement of state domestic support orders "pulled negotiations into a field wholly collateral to the operation of gaming facilities," and thus constituted "per se evidence of bad faith." The court went on to explain that many of the other disputed provisions were "not at the heart of," or only "at the very edge of relevance" to, gaming activities. But the district court believed these other provisions were still "somewhat connected" to gaming and thus not a per se violation of the State's good-faith duty.

Nevertheless, because many of the disputed topics still had tenuous connections to gaming, the district court interpreted our precedents to require that the State provide "meaningful concessions" in exchange for demanding these provisions. It then found that California had failed to offer such concessions, and that California had thus not negotiated with the Tribes in good faith. The district court granted summary judgment for the Tribes and ordered that IGRA's remedial process take hold. See 25 U.S.C. § 2710(d)(7)(B)(iii)–(vii).

California now appeals the district court's decision, which we review de novo. Avery v. First Resolution Mgmt. Corp. , 568 F.3d 1018, 1021 (9th Cir. 2009). We may affirm on any ground supported by the record. Miranda v. City of Casa Grande , 15 F.4th 1219, 1224 (9th Cir. 2021).

II

To understand where California went astray in the compact negotiations, we begin by recognizing the unique and limited powers that IGRA gives states over Indian tribes. "[T]he Constitution grants Congress broad general powers to legislate in respect to Indian tribes, power that [the Supreme Court] ha[s] consistently described as ‘plenary and exclusive.’ " United States v. Lara , 541 U.S. 193, 200, 124 S.Ct. 1628, 158 L.Ed.2d 420 (2004). The corollary to this is that states generally lack the power to regulate tribes: "tribal sovereignty is dependent on, and subordinate to, only the Federal Government, not the States." Washington v. Confederated Tribes of Colville Indian Rsrv. , 447 U.S. 134, 154 (1980). Thus, "State laws generally are not applicable to tribal Indians on an Indian reservation except where Congress has expressly provided that State laws shall apply." McClanahan v. State Tax Comm'n of Ariz. , 411 U.S. 164, 170–71, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973) (quotations omitted); see Ysleta Del Sur Pueblo v. Texas , ––– U.S. ––––, 142 S.Ct. 1929, 1934, ––– L.Ed.2d –––– (2022) ("From time to time, Congress has exercised its authority to allow state law to apply on tribal lands where it otherwise would not.").

In California v. Cabazon Band of Mission Indians , 480 U.S. 202, 107 S.Ct. 1083, 94 L.Ed.2d 244 (1987), the Supreme Court held that California lacked the federal statutory authority required to regulate bingo halls on tribal lands. The Court started from the well-accepted proposition that "state laws may be applied to tribal Indians on their reservations if Congress has expressly so...