Confed. Tribes and Bands of Yakama Indian v. Lowry, No. CY-95-3077-AAM.

CourtUnited States District Courts. 9th Circuit. Eastern District of Washington
Writing for the CourtMcDonald
Citation968 F.Supp. 531
PartiesCONFEDERATED TRIBES AND BANDS OF the YAKAMA INDIAN NATION, a Federally Recognized Indian Tribe, Plaintiff, v. Mike LOWRY, in His Official Capacity as Governor of the State of Washington, and the State of Washington, a State of the United States of America, Defendants.
Decision Date19 December 1996
Docket NumberNo. CY-95-3077-AAM.
968 F.Supp. 531
CONFEDERATED TRIBES AND BANDS OF the YAKAMA INDIAN NATION, a Federally Recognized Indian Tribe, Plaintiff,
Mike LOWRY, in His Official Capacity as Governor of the State of Washington, and the State of Washington, a State of the United States of America, Defendants.
No. CY-95-3077-AAM.
United States District Court, E.D. Washington.
December 19, 1996.
Order denying motion for reconsideration February 18, 1997.

Page 532

Jerome L. Levine, Los Angeles, CA, Mary L. Prevost, Levine & Associates, Seattle, WA, for Plaintiff.

Jonathan T. McCoy, Asst. Atty. Gen., Olympia, WA, for Defendants.


McDONALD, Senior District Judge.

BEFORE THE COURT is the defendants' motion to dismiss (Ct.Rec.23) heard with oral argument on December 16, 1996. Jerome L. Levine, Esq., and Mary Prevost, Esq., appeared on behalf of plaintiff. Jonathan T. McCoy, Assistant Attorney General for the State of Washington, appeared on behalf of defendants.

The defendants move to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(1) (lack of subject matter jurisdiction); 12(b)(2) (lack of personal jurisdiction); and 12(b)(6) (failure to state a claim upon which relief can be granted).


I. Failure To State A Claim Upon Which Relief Can Be Granted

A Rule 12(b)(6) dismissal is proper only where there is either a "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1988). In reviewing a 12(b)(6) motion, the court must accept as true all material allegations in the complaint, as well as reasonable inferences to be drawn from such allegations. Mendocino Environmental Center v. Mendocino County, 14 F.3d 457, 460 (9th Cir.1994); NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir.1986). The sole issue raised by a 12(b)(6) motion is whether the facts pleaded, if established, would support a claim for relief; therefore, no matter how improbable those facts alleged are, they must be accepted as true for purposes of the motion. Neitzke v. Williams, 490 U.S. 319, 326-27, 109 S.Ct. 1827, 1832-33, 104 L.Ed.2d 338 (1989).

Plaintiff's complaint alleges the State of Washington operates its lottery on the Yakama Indian Nation Reservation in violation of the Indian Gaming Regulatory Act, specifically

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25 U.S.C. § 2710(b)(4) and (d)(1)(A)(ii).1

According to plaintiff, the state lottery qualifies as a Class III gaming activity and as such can only lawfully be conducted on Indian lands if it is authorized by an ordinance or resolution that: (i) is adopted by the governing body of the Indian tribe having jurisdiction over such lands; (ii) meets the requirements of subsection (b) of this section (§ 2710(b)); and (iii) is approved by the Chairman of the National Indian Gaming Association. 25 U.S.C. § 2710(d)(1)(A). Furthermore, the activity must be located in a State that permits such gaming for any purpose, by any person, organization or entity, and it must be conducted in conformance with a tribal-state compact which is in effect. 25 U.S.C. § 2710(d)(1)(B) and (C).

25 U.S.C. § 2710(b)(4)(A)2 provides:

A tribal ordinance or resolution may provide for the licensing or regulation of Class II gaming activities owned by any person or entity other than the Indian tribe and conducted on Indian lands, only if the tribal licensing requirements include the requirements described in the subclauses of subparagraph (B)(i) and are at least as restrictive as those established by State law governing similar gaming within the jurisdiction of the State within which such Indian lands are located. No person or entity, other than the Indian tribe, shall be eligible to receive a tribal license to own a Class II gaming activity conducted on Indian lands within the jurisdiction of the Indian tribe if such person or entity would not be eligible to receive a State license to conduct the same activity within the jurisdiction of the State.

25 U.S.C. § 2710(b)(4)(B)(i) provides:

The provisions of subparagraph (A) ... shall not bar the continued operation of an individually owned Class II gaming operation that was operating on September 1, 1986, if —

(I) such gaming operation is licensed and regulated by an Indian tribe pursuant to an ordinance reviewed and approved by the [National Indian Gaming] Commission ...

(II) income to the Indian tribe from such gaming is used only for the purposes described in subparagraph (2)(B) of this subsection,

(III) not less than 60 percent of the net revenues is income to the Indian tribe, and

(IV) the owner of such gaming operation pays an appropriate assessment to the National Indian Gaming Commission ... for regulation of such gaming.

Plaintiff contends the State of Washington has failed to procure the license required by 25 U.S.C. § 2710(b)(4)(A) and has failed to comply with the requirements of § 2710(b)(4)(B), in particular the payment of net revenues to the plaintiff. Plaintiff seeks: 1) damages in an amount yet to be determined, but in excess of one million dollars; and 2) imposition of a constructive trust on the State's funds for the benefit of the Yakama Nation to the extent such funds represent 60% of the net profits derived by the State from its gambling activities on the Yakama Reservation, and for an accounting of all such activities and of all funds derived therefrom, since those activities began.

Although the IGRA clearly refers to gaming activity by non-tribal persons or entities (i.e. 25 U.S.C. § 2710(b)(4)(A)), there is no specific reference to gaming activity conducted by States. IGRA's legislative history is similarly devoid of any specific reference to gaming activity conducted by States. 5 U.S.Code Cong. and Adm. News, at pp. 3071 et seq. The plaintiff concedes as much, but contends this is inconsequential because IGRA's reference to non-tribal persons or entities is intended to include States.

In Coeur d'Alene Tribe v. State of Idaho, 842 F.Supp. 1268, 1282 (D.Idaho 1994), affirmed,

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51 F.3d 876 (9th Cir.1995), the Idaho district court concluded it was "obvious" that a state lottery is a Class III gaming activity subject to IGRA's provisions regarding such activity.3 Because it was undisputed there was no Nez Perce resolution authorizing Class III gaming activity on the Nez Perce Reservation, nor was there a compact between the State and the Nez Perce tribe authorizing such activity, the Idaho district court found that neither the tribe nor any non-tribal entity, including the State of Idaho, could conduct Class III gaming on the reservation.

In a very brief opinion, the Ninth Circuit affirmed the Idaho district court "substantially for the reasoning advanced" by the district court. The circuit's only substantive comment was that "[B]ecause Idaho does not permit Class Ill gaming activities, we hold that the Coeur d' Alene Tribe has no right to engage in those activities." It appears the circuit, at least tacitly, disagreed with the district court's determination that the Idaho State lottery is a Class III gaming activity. Furthermore, there is nothing in the circuit's opinion explicitly affirming the Idaho district court's opinion that state lotteries are subject to IGRA's regulatory provisions. Accordingly, Coeur d'Alene has no precedential impact insofar as this court's determination of whether the plaintiff has stated a claim upon which relief can be granted. This court is not bound by the Idaho district court opinion.

There are two reasons which persuade the court that Congress did not intend IGRA to apply to State-operated gaming activity. First and foremost is that the State is not just any non-tribal entity. The State is a sovereign entity. In addition to seeking dismissal of plaintiff's complaint on the basis of Fed.R.Civ.P. 12(b)(6), the defendants seek dismissal on the basis of the 11th Amendment which prohibits the exercise of federal jurisdiction over suits against unconsenting States.4 The 11th Amendment is a jurisdictional issue, and therefore technically distinct from whether plaintiff's complaint states a claim upon which relief can be granted. However, if Congress did not abrogate the States' 11th Amendment immunity through the IGRA, or condition the States' participation in the IGRA on a waiver of such immunity, it is probable Congress did not intend that State-operated gaming activity would be subject to IGRA's regulatory provisions.

25 U.S.C. § 2710(d)(7)(A)(i) provides United States district courts with jurisdiction over any cause of action initiated by an Indian tribe arising from the failure of a State to enter into negotiations with the tribe for the purpose of entering into a compact or to conduct such negotiations in good faith. 25 U.S.C. § 2710(d)(7)(A)(ii) provides jurisdiction over any cause of action initiated by a State or Indian tribe to enjoin a Class III gaming activity located on Indian lands and conducted in violation of any tribal-state compact that is in effect.

"Congress may abrogate the States' constitutionally secured immunity from suit in federal court only by making its intention unmistakably clear in the language of the statute." Seminole Tribe of Florida v. Florida, ___ U.S. ___, ___, 116 S.Ct. 1114, 1123, 134 L.Ed.2d 252 (1996) quoting Dellmuth v. Muth, 491 U.S. 223, 227-28, 109 S.Ct. 2397, 2400, 105 L.Ed.2d 181. Seminole involved a suit by the Seminole Tribe against the State of Florida and its Governor for an alleged failure to negotiate a tribal-state compact in good faith.5 The Supreme Court found the

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IGRA was "unmistakably clear" in its intent to abrogate the States' immunity and make them subject to suit in federal court for failure to enter into negotiations for a tribal-state compact or to conduct such negotiations in good faith. Congress clearly intended to abrogate the sovereign immunity of the States pursuant to 25 U.S.C. § 2710(d)(7)(A...

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