New Mexico v. Dep't of the Interior

• Decision Date: 11 September 2014
• Docket Number: No. 1:14–cv–00695–JAP/SCY.,1:14–cv–00695–JAP/SCY.
• Citation: 126 F.Supp.3d 1201
• Parties: State of NEW MEXICO, Plaintiff, v. DEPARTMENT OF THE INTERIOR and Sally Jewell, in her official capacity as Secretary of the Interior, Defendants.
• Court: U.S. District Court — District of New Mexico

126 F.Supp.3d 1201

State of NEW MEXICO, Plaintiff,

v.DEPARTMENT OF THE INTERIOR and Sally Jewell, in her official capacity as Secretary of the Interior, Defendants.

No. 1:14–cv–00695–JAP/SCY.

United States District Court, D. New Mexico.

Filed Sept. 11, 2014.

Eric D. Miller, Perkins Coie LLP, Seattle, WA, Jennifer MacLean, Perkins Coie LLP, Washington, DC, Jeremiah L. Ritchie, Jessica M. Hernandez, Office of the Governor, Santa Fe, NM, for Plaintiff.

Erin Langenwalter, United States Attorneys Office, Albuquerque, NM, Steven Miskinis, Yosef M. Negose, Us Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION AND ORDER

JAMES A. PARKER, Senior District Judge.

On August 27, 2014, Plaintiff the State of New Mexico filed an EMERGENCY MOTION FOR PRELIMINARY INJUNCTION BY STATE OF NEW MEXICO (Doc. No. 12) ("Motion for Injunction") barring Defendant United States Department of Interior and Sally Jewell, Secretary of the Interior ("Defendants") from initiating the remedial process found in 25 C.F.R. §§ 291.1 –15 (1999) ("Secretarial Procedures").

BACKGROUND

In California v. Cabazon Band of Mission Indians, 480 U.S. 202, 221, 107 S.Ct. 1083, 94 L.Ed.2d 244 (1987), the U.S. Supreme Court held that absent some explicit congressional authorization, States' interests in regulating gambling within their borders were outweighed by "the compelling federal and tribal interests supporting" on-reservation gaming. In response to Cabazon, Congress enacted the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. § 2701 et seq., which had the effect of giving state governments "a subordinate but significant role in regulating tribal gaming." Texas v. United States, 497 F.3d 491, 494 (5th Cir.2007).

IGRA divides gaming activities into three classes: Class I, Class II, and Class III. Class I gaming—"social games solely for prizes of minimal value or traditional forms of Indian gaming engaged in by individuals as a part of, or in connection with, tribal ceremonies or celebrations," 25 U.S.C. 2703(6) —is subject to exclusive tribal jurisdiction. 25 U.S.C. § 2710(a)(1). Class II gaming-bingo and non-banked card games, 25 U.S.C. § 2703(7) —are subject to regulation by the National Indian Gaming Commission. 25 U.S.C. §§ 2706(b), 2710(a) –(c). Class III gaming is a catchall that includes all non-Class I & II game types. 25 U.S.C. § 2703(8). If a tribe wishes to conduct on-reservation Class III gaming activities, IGRA requires the tribe to negotiate a gaming compact with the State. 25 U.S.C. § 2710(d)(1)(C).

In exchange for a seat at the negotiating table, IGRA requires States to negotiate Class III gaming compacts in good faith. 25 U.S.C. § 2710(d)(3). IGRA also restricts States' ability to negotiate provisions in the Class III gaming compact to discrete areas relating to the regulation of Class III gaming activities. 25 U.S.C. § 2710(d)(3)(C). IGRA strictly forbids States from taxing Class III gaming activities conducted by a tribe except as necessary to "defray the costs of regulating" Class III gaming activity. 25 U.S.C. § 2710(d)(4).

IGRA allows a tribe to bring suit against a State for failure to conduct compact negotiations in good faith. 25 U.S.C. § 2710(d)(7). Tribes may bring a suit one hundred eighty days after the tribe requests negotiations with the State. 25 U.S.C. § 2710(d)(7)(B). If the court finds the State acted in bad faith, it may order the State and the tribe to execute a compact within sixty days. 25 U.S.C. § 2710(d)(7)(B)(iii). If the parties fail to reach an agreement, the court may then order the parties to enter mediation. 25 U.S.C. § 2710(d)(7)(B)(iv). Under the mediation process, the State and the tribe each submit their most recent "last best offer" for a compact to the mediator. Id. The mediator then selects whichever proposal most comports with IGRA, the court's order and findings, and other applicable federal law and submits it to the parties.Id.

After all this, the State has one last opportunity to either accept or reject the mediator's proposal. 25 U.S.C. § 2710(d)(7)(B)(v)–(vii). If the State refuses the proposal, IGRA allows the Secretary of the Interior to create procedures that mimic the mediator's proposed compact and comply with federal law and generally-applicable state laws regulating Class III gambling. 25 U.S.C. § 2710(d)(7)(B)(vii). Once the Secretary adopts procedures, the tribe may conduct Class III gaming on its reservation without the State's assent. 25 U.S.C. § 2710(d)(7)(B)(vii)(II).

In sum,

[i]n IGRA, Congress meticulously detailed two separate tracks leading to the institution of a Class III tribal gaming business. On the first track, the tribe and the state may negotiate a voluntary compact governing the conduct of gaming activities, which takes effect essentially upon approval by the Secretary. [citation omitted].

The second track begins when no compact has been reached ... [in which case the tribe may then ask a court to] order negotiation, then mediation ... [then Secretarial Procedures]."

Texas v. United States, 497 F.3d 491, 494 (5th Cir.2007).

IGRA's complex remedial scheme was thrown into disarray by Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). In Seminole Tribe, the U.S. Supreme Court held that Congress had no authority under the U.S. Constitution to subject States to suits filed by Indian tribes seeking a declaration of bad faith failure to negotiate a Class III gaming compact. Id. at 47, 116 S.Ct. 1114. Seminole Tribe created "a major loophole through which States could shield themselves from IGRA's conflict resolution process by asserting sovereign immunity[.]" Defendants' Response, Doc. No. 19 at 7.

To preserve IGRA's remedial scheme and mitigate the trump card that Seminole Tribe gave States, Defendants created regulations allowing a tribe to obtain Class III gaming procedures similar to those described in 25 U.S.C. § 2710(d)(7)(B)(vii)(II). The regulations provide that when, as here, "[a] State and an Indian tribe are unable to voluntarily agree to a compact" and "[t]he State has asserted its immunity from suit brought by an Indian tribe under 25 U.S.C. 2710(d)(7)(B)," 25 C.F.R. § 291.1 (1999), then an Indian tribe may use the Secretarial Procedures to obtain permission to operate Class III gaming without the State's consent. See August 22, 2014 Letter from Kevin K. Washburn, Asst. Sec'y—Indian Affairs, to New Mexico Governor Susana Martinez, Doc. No. 13–1; see also Doc. No. 19 at 8–9 (explaining the history of the Secretarial procedures).

PROCEDURAL HISTORY

In December 2013, the Pueblo of Pojoaque filed a complaint against the State of New Mexico for failing to conduct negotiations in good faith to achieve a renewed gaming compact, as required by 25 U.S.C. § 2710(d)(3)(A). See COMPLAINT [FAILURE TO CONCLUDE COMPACT NEGOTIATIONS IN GOOD FAITH], Doc. No. 1, Case No. 1:13–cv–01186–JAP–KBM (Dec. 13, 2013).

After New Mexico did not respond to the Pueblo's complaint, this Court entered a default judgment. New Mexico then sought and obtained relief from the default judgment and requested dismissal of the Pueblo's claims based on its immunity from suit under U.S. CONST. amend. XI. See ORDER DISMISSING CASE, Doc. No. 22, Case No. 1:13–cv–01186–JAP–KBM (Mar. 3, 2014). After its bad faith claim was dismissed and subsequent negotiations failed to produce a gaming compact, the Pueblo asked the Department of the Interior ("Department") to initiate Secretarial Procedures for issuing the Pueblo Department approval to operate Class III gaming.

In a letter dated August 22, 2014, the Department notified the Pueblo and New Mexico that the Pueblo was eligible for Secretarial Procedures. Doc. No. 13–1. New Mexico represents that Defendants are unwilling to delay initiation of the Secretarial Procedures beyond September 16, 2014.¹ Doc No. 13 at 10. New Mexico then filed a Motion for Injunction (Doc. No. 12).

DISCUSSION

A. JURISDICTION

In its Complaint for Declaratory and Injunctive Relief (Doc. No. 1), New Mexico argues that this Court has subject matter jurisdiction under 28 U.S.C. § 1331 (federal question) and the Administrative Procedure Act, 5 U.S.C. §§ 702, 706.

The Defendants argue that because the Secretarial Procedures are not yet final agency actions, New Mexico's claims fall outside the United States' limited waiver of sovereign immunity in the Administrative Procedure Act. See Doc. No. 19 at 13. The Defendants also argue that because New Mexico does not have standing and its claims are not ripe, this Court likewise does not have jurisdiction under U.S. Const. Art. III. See Doc. No. 19 at 18.

For the reasons that follow, this Court finds that the challenged agency action is final, New Mexico has standing, and its claims are ripe for review. Therefore, this Court has subject-matter jurisdiction under the Administrative Procedure Act and has Article III jurisdiction over New Mexico's claims.

The Defendants further argue that to the extent New Mexico seeks to make a facial challenge to the Secretarial Procedures, such a challenge is barred by the six-year statute of limitations on APA challenges, which began to run when the Department published the Secretarial Procedures in the Federal Register in 1999. See 28 U.S.C. § 2401(a). Because New Mexico explicitly disclaims any facial challenge to the regulations in its Reply (Doc. No. 24), this Court need not rule on the Defendants' argument.

B. LEGAL STANDARD

A party seeking a preliminary injunction must demonstrate the following:

(1) It is likely to succeed on the merits;

(2) It will suffer irreparable harm in the absence of a preliminary injunction;

(3) The balance of equities tips in the party's favor; and

(4) The injunction would serve the public interest.

Little v. Jones, 607 F.3d 1245, 1251 (10th Cir.2010). The parties disagree about the weight this Court should give each factor. New Mexico contends that if it makes "a strong showing on some of the factors," it has a "reduced burden on the other factors." Doc. No....