Kansas ex rel. Schmidt v. Nat'l Indian Gaming Comm'n

Decision Date17 December 2015
Docket NumberCase No. 15-CV-4857-DDC-KGS
Citation151 F.Supp.3d 1199
Parties State of Kansas, ex rel. Derek Schmidt, Attorney General, State of Kansas, and Board of County Commissioners of Cherokee County, Kansas, Plaintiffs, v. National Indian Gaming Commission, et al., Defendants.
CourtU.S. District Court — District of Kansas

151 F.Supp.3d 1199

State of Kansas, ex rel. Derek Schmidt, Attorney General, State of Kansas, and Board of County Commissioners of Cherokee County, Kansas, Plaintiffs,
v.
National Indian Gaming Commission, et al., Defendants.

Case No. 15-CV-4857-DDC-KGS

United States District Court, D. Kansas.

Signed December 17, 2015
Filed December 18, 2015


151 F.Supp.3d 1204

Derek L. Schmidt, Jeffrey A. Chanay, Stephen O. Phillips, Office Of Attorney General, David R. Cooper, Fisher, Patterson, Sayler & Smith, LLP, Sarah A. Morse, Goodell, Stratton, Edmonds & Palmer, LLP, Topeka, KS, for Plaintiffs.

Daron T. Carreiro, U.S. Department of Justice, Washington, DC, Paul M. Croker, Armstrong Teasdale LLP, Kansas City, MO, Daniel E. Gomez, R. Daniel Carter, Stephen R. Ward, Conner & Winters, LLP, Tulsa, OK, for Defendants.

MEMORANDUM AND ORDER

Daniel D. Crabtree, United States District Judge

Plaintiffs, the State of Kansas and the Board of County Commissioners of Cherokee County, Kansas, bring this action. They seek declaratory and injunctive relief under the Administrative Procedure Act, 5 U.S.C. § 701 et seq . ; the Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et seq . ; the Declaratory Judgment Act, 28 U.S.C. §§ 2201 -02 ; and the United States Constitution. They assert claims against two distinct groups of defendants. This Order refers to the first group, consisting of the National Indian Gaming Commission, Chair Jonodev Osceloa Chaudhuri, Associate Commissioner Daniel J. Little, General Counsel Eric N. Shepard, the U.S. Department of the Interior, Secretary of the Interior Sally Jewell, and Assistant Secretary of Indian Affairs Kevin K. Washburn, as the “federal defendants.” It refers to the second group, consisting of the Downstream Development Authority of the Quapaw Tribe of Oklahoma, the Quapaw Casino Authority of the Quapaw Tribe of Oklahoma, the Quapaw Tribal Development Corporation, and 18 individual officers and members of the tribal entities, as the “tribal defendants.”

This matter is before the Court on multiple motions to dismiss. The federal defendants filed a Motion to Dismiss Amended Complaint (Doc. 42). The tribal defendants filed five, nearly identical Motions to Dismiss (Docs. 50, 55, 68, 76, 86) after receiving service of plaintiffs' Amended Complaint (Doc. 13) at different

151 F.Supp.3d 1205

times. Plaintiffs have responded to all motions and both the federal defendants and tribal defendants have filed replies. For reasons explained below, the Court grants the motions filed by both groups of defendants.

I. Factual Background

A. Acronyms and Other Abbreviations

To express its ruling on the motions, the Court must refer to a number of agencies, other entities, and various regulatory and legislative provisions. Hoping to assist those who read this Order, the Court begins with a glossary of acronyms and other abbreviated jargon it uses.

Defined Term

Meaning

"APA"

Administrative Procedure Act

"BIA"

Bureau of Indian Affairs

"DDA"

Downstream Development Authority of the Quapaw Tribe of Oklahoma

"DJA"

Declaratory Judgment Act

"DOI"

United States Department of the Interior

"IGRA"

Indian Gaming Regulatory Act

"NIGC"

National Indian Gaming Commission

"OGC"

National Indian Gaming Commission Office of General Counsel

"TDC"

Quapaw Tribal Development Corporation

"QCA"

Quapaw Casino Authority of the Quapaw Tribe of Oklahoma

"Quapaw"

Quapaw Tribe of Oklahoma

B. Relevant History

The Quapaw is a federally recognized Indian tribe. In 1833, the Quapaw entered into a treaty with the United States. Under the terms of that treaty, the Quapaw agreed to leave its original territory in Arkansas and relocate to a reservation located near what later became the border separating Oklahoma and Kansas. The Quapaw reservation encompassed 150 sections of land, and the majority of those sections were located on the Oklahoma side of the state boundary. The Kansas portion, known as the “Quapaw Strip,” extended only one-half mile north of the state border. On February 23, 1867, the Quapaw ceded the Quapaw Strip—except for a small parcel set aside for one Quapaw member—to the United States. In 1895, the United States dissolved the remainder of the Quapaw reservation and allotted the Quapaw's Oklahoma land to individual members of the Quapaw Tribe under the Act of March 2, 1895. See ch. 188, 28 Stat. 876, 907 (1895).

Years later, the Quapaw purchased a tract of land in Oklahoma. The tract is adjacent to the Kansas-Oklahoma border

151 F.Supp.3d 1206

and within the historic boundaries of the Quapaw's reservation. The Quapaw placed the land it had acquired into a trust with the Secretary of the Interior shortly after acquiring it. In 2006, the Quapaw purchased a 124-acre tract of land in Cherokee County, Kansas (the “Kansas Land”). It too is directly adjacent to the Kansas-Oklahoma border and entirely within the historic boundaries of the Quapaw's reservation—i.e. , the Quapaw Strip.

In 2008, the Quapaw opened the Downstream Casino Resort on its Oklahoma trust land, just south of the Kansas-Oklahoma border. The Quapaw constructed the primary parking lot, several ancillary facilities, and other infrastructure for the Downstream Casino across the Kansas-Oklahoma border on the Kansas Land.

On April 25, 2011, the Quapaw notified the State of Kansas that it had filed an application with the DOI to have the Kansas Land taken into trust. The Quapaw titled the notice a “Notice of (Gaming) Land Acquisition Application.” Doc. 13-3 at 5. Part of this application called on the Quapaw to provide information about “Project Description/Proposed Land Use.” In response, the Quapaw stated: “[the] property is to be used for additional parking for the Downstream Resort/Casino.” Id . at 6 (emphasis omitted).

On February 6, 2012, Kansas Governor Sam Brownback received a similar notice from the BIA, informing him that the Quapaw had filed a “land into trust” application. The BIA titled its notice a “Notice of (Non-Gaming) Land Acquisition Application.” Doc. 13-2 at 1 (emphasis omitted). The BIA described the Quapaw's proposed use of the Kansas land as follows:

The property is commonly identified as the “Downstream Parking Lot.” A portion of the property is currently an existing parking lot and the Tribe plans to continue with that use. A portion of the property is primarily agricultural and there are no plans for development of this property at this time. Therefore, there is no expected change in use of the property at this time.

Id . at 2. To inform the BIA's decision whether to take the Kansas Land into trust, the BIA's notice invited the State to submit written comments about the Quapaw's application.

The State submitted objections about the Quapaw's application to the BIA on March 5, 2012. The State based its primary objection “on a concern that [the Kansas Land] would be used for expanded gaming operation[s].” Doc. 13-3 at 1. The State attached a copy of the Quapaw's April 25, 2011 notice—titled a “Notice of (Gaming) Land Acquisition Application”—to its objections and also opined that “[i]t would seem, based on this letter's express reference to ‘gaming,’ that expanded gaming on this parcel is indeed possible. Although, the BIA's letter of February 3, [2012], is a notice of ‘non-gaming’ acquisition, that is not legally determinative of the tribe's proposed use of the land.” Id . The State also objected to the BIA's consideration of the application as an “on-reservation” request. Id .

Plaintiff Cherokee County sent the BIA a letter echoing the State's objections. See Doc. 15-3 at 2. But the County later withdrew its objections, explaining: “After consultation with local elected officials, business and community leaders[,] and residents from ... Cherokee County, the Commission believes it is in the County's best interests to withdraw[ ] their prior letter of opposition.” Doc. 15-3 at 3.

The BIA took the Kansas Land into trust on June 8, 2012. In doing so, the BIA concluded that the Quapaw's “request adequately describe[d] the purpose for which the land will be used.” Doc. 13-4 at 3. In

151 F.Supp.3d 1207

response to the State's objection about the application being an “on-reservation” request, the BIA concluded that 25 C.F.R. § 151.3(a)(1) permitted the BIA to take the land into trust because it was “contiguous and adjacent to the historic reservation boundaries of the [Quapaw] Tribe.” Doc. 13-4 at 4. The State did not appeal the BIA's decision.

In early 2013, the Quapaw asked the Office of General Counsel for the National Indian Gaming Commission to issue an advisory opinion addressing whether the Kansas Land satisfied the “last recognized reservation” exception to the IGRA's prohibition against gaming on trust lands acquired after October 17, 1988. See 25 U.S.C. § 2719(a)(2)(B). This exception provides:

(a) Prohibition on lands acquired in trust by Secretary

Except as provided in subsection (b) of this section, gaming regulated by this chapter shall not be conducted on lands acquired by the secretary in trust for the benefit of an Indian tribe after October 17, 1988, unless—

...

(2) the Indian tribe has no reservation on October 17, 1988, and—

...

(B) such lands are located in a State other than Oklahoma and are within the Indian tribe's last recognized reservation within the State or States within which such Indian tribe is presently located.

Id .

As part of its analysis of the Quapaw's request, the OGC sent a letter to Kansas Attorney General Derek Schmidt (the “Kansas AG” or “General Schmidt”) notifying him of the Quapaw's request and soliciting his comments. See Doc. 13-6. General Schmidt's office responded on June 21, 2013. See Doc. 13-7. This response advanced two arguments against the capacity of the Kansas Land to qualify under the IGRA's last recognized reservation exception. First, because the Quapaw had placed the Kansas Land in trust for non-gaming purposes, the Kansas AG asserted that the Quapaw should be “equitably estopped from putting forth this parcel as one appropriate for gaming.” Doc. 13-7...

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