LAC du FLAMBEAU BAND OF LK. SUPERIOR v. Wisconsin, 90-C-408-C.

• Decision Date: 18 July 1990
• Docket Number: No. 90-C-408-C.,90-C-408-C.
• Citation: 743 F. Supp. 645
• Parties: LAC du FLAMBEAU BAND OF LAKE SUPERIOR CHIPPEWA INDIANS; and the Sokaogon Chippewa Community, Plaintiffs, v. STATE OF WISCONSIN; Tommy G. Thompson, Governor of the State of Wisconsin; Donald J. Hanaway, Attorney General of the State of Wisconsin; David Vernon Penn, District Attorney of Vilas County, Wisconsin; and Janet L. Marvin, District Attorney of Forest County, Wisconsin, Defendants.
• Court: U.S. District Court — Western District of Wisconsin

743 F. Supp. 645

LAC du FLAMBEAU BAND OF LAKE SUPERIOR CHIPPEWA INDIANS; and the Sokaogon Chippewa Community, Plaintiffs, v. STATE OF WISCONSIN; Tommy G. Thompson, Governor of the State of Wisconsin; Donald J. Hanaway, Attorney General of the State of Wisconsin; David Vernon Penn, District Attorney of Vilas County, Wisconsin; and Janet L. Marvin, District Attorney of Forest County, Wisconsin, Defendants.

No. 90-C-408-C.

United States District Court, W.D. Wisconsin.

July 18, 1990.

Bruce R. Greene, Boulder, Colo., and Milton Rosenberg, Madison, Wis., for plaintiffs.

Edward S. Marion, Madison, Wis., for defendants.

OPINION AND ORDER

CRABB, Chief Judge.

This is a civil action for declaratory and injunctive relief in which two federally acknowledged Indian tribes seek enforcement of provisions of the Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et seq. In addition, the tribes seek to enjoin defendants from initiating any criminal process against them, their governing tribal councils, their casino employees, suppliers or patrons during the pendency of this action and thereafter.

Jurisdiction is invoked pursuant to 28 U.S.C. § 1362 and 25 U.S.C. § 2710(d)(7)(A)(i).

The case is before the court on plaintiffs' motion for a preliminary injunction prohibiting defendants from initiating criminal process against plaintiffs for violation of state gambling laws.

I conclude that the state lacks authority to prosecute violations of the state's gambling laws on plaintiffs' reservations, either pursuant to the provisions of Pub.L. 280 incorporated in 18 U.S.C. § 1162, or pursuant to the Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et seq. and 18 U.S.C. § 1166. Unless and until the state negotiates a tribal-state compact in which plaintiffs consent to the exercise of such jurisdiction, the United States has the exclusive authority to enforce violations of state gambling laws on plaintiffs' reservations. However, I decline to grant the injunction sought by plaintiffs to enjoin defendants from prosecuting any future violations of the state gambling laws on the reservations. Plaintiffs can avoid any harm they might incur from being subjected to prosecution by a sovereign that lacks jurisdiction simply by refraining from engaging in criminal acts. They do not need an injunction.

For the purpose only of deciding this motion, I find that there is no dispute about the following findings of fact proposed by plaintiffs and uncontroverted by defendants.

FACTS

I. LAC DU FLAMBEAU BAND

The Lac du Flambeau Band of Lake Superior Chippewa Indians is an Indian tribe acknowledged by the United States in the treaty with the Chippewa of September 30, 1854, 10 Stat. 1109. The band occupies a reservation located primarily in Vilas County, Wisconsin.

The band has an approved tribal membership roll of 2,310 members. Most reservation residents live in households with income below the poverty level. Of the onreservation member population at Flambeau, 63% are unemployed. Of those employed, 23% have incomes below $7,000 a year.

The band exercises governmental authority over its reservation and its members through its Tribal Council. The band makes continuous efforts to provide employment opportunities for its members.

Pursuant to the powers set forth in the band's constitution, in January 1988, the Tribal Council adopted a comprehensive Gaming Ordinance that regulates the various forms of gaming conducted on the reservation.

On May 17, 1989, the band opened a gaming facility on federal trust lands within the reservation. The band owns and operates the casino itself. It does not contract with an outside management company.

Between May 17, 1989 and mid-February 1990 the casino employed approximately 24 to 29 persons. In May 1989 83% of the employees were tribal members; in February 1990 just under 80% of those employed were tribal members.

In the absence of the casino jobs, it is likely that the tribal member employees will not find replacement jobs, will be unemployed, and will be forced to rely on some form of public assistance relief from the state or federal government and from tribal social services programs.

The Lac du Flambeau Band supplies many essential governmental services such as housing, water, sewer and related sanitation services, education, medical, dental, psychological, counselling and sanitarium services. Its total annual operating expenditures for the provision of services and the operation of tribal government are approximately $4 million annually. Although it receives funds to operate its governmental programs and services from a variety of sources including the federal government, its ability to provide a full range of services to its members is limited by restrictions on the use of the funds.

The band has only a few, very limited taxing opportunities within the reservation. Consequently, it tries to raise unrestricted funds to fill the unmet needs of its members through the leasing of tribal land, cigarette sales and licenses of various kinds, and the casino operation. Without casino revenue, the band will not be able to support tribal programs and services. Casino revenues are projected to produce over 15.79% of the General Fund revenues available for tribal expenditure in FY 1990. In fact, however, actual casino revenues have exceeded projections, and have accounted for a larger share of the General Fund revenues than originally anticipated.

Between May 17, 1989 and mid-February 1990, the following games have been played at the tribal casino: bingo-jack, bingo-letter, video machines, pull-tabs, quick bingo (20-20), poker and blackjack.

II. SOKAOGON CHIPPEWA COMMUNITY

The Sokaogon Chippewa Community is one of the original Lake Superior Chippewa Bands recognized in treaty. For many decades it was a so-called "lost tribe," subsisting in the ceded territory without benefit of a permanent home or the assistance of federal trusteeship. In the 1930s, the community received a small parcel of 1860 acres of land in Forest County, Wisconsin, which is its reservation home. Approximately 430 tribal members of a total membership of about 1,350 live on the Sokaogon Reservation. The reservation has almost no natural resources capable of producing income and it has no viable tax base. The tribe's unemployment rates exceed 85%.

Since at least 1987, the tribe has operated approximately 15 video poker facsimile games. In the latter part of 1989 these machines were supplemented by four blackjack tables and some slot machines.

The Sokaogon gaming enterprise is managed and operated exclusively by tribal personnel. Until it was threatened with prosecution, it employed at least ten persons full-time (six men and four women) as well as part-time workers, and had a payroll of at least $10,000 per month. During the period of its operation, the enterprise generated net profits of over $15,000 a month in addition to its tribal payroll. The 12-month projection is that the enterprise will generate gross revenues of over $290,000 a year and support a tribal payroll of over $110,000 a year. The projected net profit in excess of $175,000 would provide the tribe with its major source of discretionary funds.

The Sokaogon Chippewa Community is the local government with direct and immediate responsibility for the welfare of its reservation residents. Its assets are slim. It is assisted by numerous programs funded by federal and state governments. However, all such funding must be strictly administered according to program plan. There is no allowance for emergency or the recognition of need extending beyond program coverage.

The gaming revenues afford the major source of funds that enable the Tribal Council to carry out its responsibility to minister to the needs of its residents.

The Sokaogon Community operated its gaming enterprise openly and with the full endorsement of local law enforcement officials until defendant Marvin threatened the enterprise with prosecution and seizure.

Continued closure of the enterprise for an extended period will relegate at least ten employees to unemployment and the relief rolls, and deprive the tribe of badly needed funding for essential programs. Closure of the enterprise for an extended period will also destroy the patronage and business relationships that have been built up over a period of years, and will dissipate the training, confidence and business experience tribal members have acquired.

OPINION

I. INDIAN GAMING REGULATORY ACT

The background to this litigation is the 1988 Indian Gaming Regulatory Act, which establishes a comprehensive scheme for the regulation of gaming on Indian lands. The Act is a response to congressional concerns over the increasing reliance by Indian tribes on revenues from gaming activities conducted on Indian lands and the lack of clear standards or regulations for the conduct of such activities.

Under the Gaming Act, gaming is divided into three categories. Class I gaming includes social and traditional forms of Indian games played by individuals at pow wows and tribal ceremonies for minimal prizes. 25 U.S.C. § 2703(6). Class I games are subject to exclusive tribal jurisdiction and regulation. 25 U.S.C. § 2710(a)(1).

Class II gaming includes bingo, pull-tabs, lotto, tip-jars, punch boards, instant bingo, and other games similar to bingo. 25 U.S.C. § 2703(7)(A)(i). Class II gaming is subject generally to the jurisdiction of a newly created National Indian Gaming Commission, 25 U.S.C. § 2704(a) and (b)(1) and § 2710(b)(1) through (c). In certain circumstances, tribes may regulate their own Class II gaming if they are licensed by the Commission. 25 U.S.C. § 2710(c)(3) and (4).

Class III games are all forms of gaming that are neither class I nor Class II. 25 U.S.C. § 2703(8). Class III games are lawful on Indian lands if the activities are authorized by a tribal ordinance or resolution that has been approved by the Chairman of the National Indian Gaming Commission...