Sault Ste. Marie Tribe of Chippewa Indians v. Engler

• Citation: 146 F.3d 367
• Decision Date: 05 June 1998
• Docket Number: No. 97-1648,97-1648
• Parties: SAULT STE. MARIE TRIBE OF CHIPPEWA INDIANS; Grand Traverse Band of Ottawa & Chippewa Indians; Keweenaw Bay Indian Community; Hannahville Indian Community; Bay Mills Indian Community, Plaintiffs, Lac Vieux Desert Band Of Lake Superior Chippewa Indians, Plaintiff-Appellant, Saginaw Chippewa Indian Tribe of Michigan, Intervenor, v. John M. ENGLER, Governor, Defendant-Appellee, State of Michigan, Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 367

146 F.3d 367

SAULT STE. MARIE TRIBE OF CHIPPEWA INDIANS; Grand Traverse Band of Ottawa & Chippewa Indians; Keweenaw Bay Indian Community; Hannahville Indian Community; Bay Mills Indian Community, Plaintiffs Lac Vieux Desert Band Of Lake Superior Chippewa Indians Plaintiff-Appellant Saginaw Chippewa Indian Tribe of Michigan, Intervenor, v. John M. ENGLER, Governor, Defendant-Appellee State of Michigan, Defendant.

No. 97-1648.

United States Court of Appeals, Sixth Circuit.

Argued April 21, 1998.

Decided June 5, 1998.

Daniel T. Green, Sault Ste. Marie, MI, for Plaintiff Sault Ste. Marie Tribe of Chippewa Indians.

William Rastetter, Cedar, MI, for Plaintiff Grand Traverse Band of Ottawa & Chippewa Indians.

Joseph P. O'Leary, Baraga, MI, for Plaintiff Keweenaw Bay Indian Community.

Dawn S. Duncan, Wilson, MI, for Plaintiff Hannahville Indian Community.

Anthony E. Andary, Andary & Andary, Sault Ste. Marie, MI, for Plaintiff Bay Mills Indian Community.

Conly J. Schulte (argued and briefed), John M. Peebles (briefed), Monteau, Peebles & Evans, Omaha, NE, for Plaintiff-Appellant Lac Vieux Desert Band of Lake Superior Chippewa Indians.

Michael G. Phelan, Mt. Pleasant, MI, for Intervenor Saginaw Chippewa Indian Tribe of Michigan.

Keith D. Roberts, Assistant Attorney General of Michigan (argued and briefed), Lansing, MI, for Defendant State of Michigan.

Keith D. Roberts, Assistant Attorney General, Frank J. Kelley, Office of Attorney General, Appellate Division, Lansing, MI, for Defendant-Appellee John M. Engler, Governor.

Before: MARTIN, Chief Judge; SUHRHEINRICH and SILER, Circuit Judges.

OPINION

BOYCE F. MARTIN, JR., Chief Judge.

The stakes are often high in gambling, and millions of dollars are riding on the interpretation of a consent judgment in this Indian gaming case. At issue is whether several Michigan Indian tribes are obligated to continue making payments to the State of Michigan under the terms of a consent judgment entered several years ago. According to the consent judgment, the obligation to make payments is contingent upon the Tribes holding the "exclusive right to operate" electronic games of chance in Michigan. Sault Ste. Marie Tribe of Chippewa Indians v. Engler, No. 1:90-CV-611 (W.D.Mich. Aug. 20, 1993). The district court determined that the Tribes still hold the exclusive right to operate electronic games of chance, and in reaching that conclusion it excluded extrinsic evidence regarding the interpretation of the consent judgment. Sault Ste. Marie Tribe of Chippewa Indians v. Engler, No. 1:90-CV-611 (W.D.Mich. March 17, 1997). We agree with the district court's interpretation of the consent judgment and with its decision to exclude extrinsic evidence. We also hold that the district court ruled correctly in denying the Lac Vieux Desert Band of Lake Superior Chippewa Indians' motion to alter or amend the judgment under Fed.R.Civ.P. 59(e). Sault Ste. Marie Tribe of Chippewa Indians v. Engler, No. 1:90-CV-611 (W.D.Mich. May 20, 1997). We therefore affirm the district court's decisions.

I.

This case grew out of a dispute between several Indian tribes and the State of Michigan over the issuance of gaming permits. The Sault Ste. Marie Tribe of Chippewa Indians, Grand Traverse Band of Ottawa and Chippewa Indians, Keweenaw Bay Indian Community, Hannahville Indian Community, Bay Mills Indian Community, and Lac Vieux Desert Band of Lake Superior Chippewa Indians filed suit against the State of Michigan in the United States District Court for the Western District of Michigan on July 10, 1990. The Tribes, which are all federally acknowledged Indian tribes, alleged that the State was not negotiating in good faith to conclude a Tribal/State gaming contract under the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701-2721. On March 26, 1992, the district court dismissed the case after determining that the Eleventh Amendment barred the suit against the State. Sault Ste. Marie Tribe of Chippewa Indians v. Michigan, 800 F.Supp. 1484 (W.D.Mich.1992). The Sixth Circuit found that it did not have jurisdiction over the appeal. Sault Ste. Marie Tribe of Chippewa Indians v. Michigan, 5 F.3d 147 (6th Cir.1993). While the appeal was pending, the Tribes filed an amended complaint on May 5, 1992, naming Michigan Governor John Engler, rather than the State of Michigan, as defendant.

The parties stipulated for the entry of a consent judgment, and the district court entered the judgment on August 20, 1993. Under the consent judgment, the State and the Tribes were directed to enter a gaming compact under which the Tribes would operate electronic games of chance. The consent judgment called for the Tribes to make semi-annual payments to the Michigan Strategic Fund of eight percent of the net win at each casino from electronic games of chance. The Tribes were obligated to continue making the payments "only so long as the tribes collectively enjoy the exclusive right to operate electronic games of chance in Michigan...." The Saginaw Chippewa Indian Tribe of Michigan was also added as a party for the purpose of the consent judgment. The court dismissed the case with prejudice but retained jurisdiction to enforce the consent judgment. The parties operated under the terms of the judgment for about three years.

In the November 5, 1996, general election, the people of Michigan voted on and adopted "Proposal E," the Michigan Gaming Control and Revenue Act. (codified at Mich. Comp. Laws Ann. §§ 432.201-432.216 (West Supp.1998)). The Michigan Gaming Control and Revenue Act became effective on December 5 and was amended by S.B. No. 569, 89th Leg. Reg. Sess. (Mich.1997) (codified as amended at Mich. Comp. Laws Ann. §§ 432.201-432.226 (West Supp.1998)). The Act established the Michigan Gaming Control Board and authorized the Board to grant up to three licenses for casino gaming in Detroit. Mich. Comp. Laws Ann. § 432.204, § 432.206 (West Supp.1998). Under the current law, before the applicant can apply to the Michigan Gaming Control Board, Detroit must pass an ordinance regulating gaming, the applicant must establish a development agreement with the city, and the applicant must have a plan for community investment or involvement. Mich. Comp. Laws Ann. § 432.206(1) (West Supp.1998). When these criteria, among others, are met, the application is forwarded to the Michigan Gaming Control Board. Mich. Comp. Laws Ann. § 432.206(1) (West Supp.1998). Under Michigan law, a casino is "a building in which gaming is conducted," and gaming is defined as operating "any gambling game or gambling operation." Mich. Comp. Laws Ann. § 432.202(g), (x) (West Supp.1998). Therefore, a casino license necessarily includes the right to operate electronic games of chance.

In response to the passage of "Proposal E," several of the Tribes notified the State that they would no longer make their semi-annual payments because their exclusive rights to operate casino games had been terminated. On December 9, 1996, Governor Engler filed a motion to compel compliance with the consent judgment. On March 14, 1997, the district court issued an opinion and order granting in part and denying in part Governor Engler's motion to compel compliance with the consent judgment. On March 28, the Lac Vieux filed a motion under Rule 59(e) to alter or amend judgment. On May 20, the court denied the Lac Vieux's Rule 59(e) motion. The Lac Vieux filed a timely motion of appeal of the March 17 and May 20 orders on June 13. The Lac Vieux tribe is the only tribe involved in the appeal. ¹

II.

A. Meaning of "Exclusive Right to Operate"

At issue in this case is the interpretation of the consent judgment. A district court's interpretation of a consent decree or judgment is a matter of law subject to de novo review, and the underlying findings of fact are reviewed for clear error. Huguley v. General Motors Corp., 67 F.3d 129, 132 (6th Cir.1995). Where as here, though, we are reviewing the interpretation of a consent judgment by the district court that crafted the consent judgment, it is probably more accurate to describe our standard of review as "deferential de novo." It is only sensible to give the court that wrote the consent judgment greater deference when it is parsing its own work. As this Court has noted: "[a]t first blush, giving substantial deference to the district court's interpretation of the [consent] decree appears to be inconsistent with de novo review. Yet, in Brown v. Neeb, 644 F.2d 551, 558 n. 12 (6th Cir.1981), we explained that the district court's reading of the decree was merely an additional tool for contract interpretation." Huguley v. General Motors Corp., 52 F.3d 1364, 1369-70 (6th Cir.1995). As the Court noted in Brown "[f]ew persons are in a better position to understand the meaning of a consent decree than the district judge who oversaw and approved it." 644 F.2d at 558 n. 12. We agree, and we will review the district court's decision accordingly.

Consent decrees and judgments are binding contracts. See id. at 557. The interpretation of a consent decree or judgment is a question of contractual interpretation. Huguley, 67 F.3d at 132. Because this contract was formed in the State of Michigan, it is interpreted under Michigan law. Sawyer v. Arum, 690 F.2d 590, 593 (6th Cir.1982). Under Michigan law, "[t]he primary goal in the construction or interpretation of any contract is to honor the intent of the parties." Rasheed v. Chrysler Corp., 445 Mich. 109, 517 N.W.2d 19, 29 n. 28 (1994). The Court "must look for the intent of the parties in the words used in the instrument." Michigan Chandelier Co. v. Morse, 297 Mich. 41, 297 N.W. 64, 67 (1941).

This dispute centers on the words "exclusive right to operate," and even more directly on the words "exclusive right." What is an exclusive right? The Lac Vieux contend that when "Proposal E" was signed into law the Tribes lost their exclusive right and therefore no longer needed to make payments to ...