City of Duluth v. Nat'l Indian Gaming Comm'n

• Decision Date: 31 March 2015
• Docket Number: Civil Action No. 13-246 (CKK)
• Parties: CITY OF DULUTH, Plaintiff v. NATIONAL INDIAN GAMING COMMISSION, et al., Defendants
• Court: U.S. District Court — District of Columbia

CITY OF DULUTH, Plaintiff v. NATIONAL INDIAN GAMING COMMISSION, et al., Defendants

Civil Action No. 13-246 (CKK)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

March 31, 2015

MEMORANDUM OPINION

Plaintiff City of Duluth, Minnesota, brings this action challenging a Notice of Violation ("NOV") that the National Indian Gaming Commission (the "Commission") issued to the Fond du Lac Band of Lake Superior Chippewa (the "Band") with respect to Band's gaming establishment in the City of Duluth. This action is the latest step in a long saga pertaining to the relationship of the Band and the City of Duluth with respect to gaming, including proceedings in federal court in Minnesota, before the National Indian Gaming Commission, and, now, before this Court as well. In a nutshell, in the NOV, issued July 12, 2011, the National Indian Gaming Commission informed the Band that the 1994 Agreement between the Band and the City of Duluth violated the requirement that the Band have the "sole proprietary interest" in the gaming activity pursuant to the Indian Gaming Regulatory Act of 1988. The City of Duluth filed this action pursuant to the Administrative Procedure Act, claiming that the NOV, first, was arbitrary, capricious or otherwise not in accordance with law, and, second, exceeded Defendants' authority under the Indian Gaming Regulatory Act. The City of Duluth requests that the NOV be set aside and requests related declaratory and injunctive relief. The Federal Defendants—the Commission and Jonodev Chaudhuri, in his official capacity as Acting Chairman of the National IndianGaming Commission¹—argue that the NOV neither was arbitrary or capricious nor exceeded the scope of the Commission's authority. Before the Court are Plaintiff's [24] Motion for Summary Judgment and the Federal Defendants' [26] Cross-Motion for Summary Judgment. Upon consideration of the pleadings,² the relevant legal authorities, and the record as a whole, the Court DENIES Plaintiff's [24] Motion for Summary Judgment and GRANTS the Federal Defendants' [26] Cross-Motion for Summary Judgment. The Court concludes that the NOV was not arbitrary or capricious; that it did not exceed the scope of the Commission's authority; and that none of the other legal infirmities that Plaintiff identifies are grounds for setting aside the NOV. Accordingly, this case is dismissed in its entirety.

I. BACKGROUND

The history underlying this action is long and convoluted. Reciting this long history in full is not necessary for the resolution of the issues before the Court today. The facts pertinent to this action have been presented at length by this Court, see City of Duluth v. National Indian Gaming Commission, 7 F. Supp. 3d 30 (D.D.C. 2013), and in the related litigation occurring inthe District of Minnesota and on appeal at the Eighth Circuit Court of Appeals, see City of Duluth v. Fond du Lac Band of Lake Superior Chippewa ("Duluth I"), 702 F.3d 1147 (8th Cir. 2013); City of Duluth v. Fond Du Lac Band of Lake Superior Chippewa ("Duluth II"), 977 F. Supp. 2d 944 (D. Minn. 2013). The Court recites only the principal facts pertaining to the issues raised in the pending motions, reserving further presentation of the facts for the discussion of the individual issues below.

The Band and the City of Duluth first entered into an agreement to establish a gambling casino in the city in 1986. AR000035. Two years later, Congress passed the Indian Gaming Regulatory Act ("IGRA"), which required that "an Indian tribe have the 'sole proprietary interest' in any Indian gaming activity authorized by the act, as well as the exclusive control and responsibility for it." Duluth I, 702 F.3d at 1150 (quoting 25 U.S.C. § 2710(b)(2)(A)). After various proceedings and negotiations involving the City of Duluth, the Band, and the Commission, the District Court for the District of Minnesota "issued an order on June 22, 1994 incorporating the detailed stipulation of the parties into a consent decree which also provided that the NIGC had concluded that 'these agreements are in conformance with' IGRA.'" Id. at 1151. The Court refers to that agreement between the Band and the City of Duluth as the 1994 Agreement. The initial term of the 1994 Agreement was 17 years, ending in 2011, with an automatic renewal for a term of 25 additional years, ending in 2036. AR000039. Among other provisions, the 1994 Agreement requires the payment of annual rent by the Band to the City. AR000047. From 1994 until 2009, the parties performed under the agreement, including the Band's payment of rent to the City. AR000059. Beginning in August 2009, the Band ceased making rent payments to the City, id., setting off the chain of events that lead to the actioncurrently before this Court, as well as related proceedings before the District of Minnesota and the Eighth Circuit.

In 2011, the Commission issued the NOV, concluding that City of Duluth "possesse[d] a proprietary interest in the gaming operation and responsibility for the operation in violation of IGRA [the Indian Gaming Regulatory Act], [Commission] regulations, and the Fond du Lac Gaming Ordinance." AR000050. In order to correct the violation, the NOV stated that the "Band must cease performance under the 1994 Agreements of those provisions identified in this NOV as violating IGRA. This applies to the entire 42 year term of the 1994 Agreements." Id. Although the NOV stated that the violation may result in civil penalties, see id., the record does not reflect that the Commission took any further steps to impose such penalties or to take any other enforcement actions. The City of Duluth challenges the NOV in this action.

II. LEGAL STANDARD

Under Rule 56(a) of the Federal Rules of Civil Procedure, "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." However, "when a party seeks review of agency action under the APA [before a district court], the district judge sits as an appellate tribunal. The 'entire case' on review is a question of law." Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir. 2001). Accordingly, "the standard set forth in Rule 56[ ] does not apply because of the limited role of a court in reviewing the administrative record.... Summary judgment is [ ] the mechanism for deciding whether as a matter of law the agency action is supported by the administrative record and is otherwise consistent with the APA standard of review." Southeast Conference v. Vilsack, 684 F. Supp. 2d 135, 142 (D.D.C. 2010).

The APA "sets forth the full extent of judicial authority to review executive agency action for procedural correctness." FCC v. Fox Television Stations, Inc., 556 U.S. 502, 513 (2009). It requires courts to "hold unlawful and set aside agency action, findings, and conclusions" that are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). "This is a 'narrow' standard of review as courts defer to the agency's expertise." Ctr. for Food Safety v. Salazar (Midwest I), 898 F. Supp. 2d 130, 138 (D.D.C. 2012) (quoting Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). An agency is required to "examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made." Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43 (internal quotation omitted). The reviewing court "is not to substitute its judgment for that of the agency." Id. Nevertheless, a decision that is not fully explained may be upheld "if the agency's path may reasonably be discerned." Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286 (1974).

III. DISCUSSION

Plaintiff argues that the Commission exceeded its statutory authority in issuing the NOV and that the NOV was arbitrary and capricious. Defendants disagree and respond that the NOV was proper. The relationships among Plaintiff's several arguments, as stated in the City's Motion for Summary Judgment and in the City's Opposition to the Federal Defendants' Cross-Motion for Summary Judgment, are less than wholly clear, and the Court addresses each argument as it best understands them. The Court ultimately concludes that there is no basis for vacating the NOV or granting any other relief with respect to the NOV.³

A. The Commission Did Not Exceed Its Authority in Issuing the NOV

Plaintiff first argues that the National Indian Gaming Commission exceeded its authority pursuant to the Indian Gaming Regulatory Act by issuing the NOV.⁴ Defendants argue they had the authority to issue the NOV under 25 U.S.C. § 2713, which establishes the Commission's enforcement authority. The Court concludes that the NOV was properly issued pursuant to section 2713 and that no other provisions of the Act bar the Commission from using its enforcement authority as it did in this case.⁵

In Plaintiff's Motion for Summary Judgment, Plaintiff argues that the Commission does not have the authority to issue the NOV under section 2711 of the Act, which pertains to management contracts, or under section 2712 of the Act, which pertains to ordinances and other contracts. However, the Federal Defendants do not rely on these sections as the legal basis forthe NOV. Instead, they point to section 2713, which provides the Commission its enforcement authority. Indeed, the NOV itself states that it is issued pursuant to section 2713. See AR000035 ("Under IGRA and NIGC Regulations, the Chairwoman may issue a NOV to any person for violation of any provision of the IGRA, NIGC regulations, or an approved tribal gaming ordinance or resolution") (citing 25 U.S.C. § 2713(a) and 25 C.F.R. § 573.3(a)). Therefore, Plaintiff's arguments about other sections of the Indian Gaming Regulatory Act are only relevant insofar as those sections would prevent the Commission...