Connecticut v. U.S. Dep't of the Interior

Decision Date29 September 2018
Docket NumberCivil Action No.: 17-2564 (RC)
Citation344 F.Supp.3d 279
Parties State of CONNECTICUT and Mashantucket Pequot Tribe, Plaintiffs, v. UNITED STATES DEPARTMENT OF THE INTERIOR and Ryan Zinke, Secretary of the Interior, Defendant.
CourtU.S. District Court — District of Columbia

Mark Francis Kohler, Robert William Clark, Joseph J. Chambers, Michael K. Skold, State of Connecticut Office of the Attorney General, Special Litigation Department, Hartford, CT, Robert Lee Gips, Kaighn Smith, Jr., Drummond Woodsum MacMahon, Portland, ME, Catherine F. Munson, Keith M. Harper, Kilpatrick Townsend & Stockton, LLP, Washington, DC, for Plaintiffs.

Devon Lehman McCune, U.S. Department of Justice, Denver, CO, for Defendant.

MEMORANDUM OPINION

RUDOLPH CONTRERAS, United States District Judge

GRANTING MGM'S MOTION TO INTERVENE; GRANTING FEDERAL DEFENDANTS' MOTION TO DISMISS
I. INTRODUCTION

The approval and regulation of gambling (or "gaming") on Native American ("tribal") land requires a careful balancing of tribal, state, and federal law, and this action implicates that balance. Plaintiffs the state of Connecticut (the "state") and the Mashantucket Pequot Tribe ("Pequot") seek to amend the federally-imposed procedures authorizing gambling on Pequot land within Connecticut under the federal Indian Gaming Regulatory Act (the "IGRA"). This amendment is necessary for Pequot to operate a commercial casino on Connecticut land. The procedures require that Plaintiffs obtain the Secretary of the Interior's (the "Secretary") approval to amend them; approval the Secretary has withheld. Plaintiffs assert that the IGRA requires that the Secretary and the United States Department of the Interior (the "Department") (together, "Federal Defendants") deem the amendments approved, and they ask this Court to require the Secretary to publish a notice of approval in the Federal Register.

MGM Resorts Global Development, LLC ("MGM"), a multinational commercial casino operator, claims to have an interest in this action because the Secretary's approval of Plaintiffs' proposed amendments would give Pequot a competitive advantage over MGM in the market for commercial gambling in Connecticut and the surrounding states. First, MGM asserts that both it and Pequot have proposed the development of a casino in Bridgeport, Connecticut, and the state's approval of one proposal over the other largely hinges on the Secretary's decision at issue in this action. Second, MGM asserts that the Secretary's approval of Plaintiffs' proposed amendments would clear the final hurdle preventing the development of a casino in East Windsor, Connecticut that would directly compete with MGM's casino in Springfield, Massachusetts. Accordingly, MGM seeks to intervene as a defendant.

Now before the Court are Federal Defendants' motion to dismiss the action, MGM's motion to intervene as a defendant, and several related motions. For the reasons stated below, the Court will allow MGM to intervene as a defendant and it will dismiss Plaintiffs' complaint for failure to state a claim upon which relief may be granted.

II. FACTUAL BACKGROUND
A. Statutory and Regulatory Background

The IGRA governs Class III casino gaming—blackjack, roulette, and other table games—on tribal land. 25 U.S.C. §§ 2701 et seq. ; 25 C.F.R. § 502.4 ; Amador Cty., Cal. v. Salazar , 640 F.3d 373, 376 (D.C. Cir. 2011). It mandates that a tribe must obtain authorization from a state before conducting Class III gaming on land within that state's borders. 25 U.S.C. § 2710(d)(1)(C). Typically, such authorization is secured through a negotiated agreement between the tribe and the state, a "tribal-state compact." 25 U.S.C. § 2710(d)(3)(A). However, the IGRA authorizes the Secretary to prescribe "procedures" ("secretarial procedures" or "procedures") authorizing a tribe to conduct Class III gaming if the tribe and the state cannot reach an agreement. See 25 U.S.C. § 2710(d)(7)(B)(vii).1 The two forms of authorization—tribal-state compacts and secretarial procedures—are governed by separate subsections of the IGRA as follows.

1. Tribal-State Compact

Section 2710(d)(8) governs the approval of tribal-state compacts, and 25 C.F.R. § 293.1 et seq. implement that section. Section 2710(d)(8)(A) authorizes the Secretary to approve compacts, and 25 C.F.R. § 293.3 further authorizes the Secretary to approve amendments to those compacts. The Secretary must either approve or disapprove a tribal-state compact and its amendments within 45 days of receipt. 25 U.S.C. § 2710(d)(8)(A)(C) ; 25 C.F.R. §§ 293.4(b), 293.12. The Secretary may disapprove a compact or compact amendment for one of three reasons: (1) it violates the IGRA, (2) it violates any other provision of Federal law that does not relate to jurisdiction over gaming on tribal land, or (3) it violates the United States' trust obligations to Native Americans. 25 U.S.C. § 2710(d)(8)(B) ; 25 C.F.R. § 293.14. Importantly for this action, if the Secretary fails to explicitly approve or disapprove a tribal-state compact or amendment "described in subparagraph [2710(d)(8)(A) ]" within 45 days, the compact or amendment "shall be considered to have been approved by the Secretary ...." 25 U.S.C. § 2710(d)(8)(C) ; 25 C.F.R. § 293.12.

A tribal-state compact or compact amendment that has been approved by the Secretary or deemed approved by operation of law takes effect when notice of its approval is published in the Federal Register. 25 U.S.C. § 2710(d)(3)(B) ; 25 C.F.R. § 293.15(a). And the Secretary "shall publish ... notice of" the approval within 90 days from the date the compact or amendment was received by the Office of Indian Gaming.2 25 U.S.C. § 2710(d)(8)(D) ; 25 C.F.R. § 293.15. In other words, the Secretary may only disapprove a tribal-state compact or compact amendment within 45 days of its receipt, only for one of three specific reasons, and if the Secretary fails to disapprove the compact or compact amendment its approval must be promptly published in the Federal Register.

2. Secretarial Procedures

Section 2710(d)(7) governs the imposition of secretarial procedures for tribal gaming, when a tribe and a state cannot reach good faith agreement on a tribal-state compact. In the absence of an agreement, the tribe must first sue the state in federal court under 25 U.S.C. § 2710(d)(7)(A)(i). If the court concludes that the state failed to negotiate a compact in good faith, it shall order the parties to return to the negotiating table and produce a compact within 60 days. Id. § 2710(d)(7)(B)(iii). If the tribe and the state cannot reach agreement in 60 days, they "shall each submit to a mediator appointed by the court a proposed compact that represents their last best offer for a compact." Id. § 2710(d)(7)(B)(iv).

When the tribe and the state are sent to mediation, the mediator must "select from the two proposed compacts the one which best comports with the terms of [the IGRA] and any other applicable Federal law and with the findings and order of the court," and submit the selected compact to the state and the tribe. Id. §§ 2710(d)(7)(B)(iv), (v). If the state agrees to the selected proposed compact, the proposal will be treated as a tribal-state compact under §§ 2710(d)(3) and 2710(d)(8). Id. § 2710(d)(7)(B)(vi). But if the state does not agree, the mediator must notify "the Secretary and the Secretary shall prescribe, in consultation with the Indian tribe, procedures" for Class III gaming activities "which are consistent with the proposed compact selected by the mediator ... the provisions of [the IGRA], and the relevant provisions of the laws of the State." Id. § 2710(d)(7)(B)(vii). In summary, the remedial provisions of § 2710(d)(7) are designed to facilitate a tribal-state compact—at each step of the process the tribe and the state are given a new opportunity to negotiate—while authorizing the Secretary to impose gaming on a reluctant state if all else fails. The Department has not promulgated regulations implementing § 2710(d)(7), apart from regulations governing specific circumstances not present here.3

B. Procedural History

This case originally involved two tribes, Pequot and the Mohegan Tribe of Indians of Connecticut ("Mohegan") (together, the "Tribes"), which both operate casinos in Connecticut. Pequot has operated under secretarial procedures since 1991 (the "Pequot Procedures"), having failed to agree on a tribal-state compact with the state. Compl. ¶ 25, ECF No. 1; see also Mashantucket Pequot Tribe , 913 F.2d at 1032–33 ; 56 Fed. Reg. 24,996 (May 31, 1991). Mohegan, on the other hand, has operated under a tribal-state compact since 1994 (the "Mohegan Compact").

Compl. ¶ 24; 59 Fed. Reg. 65,130 (Dec. 16, 1994).4

Importantly, the Memoranda of Understanding implementing the Pequot Procedures and the Mohegan Compact mandate that the state receive up to thirty percent of the Tribes' gross operating revenues from certain gaming activities, and they also mandate that if the state permits "any other person" to operate such games, the state is no longer entitled to its royalty payments (the "exclusivity clauses"). See generally Pequot Procedures MOU; Mohegan Compact MOU. By their terms, both the Pequot Procedures and the Mohegan Compact may be amended only by written agreement of the tribe and the state, and the amendments do not become effective until the Secretary approves them and publishes notice of that approval in the Federal Register in accordance with 25 U.S.C. § 2710(d)(3)(B).5 Pequot Procedures at 49–50; Mohegan Compact at 47.

In 2015, the Tribes agreed to form a joint venture, MMCT Venture LLC ("MMCT"), to build and operate an off-reservation, commercial casino in East Windsor, Connecticut. Decl. of Uri Clinton ("Clinton Decl.") ¶¶ 17–19, ECF No. 11-2; see also MMCT's Articles of Organization, Mem. Supp. MGM's Mot. Leave Intervene Supp. Defs. ("MGM Intervention Mem.") Ex. A, ECF No. 11-3. In 2017, having incorporated MMCT, the Tribes secured the casino project's...

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