Shakopee Mdewakanton Sioux Community v. Hope

• Decision Date: 11 August 1992
• Docket Number: No. Civ. 4-92-343,4-92-482.,Civ. 4-92-343
• Citation: 798 F. Supp. 1399
• Parties: SHAKOPEE MDEWAKANTON SIOUX COMMUNITY, a federally recognized Indian Tribe, Little Six, Inc., a corporation chartered by the Shakopee Mdewakanton Sioux Community, Plaintiffs, v. Anthony J. HOPE, in his capacity as Chairman of the National Indian Gaming Commission, Jana McKeag, in her capacity as Commissioner on the National Indian Gaming Commission, National Indian Gaming Commission, a commission established within the United States Department of the Interior, Defendants. The LOWER SIOUX INDIAN COMMUNITY IN MINNESOTA, Plaintiff, v. NATIONAL INDIAN GAMING COMMISSION, William Barr, Attorney General of the United States, Defendants.
• Court: U.S. District Court — District of Minnesota

798 F. Supp. 1399

SHAKOPEE MDEWAKANTON SIOUX COMMUNITY, a federally recognized Indian Tribe, Little Six, Inc., a corporation chartered by the Shakopee Mdewakanton Sioux Community, Plaintiffs, v. Anthony J. HOPE, in his capacity as Chairman of the National Indian Gaming Commission, Jana McKeag, in her capacity as Commissioner on the National Indian Gaming Commission, National Indian Gaming Commission, a commission established within the United States Department of the Interior, Defendants.

The LOWER SIOUX INDIAN COMMUNITY IN MINNESOTA, Plaintiff, v. NATIONAL INDIAN GAMING COMMISSION, William Barr, Attorney General of the United States, Defendants.

Nos. Civ. 4-92-343, 4-92-482.

United States District Court, D. Minnesota, Fourth Division.

July 27, 1992.

As Modified August 11, 1992.

William J. Keppel, James E. Townsend, Steven M. Christenson, Dorsey & Whitney, Minneapolis, Minn., Kurt Van BlueDog, BlueDog Law Office, Bloomington, Minn., for plaintiffs Shakopee Mdwakanton Sioux Community and Little Six, Inc.

John E. Jacobson, Jacobson, Buffalo & Schoessler, Minneapolis, Minn., for plaintiff The Lower Sioux Indian Community in Minnesota.

Thomas B. Heffelfinger, U.S. Atty., and Robert M. Small, Asst. U.S. Atty., Minneapolis, Minn., for defendants.

MEMORANDUM AND ORDER

MacLAUGHLIN, Chief Judge.

These related matters are before the Court on cross-motions for summary judgment. Defendants' motions will be granted; plaintiffs' motions will be denied.

FACTS

Plaintiffs Lower Sioux Indian Community and Shakopee Mdewakanton Sioux Community are federally recognized Indian tribes; plaintiff Little Six, Inc. is a tribally chartered corporation created and wholly owned by the Shakopee Mdewakanton Sioux Community. Plaintiffs challenge regulations promulgated by the National Indian Gaming Commission (the commission) that classify the game of keno as a Class III game that cannot be offered on tribal land absent a tribal-state compact.¹

Under the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. § 2701-2721, gaming on Indian lands is divided into three categories. Class I gaming includes social games or traditional forms of Indian gaming occurring in connection with tribal ceremonies or celebrations. 25 U.S.C. § 2703(6). Tribes have exclusive jurisdiction over Class I gaming. 25 U.S.C. § 2710(a). Class II gaming includes bingo, games similar to bingo, and certain card games. 25 U.S.C. § 2703(7). Class II gaming is regulated by the commission and a tribe need not negotiate a tribal-state compact in order to offer it. 25 U.S.C. § 2710(b). All other gaming is considered class III gaming. 25 U.S.C. § 2703(8). Class III gaming is regulated by the individual states, and tribes who offer it must do so pursuant to a tribal-state compact. 25 U.S.C. § 2710(d).

The IGRA established the commission to regulate Indian gaming, and specifically authorized the commission to promulgate the regulations and guidelines necessary to implement the provisions of the act. 25 U.S.C. §§ 2704, 2706(b)(10). In April 1992, the commission promulgated regulations regarding definitions under the IGRA. 57 Fed.Reg. 12,382 (1992). The regulations categorize keno as a casino game that falls within class III. 25 C.F.R. § 502.4. Plaintiffs maintain that keno is actually a game similar to bingo that falls within class II.

The basic nature of keno, as it is played on Indian lands in Minnesota, is not in dispute. A player selects anywhere from one to twenty numbers from a card that contains eighty sequentially numbered squares; the numbers selected are entered into a computer, and the player keeps a copy of the card. The house then draws twenty numbered balls from a bingo blower, and the numbers are posted on electronic boards so that the player may compare the numbers drawn with the numbers selected on the game card. Players win if the numbers drawn correspond to the numbers they selected. John Scarne, Scarne's New Complete Guide to Gambling 491-92 (Simon and Schuster 1986) (Defs.' Ex. D); Affidavit of Dennis Prescott Ex. 4. The odds of winning, and therefore the amount that may be won, depend upon the number of numbers players seek to match and the number of matches they actually get. For example, players at the Lower Sioux Community's casino, Jackpot Junction, could win three times their bets by selecting and matching one number, but could win 750 times their bets by selecting and matching five numbers or ten times their bets by selecting five numbers and matching four numbers. Prescott Aff. Ex. 4. Because the game is based upon the numbers selected by the individual players, a game of keno could have no winners or multiple winners. At Jackpot Junction, if no person won a prize in a given game, all players won the right to play again for free. Id.

Bingo, too, is based on matching numbers drawn from a bingo blower. In a classic game of bingo, however, players do not select their own numbers as in keno, but purchase cards with numbers printed on them. As numbers are drawn from the blower, players cover the numbers on their cards. The first person to cover the numbers in a designated pattern (often five in a row) calls "bingo" and wins the game. The winnings of the bingo player depend upon the set prize offered for the game, not on bets made by the player. See Supp. Prescott Aff. ¶ 4. There are numerous variations on the classic game of bingo. In "pick your own" bingo, players select their own numbers, as in keno. Prescott Aff. Ex. 1. In "jackpot" or "progressive" bingo, certain prizes continue to accumulate until someone wins a game. 57 Fed.Reg. at 12,382. Some games of bingo end after the first player gets and calls "bingo," while some games of bingo offer prizes to subsequent winners. Prescott Aff. ¶ 4 & Ex. 3.

Plaintiffs assert that the commission's determination that keno is a class III game, rather than a game similar to bingo, was arbitrary and capricious. The parties in both actions have brought cross motions for summary judgment.

DISCUSSION

A movant is not entitled to summary judgment unless the movant can show that no genuine issue exists as to any material fact. Fed.R.Civ.P. 56(c). In considering a summary judgment motion, a court must determine whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The role of a court is not to weigh the evidence but instead to determine whether, as a matter of law, a genuine factual conflict exists. AgriStor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir.1987). "In making this determination, the court is required to view the evidence in the light most favorable to the nonmoving party and to give that party the benefit of all reasonable inferences to be drawn from the facts." AgriStor Leasing, 826 F.2d at 734. When a motion for summary judgment is properly made and supported with affidavits or other evidence as provided in Fed.R.Civ.P. 56(c), then the nonmoving party may not merely rest upon the allegations or denials of the party's pleading, but must set forth specific facts, by affidavits or otherwise, showing that there is a genuine issue for trial. Lomar Wholesale Grocery, Inc. v. Dieter's Gourmet Foods, Inc., 824 F.2d 582, 585 (8th Cir.1987), cert. denied, 484 U.S. 1010, 108 S.Ct. 707, 98 L.Ed.2d 658 (1988). Moreover, summary judgment must be entered against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).

I. Scope of Review

The parties dispute the scope of review applicable to the agency's determination in this case. Defendants argue for a deferential scope of review under which the Court determines whether the agency's construction of the statute is a permissible one. Plaintiffs argue that the Court need not defer to the agency's interpretation of the statute, because the Court is fully competent to determine congressional intent; they also argue that because the IGRA was intended to benefit tribes, any ambiguity in the statute must be resolved in their favor. In addition, the Shakopee Mdewakanton plaintiffs argue that the regulation at issue is an interpretative rule that is not entitled to deference.

The distinction between interpretive rules and legislative rules is rooted in the Administrative Procedure Act (APA), 5 U.S.C. § 551 et seq. The APA exempts from its rulemaking procedures "interpretative rules, general statements of policy, or rules of agency organization, procedure or practice." 5 U.S.C. § 553(b)(A). While an interpretative rule is entitled to only such deference as its "inherent persuasiveness commands," Drake v. Honeywell, Inc., 797 F.2d 603, 607 (8th Cir.1986) (citing Batterton v. Marshall, 648 F.2d 694, 702 (D.C.Cir.1980)), a legislative rule must be upheld unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A).

The line between legislative and interpretative rules is sometimes fuzzy. In general, though, interpretive rules are nonbinding agency statements that clarify or explain existing law or regulations. McKenzie v. Bowen, 787 F.2d 1216, 1222 (8th Cir.1986). They do not foreclose alternative courses of agency action or conclusively affect rights of private parties. Batterton, 648 F.2d at 702. Legislative rules, on the other hand, fill in statutory gaps that an agency is authorized to fill. They create rights, impose obligations, and constrict the discretion of agency officials by determining the issue addressed. In short, they have the force and effect of law. Drake, 797 F.2d at 607; McKenzie, 787 F.2d at 1222; Batterton, 648 F.2d at 701-02.

The Shakopee Mdewakanton plaintiffs...