Lac Vieux Desert Band of Lake Superior Chippewa Indians v. Michigan Gaming Control Bd.
| Decision Date | 12 April 1999 |
| Docket Number | No. 97-2249,97-2249 |
| Citation | 172 F.3d 397 |
| Parties | LAC VIEUX DESERT BAND OF LAKE SUPERIOR CHIPPEWA INDIANS, Plaintiff-Appellant, v. The MICHIGAN GAMING CONTROL BOARD, et al., Defendants-Appellees, Atwater Entertainment Associates, L.L.C.; Greektown Casino, L.L.C.; State of Michigan; Frank J. Kelley, Attorney General ex rel the People of the State of Michigan, Intervenors-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
John M. Peebles (briefed), Conly J. Schulte (briefed), Monteau, Peebles & Evans, Omaha, Nebraska, G. Michael Fenner (argued and briefed), Creighton University School Of Law, Omaha, Nebraska, for Plaintiff-Appellant.
John M. Cahill (argued and briefed), Assistant Attorney General, Casino Control Division, Lansing, Michigan, for Defendants-Appellees Michigan Gaming Control Board, Thomas Denomme, Michael Stacey, Paula Blanchard.
Morley Witus (briefed), Barris, Sott, Denn & Driker, Detroit, Michigan, for Defendant-Appellee City of Detroit.
John D. Pirich (argued and briefed), John S. Kane, Honigman, Miller, Schwartz & Cohn, Lansing, Michigan, for Intervenor-Appellee Atwater Entertainment Associates, L.L.C.
Bruce R. Greene (briefed), Greene, Meyer & McElroy, Boulder, Colorado, for Intervenor-Appellee Greektown Casino, L.L.C.
Thomas R. Wheeker (briefed), Office of the Attorney General, Tort Defense Division, Lansing, Michigan, for Intervenor-Appellee Frank J. Kelley.
Before: NELSON, SILER, and DAUGHTREY, Circuit Judges.
The Lac Vieux Desert Band of Lake Superior Chippewa Indians brought this action, challenging a Michigan state statute and a Detroit city ordinance that govern the development and regulation of casino gambling in Detroit. The plaintiff asserts that both the statute and the ordinance
award an unconstitutional preference in the development of casino gambling to two particular parties, Atwater Entertainment and Greektown Casino (intervenors in this case). On appeal, Lac Vieux contests the district court's grant of summary judgment to the defendants on three grounds, contending (1) that the district court erred in determining that Lac Vieux lacked standing to bring its First Amendment and equal protection claims; (2) that the district court erred in determining that the First Amendment is not implicated in this case; and (3) that the district court erred in applying rational basis review in determining the merits of the equal protection claim. We conclude that the district court did err in determining that Lac Vieux lacks standing to challenge the Detroit ordinance, in determining that the First Amendment is not implicated in that legislation, and in applying rational basis review in determining the merits of the equal protection claim. The district court was correct, however, in holding that the plaintiff lacks standing to challenge the state statute. We therefore affirm the judgment of the district court in part, reverse it in part, and remand the case to the district court for further proceedings.
The Lac Vieux Desert Band of Lake Superior Chippewa Indians is a federally recognized Indian tribe that operates a casino on its reservation in Gogebic County, Michigan. In 1994, Lac Vieux, in conjunction with several partners, developed a plan to establish a casino in downtown Detroit. At that time, however, off-reservation gambling was not legal in the state of Michigan, and the governor of Michigan declined to approve the project.
Atwater Entertainment and Greektown Casino also proposed to bring gambling to Detroit. In 1994, they secured sufficient signatures to place on the city ballot two ordinance initiatives that, in conjunction, would repeal the prohibition against casino gambling within the city and authorize Atwater Entertainment and Greektown Casino to conduct casino gambling there. They each spent substantial sums of money to promote passage of the initiatives. Detroit voters approved the initiatives in August 1994, but development of casino gambling was still prevented by Michigan state law.
Atwater Entertainment and Greektown Casino subsequently sponsored a state ballot proposal, Proposal E, which provided for an initiated law, the Michigan Gaming Control and Revenue Act, designed to change state law to allow casino gaming in Detroit. Again, they each devoted substantial sums of money to advertise and promote the adoption of Proposal E, which was adopted by the Michigan electorate on November 5, 1996, and was codified as Mich. Comp. Laws §§ 432.201, et seq.
The initiated act authorized the development and operation of casino projects in Michigan cities where:
(1) the city has a population of at least 800,000 at the time a license is issued;
(2) the city is located within 100 miles of any other state or country in which gaming is permitted; and
(3) a majority of the voters of the local unit of government have expressed approval of casino gaming in the city.
Mich. Comp. Laws § 432.202(f). Detroit is the only city that met these criteria. The initiated act also created the defendant Michigan Gaming Control Board and granted this body exclusive authority to authorize state licenses to operate casinos. See Mich. Comp. Laws §§ 432.204(a), 432.205-432.208.
Section 432.206(a)(1) of the initiated act provided an exemption from the competitive bidding process at the city level for any license applicant who "was the initiator of any casino gaming proposal submitted for voter approval in the city in which the casino will be located and the voters approved the proposal." Mich. Comp. No more than three (3) licenses shall be issued by the board in any city. In the event that more than three (3) applicants meet the criteria provided for in Section 6(a) of this Act, licenses shall first be issued to applicants which submitted any casino gaming proposal for voter approval prior to January 1, 1995, in the city in which the casino will be located and the voters approved the proposal.
Laws § 432.206(a)(1). Section 432.206(a)(3) provided that an applicant must have entered into a development agreement with the city in order to be eligible for a casino license. See Mich. Comp. Laws § 432.206(a)(3). Section 432.206(b) limited the number of licenses that the Board could grant and provided for further preferential treatment in the licensing process
Mich. Comp. Laws § 432.206(b). Atwater Entertainment and Greektown Casino were the only entities eligible for both the exemption from competitive bidding and the preference over other applicants.
Lac Vieux initiated this suit against the Board, the City of Detroit, the Mayor, and City Counsel members in February 1997, seeking to have the initiated act declared unconstitutional on the grounds that it impaired an exclusive contractual right; that it violated the takings, equal protection, and due process clauses of the federal and Michigan constitutions; that it violated the state constitution's prohibition against special legislation; and that it constituted an unlawful delegation of legislative authority to the City of Detroit. Atwater Entertainment, Greektown Casino, and the Michigan Attorney General successfully sought to intervene in the case in May 1997.
In the meantime, in order to implement the initiated act, the Detroit City Council adopted an ordinance entitled the Casino Development Competitive Selection Process, which is now codified as Detroit City Code §§ 18-13-1 et seq. This June 1997 ordinance authorizes the Mayor to select three developers to enter into casino development agreements with the city, and it sets forth the criteria by which these developers must be chosen. See Detroit City Code, §§ 18-13-3; 18-13-5. The City Council must review and approve proposed development agreements. See Detroit City Code, § 18-13-8.
The ordinance's Statement of Intent indicates that "[i]n selecting developers of casinos, it is in the best interest of the City to provide a preference to those developers who took the initiative to facilitate the development of casino gaming in the City of Detroit by proposing a casino gaming proposal approved by the voters of the City (City Ordinances 15-94 and 16-94), and who actively promoted and significantly supported the State initiative authorizing gaming." Detroit City Code, § 18-13-1. This preference is laid out even more fully in Section 18-13-6, which provides in part that:
(a) In considering proposals and in selecting a prospective developer with whom the Mayor or his designee will negotiate a development agreement, a prospective developer is entitled to a preference if:
(1) its proposal meets the criteria established by this Chapter and by the request for proposals;
(2) it was the initiator of a casino gaming proposal which was approved by the voters of this City prior to January 1, 1995; and
(3) it made significant contributions to the development of gaming within the City by actively promoting and significantly supporting a state initiative authorizing gaming.
Detroit City Code, § 18-13-6. If a developer meets these criteria, then the developer will receive a "more favorable position" in the competitive bidding process. Detroit City Code, § 18-13-2. Greektown Casino and Atwater Entertainment are the only developers who could qualify for this preference.
On June 23, 1997, the City of Detroit published the Phase I Request for Proposals and Qualifications pursuant to the ordinance. Detailed proposals and a $50,000 Phase I fee were to be submitted by August 1, 1997. Eleven developers, including Atwater Entertainment and Greektown Casino, submitted timely proposals. Lac Vieux declined to submit a proposal. On August 22, 1997, the Mayor invited seven developers to submit Phase II proposals along with the $250,000 Phase II fee. On November 20, 1997, subsequent to the filing of the district court's opinion, the Mayor announced that MGM Grand-Detroit, Greektown Casino, and Detroit...
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