Forest Cnty. Potawatomi Cmty. v. United States

• Decision Date: 10 September 2018
• Docket Number: Civil Action No. 15-105 (CKK)
• Citation: 330 F.Supp.3d 269
• Court: U.S. District Court — District of Columbia
• Parties: FOREST COUNTY POTAWATOMI COMMUNITY, Plaintiff, v. UNITED STATES, et al., Defendants, Menominee Indian Tribe of Wisconsin and Menominee Kenosha Gaming Authority, Defendant-Intervenors.

330 F.Supp.3d 269

FOREST COUNTY POTAWATOMI COMMUNITY, Plaintiff,

v. UNITED STATES, et al., Defendants,Menominee Indian Tribe of Wisconsin and Menominee Kenosha Gaming Authority, Defendant-Intervenors.

Civil Action No. 15-105 (CKK)

United States District Court, District of Columbia.

Filed September 10, 2018

Eric Nicholas Dahlstrom, Pro Hac Vice, April E. Olson, Pro Hac Vice, Rothstein Law Firm, Tempe, AZ, Ryan Anthony Smith, Brownstein Hyatt Farber Schreck, LLP, Washington, DC, Caroline Manierre, Pro Hac Vice, Reed Bienvenu, Pro Hac Vice, Rothstein Law Firm, Santa Fe, NM, Scott D. Crowell, Pro Hac Vice, Crowell Law Offices-Tribal Advocacy Group, Sedona, AZ, for Plaintiff.

Jody Helen Schwarz, Claudia Antonacci Hadjigeorgiou, U.S. Department of Justice, ENRD Natural Resources Section, Amarveer Singh Brar, Brian Matthew Collins, U.S. Department of Justice, Environment & Natural Resources Division, Washington, DC, for Defendants.

Michael L. Roy, Hobbs, Straus, Dean & Walker, LLP, Washington, DC, for Defendants-Intervenors.

MEMORANDUM OPINION

COLLEEN KOLLAR-KOTELLY, United States District Judge

Plaintiff Forest County Potawatomi Community has brought this action under the Administrative Procedure Act ("APA") against Defendants United States of America, United States Department of the Interior, the Secretary of the Interior, and the Assistant Secretary of Indian Affairs (collectively, the "Federal Defendants"), challenging the Assistant Secretary's decision to disapprove a 2014 amendment to a gaming compact between Plaintiff and the State of Wisconsin under the Indian Gaming Regulatory Act. 25 U.S.C. §§ 2701 et. seq , ("IGRA"). The Court has previously granted the Menominee Indian Tribe of Wisconsin ("Menominee") and the Menominee Kenosha Gaming Authority's (collectively, the "Defendant-Intervenors") [22] Motion for Leave to Intervene as Defendants.

Now before the Court is Plaintiff's [79] Motion for Summary Judgment, Federal Defendants' [81] Cross-Motion for Summary Judgment, and Defendant-Intervenors' [82] Cross-Motion for Summary Judgment. Upon consideration of the pleadings,¹ the relevant legal authorities, and the record as a whole, the Court will DENY the Plaintiff's motion, GRANT the Federal Defendants' motion, and GRANT the Defendant-Intervenors' motion.

The Court finds that the Assistant Secretary's disapproval of Plaintiff's 2014 compact amendment was not arbitrary or capricious. Evidence in the administrative record supports the Assistant Secretary's determination that the 2014 compact amendment was inconsistent with IGRA. Because there is evidence to support a finding that the amendment was inconsistent with IGRA, it was not arbitrary or capricious for the Assistant Secretary to disapprove the amendment.

I. BACKGROUND

A. Statutory and Regulatory Background

Congress passed IGRA in 1988 in order "to provide a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments." 25 U.S.C. § 2702(1). IGRA divides gaming into three classes. As is relevant here, Class III games are "all forms of gaming that are not class I gaming or class II gaming." Id. at § 2703(8). Class III gaming includes slot machines and "most casino games such as blackjack and roulette." Amador Cty., Cal. v. Salazar , 640 F.3d 373, 376 (D.C. Cir. 2011).

For an Indian tribe to engage in Class III gaming, the tribe must have a tribal-state gaming compact. See 25 U.S.C. § 2710(d)(1)(C). Gaming compacts may include provisions relating to a limited number of topics. Id. at § 2701(d)(3)(C)(i-vii). Gaming compacts may fall into one of six enumerated categories or may be on "any other subjects that are directly related to the operation of gaming activities." Id. at § 2701(d)(3)(C)(vii).

All Class III gaming compacts must be submitted to the Secretary of the Department of the Interior for approval. See 25 C.F.R. § 293.4. The Secretary has delegated authority to approve or disapprove of compacts to the Assistant Secretary of Indian Affairs.

Once a gaming compact is submitted for approval, the Assistant Secretary has three options. The Assistant Secretary may: (1) approve the compact, (2) disapprove the compact, or (3) take no action for 45 days, which results in the compact being deemed approved only to the extent it is consistent with IGRA. 25 U.S.C. § 2710(d)(8). The Assistant Secretary is permitted to disapprove a compact only if the compact violates IGRA, another federal law, or the United States' trust obligations to Indians. Id. at § 2710(d)(8)(B).

B. Factual Background

Plaintiff is an Indian tribe occupying Southeastern Wisconsin. FCPCAR000005. Prior to the passage of IGRA, Plaintiff submitted an application to the United States to acquire in trust for the benefit of the tribe two parcels of land located in the city of Milwaukee, "Concordia College Land" and "Menomonee Valley Land." Id. In its application, Plaintiff explained that it intended to operate a bingo hall on the Menomonee Valley Land. Id. Some of the profits from this bingo hall would fund the Milwaukee Indian School located on the Concordia College Land which served Indian children from various Wisconsin tribes. Id.

These lands were acquired in trust for Plaintiff in 1990 under the Indian Reorganization Act. And Plaintiff's application to conduct gaming on these lands was approved under IGRA. Id. In 1991, Plaintiff opened a bingo hall. FCPCAR000006. The closest Class III gaming facility was over 110 miles away from the bingo hall. Id.

In 1992, Plaintiff and the state entered into a gaming compact to regulate the conduct of Class III gaming. Id. The compact authorized 200 gaming devices at the bingo hall. The compact also required Plaintiff to pay its proportional share of the state's $350,000 in annual costs for regulating Indian gaming. Id.

In 1998, various amendments to the 1992 compact were required. Id. Plaintiff and the state submitted a new compact amendment to the Secretary of the Interior, and the amendment was approved. Id. The 1998 compact amendment permitted Plaintiff to operate 1,000 gaming devices and 25 blackjack tables if the city and county adopted regulations allowing expanded gaming. FCPCAR000007. Additionally, the amendment increased Plaintiff's annual payment to the state to $6,375,000 and extended the 1992 compact for five additional years, with an expiration date of 2004. Id.

Plaintiff and the state again amended the original 1992 compact in 2003. Id. In 2000, Plaintiff had opened a new, larger casino, and the 2003 compact amendment authorized Plaintiff to operate an unlimited number of gaming devices as well as additional casino games. Id. As part of the amendment, Plaintiff agreed to make lump-sum payments to the state totaling $90.5 million over two years to help alleviate the state budget crisis. Id. Plaintiff also agreed to make increased annual payments to the state based on a percentage of the Class III gaming net wins. Id.

In consideration for the lump-sum payments and the increased annual payments, Plaintiff and the state negotiated a 50-mile "no-fly zone" around Milwaukee. FCPCAR000008. Under the "no-fly zone" agreement, if the state permitted Class III gaming within 50-miles of Plaintiff's casino, then Plaintiff would be relieved of its obligation to make additional payments and the state would refund some of Plaintiff's past payments. Id.

Upon the submitting the 2003 compact amendment to the Secretary, the Secretary informed Plaintiff and the state that he would not approve the amendment if the "no-fly zone" provision was included. Id. The parties removed the "no-fly zone" provision and re-submitted the amendment to the Secretary. The parties agreed to negotiate a new provision at a later date which would similarly benefit Plaintiff. FCPCAR000009. Following the submission of the amendment with the "no-fly zone" provision removed, the Secretary took no action, so the amendment was deemed approved to the extent it was consistent with IGRA. Id.

For a year and a half, the parties attempted to negotiate a substitute provision for the "no-fly zone" and to resolve other ancillary issues. FCPCAR0000011. But, Plaintiff and the state were unable to reach a complete agreement. Id. In 2005, the parties agreed to again amend the 1992 compact. Id. The 2005 compact amendment established a 30-mile "no-fly zone" and required the parties to undertake last-best-offer arbitration addressing the rights and duties of the parties in the event that another tribe opened a Class III gaming facility within 30 to 50 miles of Plaintiff's casino. Id. The 2005 compact amendment was deemed approved by the Secretary to the extent it was consistent with IGRA. FCPCAR000012. Plaintiff continued to make lump-sum payments and annual payments to the state in reliance on the compact amendment. Id.

While Plaintiff was renegotiating and amending its compact with the state, the Menominee tribe was attempting to develop an off-reservation casino for Class III gaming. In 2000, the Secretary approved Menominee's request to operate Class III gaming on an off-reservation land parcel in Kenosha, subject to the land being acquired in trust for gaming purposes. FCPCAR000685. The land parcel in Kenosha is located 33 miles away from Plaintiff's casino. FCPCAR001462. In 2004, Menominee filed an application asking the Secretary to take the Kenosha land into trust for gaming purposes. FCPCAR000685. In August 2013, the Assistant Secretary approved Menominee's application to take the Kenosha land into trust for gaming purposes. FCPCAR000014. Following the Assistant Secretary's determination, the Governor of Wisconsin had one year to concur. The Assistant Secretary granted the Governor a six-month extension, giving the Governor until February 19, 2015 to decide whether to concur. Id.²

Against this backdrop, in June 2014 the state invoked the arbitration agreement from the 2005 compact amendment with Plaintiff. The arbitration...