City of Duluth v. Fond Du Lac Band of Lake Superior Chippewa, 11-3883
| Decision Date | 14 January 2013 |
| Docket Number | No. 11-3883,No. 11-3884,11-3883,11-3884 |
| Parties | City of Duluth Plaintiff - Appellee v. Fond Du Lac Band of Lake Superior Chippewa Defendant - Appellant City of Duluth Plaintiff - Appellant v. Fond Du Lac Band of Lake Superior Chippewa Defendant - Appellee |
| Court | U.S. Court of Appeals — Eighth Circuit |
Appeal from United States District Court
for the District of Minnesota - MinneapolisBefore MURPHY, BENTON, and SHEPHERD, Circuit Judges.
The central question raised in this appeal is whether certain aspects of the district court's 1994 consent decree1 involving the City of Duluth and the Fond du Lac Band of Lake Superior Chippewa should be dissolved. After the National Indian Gaming Commission (NIGC) decided that the parties' 1994 agreement was incompatible with federal law, the Band moved for dissolution of the consent decree. The City opposed the motion, and the district court granted it in part and denied it in part. Both parties appeal. We affirm in part, reverse in part, and remand.
The City of Duluth and the Fond du Lac Indian Band entered into an agreement in 1986 to establish a Fond-du-Luth gambling casino in the city. Two years later in 1988 Congress passed the Indian Gaming Regulatory Act (IGRA) to oversee the establishment and regulation of Indian casinos. 25 U.S.C. § 2701 et seq. One of the provisions in IGRA requires 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. 25 U.S.C. § 2710(b)(2)(A). After the question arose whether the parties' 1986 agreement was in compliance with these aspects of IGRA, the City and the Band began to renegotiate it at a time when the full implications of the act were still unclear.
In 1990 the Band sought to enjoin enforcement of the 1986 agreement as being in violation of IGRA. The district court2 referred the question of whether that agreement violated IGRA to the newly created National Indian Gaming Commission (NIGC). The NIGC, an independent agency within the Department of the Interior, had been vested by Congress with the responsibility for interpreting and enforcing IGRA. 25 U.S.C. § 2706. The district court was concerned that a declaratory judgment could "confuse and unsettle" the relationship between the parties if it were not based on findings by the NIGC as to the legality of the 1986 agreement. The Band's request for an injunction was therefore dismissed without prejudice pending a report and recommendation from the NIGC. Fond du Lac Band of Lake Superior Chippewa Indians v. City of Duluth, Civ. No. 5-89-0163 (D. Minn. Dec. 26, 1990) ("Fond du Lac I").
Although Congress had created the NIGC in 1988, its ability to act was delayed by the need to appoint commissioners. The first was appointed in 1990, but the third commissioner was not sworn in until 1991. Further delay was caused by the need to organize office space and orient staff. The NIGC was therefore not able to promulgate regulations or to initiate enforcement actions for quite some time after its creation. See Joseph M. Kelly, Indian Gaming Law, 43 Drake L. Rev. 501, 514-15 (1995).
The NIGC determined on September 24, 1993 that the original agreement between the City and the Band violated IGRA, and it issued a notice of violation letter. The NIGC decided not to initiate an enforcement action, however, but to give the parties an opportunity to negotiate a new contract. In 1994 the City and the Band reached a new agreement related to the casino which they then presented to the district court for its oversight and approval.
This agreement between the parties provided that the Band was the sole owner of the casino and that it would pay the City 19% of the casino's gross revenues for the period from 1994 to 2011. The rental rate for a second term from 2011 to 2036 was to be negotiated at a later date. Since the district court had earlier indicated that the NIGC should rule on the legality of any agreement between the parties, the 1994 agreement was made contingent on a determination by the NIGC that it did not violate IGRA. The parties submitted their agreement to the NIGC for its approval on June 13, 1994. Three days later the NIGC forwarded to the district court and the parties its report and recommendation which approved the agreement as being consistent with the sole proprietary interest rule established by IGRA. The district court 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. The court retained jurisdiction over the enforcement of the agreement.
Consistent with the terms of this consent decree, the Band paid the City approximately $75 million in rent for the period from 1994 until 2009. The Band then ceased making payments on the ground that it had actually been paying the City more than 19% of the casino's gross revenues because certain expenses should have been considered as offsets against revenue. The City responded by suing for breach of contract, and the Band later filed a counterclaim alleging that the consent decree was not consistent with IGRA and should therefore be dissolved.
The district court3 decided that the Band's argument about the legality of the consent decree was barred by res judicata since the decree had been approved by the court at its inception and formalized in a judgment. City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 708 F. Supp. 2d 890, 896-97 (D. Minn. 2010) ("Fond du Lac II"). The district court also decided to schedule a trial on the questionof whether the Band had overpaid the City during the 1994-2011 period. Id. at 902-03. The court further observed that the consent decree had indicated that the payment plan for the 2011-2036 extension period would be decided by arbitration. Id. at 903. After another round of arguments by the parties, the district court4 ordered the parties to submit the issues related to the extension period to arbitration. City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 2011 WL 1832786, at *1 (D. Minn. May 13, 2011) ("Fond du Lac III").
Meanwhile the Band had raised before the NIGC questions about the legality of the terms agreed on by the parties and then incorporated into the 1994 consent decree. Under IGRA, the NIGC was authorized to issue a notice of violation (NOV) "to any person for violations of any provision" of the act. 25 C.F.R. § 573.3(a). Shortly after the parties began the arbitration, the NIGC issued a NOV on July 12, 2011. In this violation notice the NIGC announced its determination that provisions agreed on in the 1994 consent decree actually violated IGRA's "sole proprietary interest" rule. It ordered the Band to cease performance under the consent decree or face sanctions, including possible closure of the Duluth casino. See 25 C.F.R. §§ 573.4, 575.4.
Following this action by the NIGC, the Band moved in the district court under Fed. R. Civ. Pro. 60(b) for dissolution of the consent decree. Citing the NIGC's determination that the consent decree was in violation of IGRA, the Band asked for prospective relief from any further obligation to comply with the decree. It also requested retrospective relief in the form of repayment of the rent it had paid to the City since 1994 and also asked that it be released from having to pay rent it had withheld from the City for the period 2009-2011. The City opposed the Band's motion.
The district court decided in an order dated November 21, 2011 that the Band "be relieved of any further compliance with its obligations under the 1994 Agreements." The court also discussed "retroactive relief," deciding that the Band could not recover its previously paid rent, and ruled that it must pay the City rent it had withheld from 2009 to 2011. Finally, a trial would be scheduled later on the issue of disputed "contra-revenues"—that is, whether the Band may recover any overpayments to the City by recognizing certain expenses as offsets against revenues.
Both parties appeal. The City appeals the prospective dissolution of the consent decree related to the 2011-2036 term. It argues that the NIGC's notice of violation did not make continued enforcement of the consent decree inequitable. The Band appeals the ruling compelling it to pay rent it had withheld from 2009 to 2011, arguing that it is entitled to receive retrospective relief under Rule 60(b)(6) from making payments required by an invalidated decree. The Band does not appeal the district court's ruling that it cannot recover the rent already paid to the City for the period from 1994 to 2009. The scheduled trial on the issue of possible overpayments is not a subject of this appeal.
Rule 60(b) of the Federal Rules of Civil Procedure allows a district court "[o]n motion and just terms" to relieve a party from the obligations of a final judgment, order, or proceeding. Fed. R. Civ. Pro. 60(b). The rule gives six reasons which may justify relief, two of which are cited here by the Band. Relief may be justified if prospective application of a judgment or order "is no longer equitable," Fed. R. Civ. Pro. 60(b)(5), or for "any other reason that justifies relief." Fed. R. Civ. Pro. 60(b)(6).
A district court's Rule 60(b) decision to grant relief is reviewed for abuse of discretion. Atkinson v. Prudential Prop. Co., 43 F.3d 367, 371 (8th Cir. 1994). A court abuses its discretion when a relevant factor that should have been givensignificant weight is not considered; when an irrelevant or improper factor is considered and given significant weight; or when all proper factors and no improper ones are considered, but the court commits a clear error of judgment in weighing those factors. Thatcher v. Hanover Ins. Group, Inc., 569 F.3d 1212, 1213 (8th Cir. 2011). An error of law is necessarily an abuse of...
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