Seminole Tribe of Fla. v. Florida
| Decision Date | 09 November 2016 |
| Docket Number | CONSOLIDATED CASE NO. 4:15cv516–RH/CAS |
| Citation | 219 F.Supp.3d 1177 |
| Parties | SEMINOLE TRIBE OF FLORIDA, Plaintiff, v. State of FLORIDA, Defendant. |
| Court | U.S. District Court — Northern District of Florida |
Joseph Harry Webster, Hobbs Straus Dean & Walker LLP, Washington, DC, Michael Howard Moody, Barry Richard, Greenberg Traurig PA, Tallahassee, FL, for Plaintiff.
Jason Maine, William Nicholson Spicola, Florida Department of Business and Professional Regulation, Tallahassee, FL, Anne–Leigh Gaylord Moe, Jeffrey Carter Andersen, Bush Ross PA, Tampa, FL, Dennis J. Whittlesey, Patrick Michael Sullivan, Dickinson Wright PLLC, Washington, DC, Robert Worth Stocker, II, Dickinson Wright PLLC, Lansing, MI, for Defendant.
OPINION ON THE MERITS
The Seminole Tribe of Florida operates casinos under a Compact entered into with the State of Florida under the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 –2721 ("IGRA"). The Compact became effective in 2010 and has a 20–year term. The Compact authorizes the Tribe to conduct banked card games—blackjack, for example—only during the first five years. That period has now ended. But there is an exception to the five-year limitation. The limitation does not apply—the Tribe may continue to conduct banked card games for the entire 20–year term—if "the State permits any other person [except another tribe] to conduct such games."
The Tribe and the State have filed lawsuits against one another that have been consolidated. The cases present two central issues: whether the exception to the five-year limitation has been triggered; and whether the State has breached a duty under IGRA to negotiate in good faith for a modification of the Compact.
This order sets out the court's findings of fact and conclusions of law following a bench trial. The order declares that the exception has been triggered—that the Tribe may conduct banked card games for the Compact's 20–year term. The order awards no further relief on the failure-to-negotiate claim.
The Tribe filed the first of these cases against the State in this district, asserting, in count one, that the Tribe has authority to conduct banked card games for the Compact's full 20–year term. The Tribe asserts, in count two, that the State has breached its duty to negotiate with the Tribe in good faith.
The State filed the second of these cases four days later against the Tribe in the Middle District of Florida, asserting that the Tribe is improperly continuing to conduct banked card games. In count one, the State asserts the Tribe's conduct of banked card games violates the Compact, and in count two, the State asserts the Tribe's conduct of the games violates IGRA (because IGRA allows a tribe to conduct gaming of this kind only if authorized by the state where the gaming will occur). The Middle District transferred the State's case here, where it was consolidated with the Tribe's case.
The State asserted Eleventh Amendment and sovereign immunity from the Tribe's count two. In response, the Tribe asserted that the State waived its immunity by filing its own lawsuit. That led the State to announce, at the outset of the trial, that it wished to voluntarily dismiss its count two, rather than suffer a waiver. This order grants the voluntary dismissal, which, in light of the ruling on the merits, makes no difference anyway.
Indian tribes have their own sovereignty. Even so, Congress can adopt laws governing conduct on Indian lands. IGRA is such a law.
IGRA gives a tribe "exclusive jurisdiction" on its Indian lands over some forms of gaming—denominated "class I." 25 U.S.C. § 2710(a). Class I gaming includes social games played for prizes of minimal value or traditional Indian gaming that is part of a tribal ceremony or celebration. Id. § 2703(6). Class I gaming is not at issue here.
IGRA allows a tribe to conduct "class II" gaming on its Indian lands if the state where the lands are located allows anyone else to conduct such gaming. Id. § 2710(b)(1). Bingo is an example of a class II game. Id. § 2703(7)(A)(i). So is a card game such as traditional poker. See id. § 2703(7)(A)(ii). But class II does not include "banking card games, including baccarat, chemin de fer, or blackjack (21)," id. § 2703(7)(B)(i), or "slot machines of any kind," id. § 2703(7)(B)(ii).
Class III includes any form of gaming not included in class I or II. Id. § 2703(8). "Slot machines" and "banking card games"—the kind of gaming at issue in this case—thus are within class III. IGRA allows a tribe to conduct class III gaming on its Indian lands only if the state where the lands are located enters into a compact with the tribe allowing it to conduct such gaming.
Under this framework, a state can prohibit or regulate class III gaming on Indian lands, so long as it similarly prohibits or regulates gaming by others. Seeid. § 2710(d)(1)(B). But a state's authority over gaming on Indian lands is not unlimited. IGRA obligates a state to negotiate with a tribe on this subject in good faith. Id. § 2710(d)(3)(A). And IGRA imposes limits on a state's ability to exact payments from a tribe for allowing gaming. Seeid. § 2710(d)(3)(C). Payments can be made only if supported by a benefit the state confers on the tribe. See, e.g. , Rincon Band of Luiseno Mission Indians of Rincon Reservation v. Schwarzenegger , 602 F.3d 1019, 1033 (9th Cir. 2010) (quoting In re Indian Gaming Related Cases , 331 F.3d 1094 (9th Cir. 2003) ).
Acting under this framework, the State of Florida and the Seminole Tribe of Florida entered into a gaming compact ("the Compact") in 2010. Under the Compact, "the Tribe is authorized to operate Covered Games on its Indian lands, as defined in the Indian Gaming Regulatory Act, in accordance with the provisions of this Compact." State's Ex. 1 ("Compact ") at § IV.A. The Compact defines "Covered Games" to include "Banking or banked card games, including baccarat, chemin de fer, and blackjack (21)," with an exception for two locations.
For this purpose the words "banking" and "banked" are synonyms. There is no difference in the meaning ascribed to these terms in the gaming industry, in relevant legal authorities, or in the Compact. Instead, the Compact uses the terms as alternative references to the same thing, much as one might say the number of eggs in a carton is usually "a dozen or 12." For convenience, this order ordinarily refers only to "banked" games, not "banking or banked" games, except when quoting.
Florida law allows gaming under compacts with Indian tribes and in limited other circumstances. Under Florida Statutes § 849.086, licensed parimutuel facilities may operate cardrooms, but the statute explicitly forbids "banking" card games. Fla. Stat. § 849.086(12)(a).
Because of this statute, the Tribe's authority under the Compact to conduct banked card games afforded the Tribe the right to conduct banked card games without competition from cardrooms. This was perhaps the most important benefit the Tribe obtained under the Compact. The most important benefit to the State was more than a billion dollars. Because IGRA prohibits a state from receiving a share of a tribe's gaming revenue except to defray expenses or in exchange for a benefit conferred on the tribe, the Tribe's billion-dollars-plus payments to the State under the Compact were justified in large part as compensation for the exclusive right to conduct banked card games—exclusive, that is, except for any competition from other tribes or other types of games.
The term of the Compact is 20 years, but there is a five-year limitation for banked card games, subject to two exceptions:
This Compact shall have a term of twenty (20) years (240 months) beginning on the first day of the month following the month in which the Compact becomes effective under Section A of this Part; provided, however, that the authorization for the Tribe to conduct banking or banked card games as defined in Part III, Section F(2) shall terminate on the last day of the sixtieth (60th) month after this Compact becomes effective unless [1] the authorization to conduct such games is renewed by the parties or [2] the State permits any other person, organization or entity , except for any other federally recognized tribe pursuant to Indian Gaming Regulatory Act, provided that the tribe has land in federal trust in the State as of February 1, 2010, to conduct such games.
Compact § XVI.B. (bracketing and emphasis added).
The five-year period ended in 2015. The "authorization to conduct such games" has not been "renewed by the parties," so the first exception to the five-year limitation does not apply. The Tribe has continuing authority to conduct banked card games only if the second exception applies, that is, only if the State has "permit[ted] any other person," not including another Indian tribe, "to conduct such games." For convenience, this order uses "person" to include an "organization or entity." Cf. Fla. Stat. § 1.01(3) (similarly defining "person").
The Tribe says the State has permitted others to conduct two kinds of banked card games: games in which a designated player (rather than a facility or facility employee) acts as the bank; and games played with electronic cards. The State denies that these are banked card games.
The critical issue is the proper construction of "banking or banked card games" as that term is used in the Compact's § XVI.B. The term is sufficiently ambiguous on its face to allow parol evidence, including evidence of the usage in the industry. See, e.g. , Hinote v. Brigman , 44 Fla. 589, 33 So. 303 (Fla. 1902) (); In re Gulf Coast Orthopedic Center, Inc. , 297 B.R. 865, 869 (Bankr. M.D. Fla. 2003) (citing Carr v. Stockton , 84 Fla. 69, 92 So. 814 (Fla. 1922) ); 17A AM. JUR. 2D Contracts § 353 (2016) (collecting cases) ("[W]ords connected with a...
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