Lac Du Flambeau Band of Lake Superior v. Norton
| Decision Date | 01 September 2005 |
| Docket Number | No. 04-3571.,04-3571. |
| Citation | 422 F.3d 490 |
| Parties | LAC DU FLAMBEAU BAND OF LAKE SUPERIOR CHIPPEWA INDIANS, Plaintiff-Appellant, v. Gale NORTON and United States Department of the Interior, Defendants-Appellees, and Ho-Chunk Nation, Intervenor-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
v.
Gale NORTON and United States Department of the Interior, Defendants-Appellees, and
Ho-Chunk Nation, Intervenor-Appellee.
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COPYRIGHT MATERIAL OMITTED
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Carol J. Brown (argued), Brown & Lacounte, Madison, WI, for Plaintiff-Appellant.
Kathryn E. Kovacs (argued), Department of Justice, Environment & Natural Resources Division, Washington, DC, for Defendant-Appellee Gale A. Norton.
Richard D. Humphrey, Office of the United States Atty., Madison, WI, for Defendant-Appellee United States Dept. of the Interior.
Lester J. Marston, Rapport & Marston, Ukiah, CA, for Intervenor-Appellee.
Before FLAUM, Chief Judge, and POSNER and EVANS, Circuit Judges.
FLAUM, Chief Judge.
The Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. §§ 2701-2721, governs gambling conducted by Indian tribes. The IGRA allows tribes to operate casinos on their reservations or on lands held in trust for their benefit by the Secretary of the Interior ("the Secretary") only if conducted pursuant to an agreement between
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the tribe and the state where the proposed casino will be located. 25 U.S.C. § 2710(d)(1). The Secretary must independently approve the agreement — known as a "Tribal-State compact" — for gaming under that compact to be lawful. § 2710(d)(1)(C), (d)(3)(B). For several years, the Ho-Chunk Nation has operated a number of casinos pursuant to a compact with Wisconsin. In 2003, Ho-Chunk negotiated a new compact with the State authorizing it to open additional casinos. The amended compact also appears on its face to disadvantage any other tribe who might seek to operate casinos in Wisconsin. The Secretary did not comment on the compact and, because the IGRA equates 45 days of silence with approval, the new agreement took effect by operation of law. See § 2710(d)(8)(C).
The Lac du Flambeau Band of Lake Superior Chippewa Indians ("LDF"), another tribe in Wisconsin, filed this suit under the Administrative Procedures Act ("APA") against the Secretary,1 challenging her decision to permit the amended compact to take effect. After Ho-Chunk intervened, it and the Secretary moved to dismiss the suit. The district court granted their motions, holding that LDF lacked standing and that the Secretary's action was not reviewable under the APA. The court also concluded that it was required to dismiss the case because Ho-Chunk was a necessary and indispensable party which, because of its sovereign immunity, could not be joined as a defendant. LDF appeals. For the reasons stated herein, we affirm.
A. The IGRA
Before turning to the pleadings, we briefly outline the IGRA's statutory scheme. The IGRA regulates gaming conducted by Indian tribes on their reservations or on lands held in trust for their benefit by the Secretary. The Act divides all gaming into three classes, regulating each class to varying degrees. 25 U.S.C. §§ 2703(6)-(8), 2710. This case focuses on Class III gaming, the most heavily regulated of the classes, which includes casinos. Id. The Act provides that "Class III gaming activities shall be lawful on Indian lands only if such activities are . . . conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State . . . that is in effect." § 2710(d)(1)(C). A Tribal-State compact "shall take effect only when notice of approval by the Secretary of such compact has been published by the Secretary." § 2710(d)(3)(B). Thus, Class III gaming is lawful only if conducted under a compact approved by both the host state and the Secretary.
The IGRA imposes an additional layer of restrictions when a tribe seeks to conduct Class III gaming on lands that are neither within nor contiguous to the boundaries of its reservation. See § 2719(a)(1). The Act generally prohibits such "off-reservation" gaming if it would be "conducted on lands acquired by the Secretary in trust for the benefit of an Indian tribe after October 17, 1988." § 2719(a). One exception to this ban holds if:
the Secretary . . . determines that a gaming establishment on newly acquired lands would be in the best interest of the Indian tribe and its members, and would not be detrimental to the surrounding community, but only if the Governor of the State in which the gaming activity is
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to be conducted concurs in the Secretary's determination.
§ 2719(b)(1)(A). Accordingly, the Act contemplates that both the Secretary and the host state will play significant roles in regulating Indian gaming.
B. Factual Allegations
Because this is an appeal from a dismissal under Federal Rule of Civil Procedure 12(b), we summarize the facts as alleged by LDF's amended complaint. The Ho-Chunk Nation is a federally recognized tribe residing in Wisconsin. For several years, it has operated a number of casinos in that state pursuant to a Tribal-State compact. In 2003, it negotiated an amendment to the compact with Wisconsin that purports to authorize it to operate a total of nine Class III gaming facilities within the State. This case focuses on ¶ 16 of the final version of those amendments, signed on June 5, 2003. Paragraph 16 provides that if any tribe other than Ho-Chunk submits an application to the Secretary under 25 U.S.C. § 2719(b)(1)(A) to conduct gaming "on off-reservation trust lands acquired by the United States after January 1, 2003," and the Secretary determines that the establishment would be in the best interest of the tribe and not detrimental to the community:
the State shall send a written notice . . . to [Ho-Chunk] that it has received a submission from the Secretary to concur in the Determination. . . . [T]he State shall not concur in the Determination if [Ho-Chunk] has notified . . . the State, within sixty (60) days of receipt of the Notice, that the operation of the Establishment will cause a substantial reduction . . . of Class III gaming revenues at any of [Ho-Chunk's] existing gaming facilities, unless the State has entered into a binding indemnification agreement with [Ho-Chunk] to compensate it for the Reduction or the mandatory negotiations required herein have concluded and the binding arbitration procedures required herein have commenced.
After executing the amended compact, Ho-Chunk and Wisconsin presented it to the Secretary for approval.
LDF is a federally recognized Indian tribe residing in Wisconsin. It currently has an application pending with the Secretary under § 2719(b)(1)(A) to conduct Class III gaming at a site outside its reservation. Outraged at what it perceived to be the anti-competitive nature of ¶ 16, LDF urged the Secretary to reject that agreement. Several other tribes in Wisconsin joined in LDF's protest. Nevertheless, the Secretary took no position on the validity of the amended compact between Ho-Chunk and Wisconsin. The IGRA provides that "[i]f the Secretary does not approve or disapprove a compact before the date that is 45 days after the date on which the compact is submitted to the Secretary for approval, the compact shall be considered to have been approved by the Secretary, but only to the extent the compact is consistent with the provisions of this chapter." § 2710(d)(8)(C). Accordingly, forty-five days after the amended compact was submitted to the Secretary, it was deemed approved by operation of law.
LDF then filed this suit against the Secretary, relying on the APA as the sole basis for subject matter jurisdiction. Plaintiff alleges that the Secretary violated her fiduciary duty to treat all Indian tribes equally by allowing the compact to take effect. Specifically, LDF's amended complaint states that the Secretary exceeded her authority "by granting the Ho-Chunk an affirmative right to be free from economic competition." It seeks as a remedy, among other things, "an order declaring Paragraph 16 void."
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Ho-Chunk, which was not named as a defendant, moved to intervene for the limited purpose of seeking to dismiss the suit. The district court concluded that Ho-Chunk had an interest in defending the compact and allowed the intervention. Ho-Chunk and the Secretary then moved to dismiss, and the court granted their motions on three grounds. First, the district court held that LDF had not alleged an actual or imminent injury, and therefore lacked standing to challenge the Secretary's action. It reasoned that one of several contingencies could occur to prevent LDF from being harmed by the anti-competitive provisions of the amended compact. Second, the court held that the APA's grant of judicial review did not extend to the Secretary's passive approval of the compact. Third, it concluded that because LDF sought to invalidate a portion of the compact, Ho-Chunk, as a signatory to that agreement, was a necessary and indispensable party. Because Ho-Chunk enjoys sovereign immunity, however, the district court concluded that it could not be joined as a defendant. Accordingly, the court held that dismissal was required by Federal Rule of Civil Procedure 19(b). LDF appeals.
We review the district court's dismissal of LDF's amended complaint de novo. Centers v. Centennial Mortgage, Inc., 398 F.3d 930, 933 (7th Cir.2005). "A court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).
Appellees argue that dismissal was proper because: (i) LDF lacks standing; (ii) the APA does not afford judicial review of the Secretary's action; and (iii) Ho-Chunk is a necessary and indispensable party which cannot be joined due to its sovereign immunity. As we explain below, LDF has standing to bring this suit. We hold, however, that plaintiff has forfeited any claim that...
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