Spokane Indian Tribe v. U.S.

• Citation: 972 F.2d 1090
• Decision Date: 12 August 1992
• Docket Number: No. 91-35454,91-35454
• Parties: SPOKANE INDIAN TRIBE, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1090

972 F.2d 1090

SPOKANE INDIAN TRIBE, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

No. 91-35454.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 7, 1992.

Decided Aug. 12, 1992.

Scott D. Crowell, Fife, Washington, and Robert J. Roberts, Dellwo, Roberts & Scanlon, Spokane, Wash., for plaintiff-appellant.

Albert M. Ferlo, Jr., and Peter A. Appel, U.S. Dept. of Justice, Wash., D.C., for defendant-appellee.

Appeal from the United States District Court for the Eastern District of Washington.

Before: ALARCON, RYMER, and T.G. NELSON, Circuit Judges.

ALARCON, Circuit Judge:

The Spokane Tribe of Indians (the Tribe) appeals from a grant of summary judgment in favor of the United States (the Government). The district court determined that Pick Six Lotto (Pick Six) was not a Class II gaming device as defined by the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. § 2701 et seq. We affirm. Pick Six is excluded from the definition of Class II gaming devices because it is an electronic facsimile of a game of chance. Furthermore, the legislative history of the IGRA demonstrates that Congress did not intend to include lotteries when it used the term "lotto" in the definition of Class II gaming devices.

FACTS AND PROCEDURAL HISTORY

The Tribe operates a gaming casino on tribal land in Eastern Washington. In 1989, the Tribe introduced Pick Six gaming devices in the casino. Pick Six is played by placing money into the Pick Six terminal. A video screen at a Pick Six terminal displays one or more electronic tickets. The player selects six numbers ranging from "1" to "45." The computer then selects its own six numbers. If two or more of the numbers selected by the player match those selected by the computer, the player will receive credits to play additional games. A player who matches all six numbers wins a significant number of credits, depending on the level of the jackpot. At the end of the game, the credits accumulated by the player may be converted to cash.

The Pick Six terminals are electronically linked together so that they share a jackpot. A portion of the amount of money that an individual places in the Pick Six game is added to the joint jackpot.

Pursuant to the requirements of the IGRA, the Tribe began negotiations with the State of Washington to enter into a tribal-state compact in late 1989. The negotiations broke down in February of 1990 when the State insisted that Pick Six was included in the games classified as Class III gaming devices.

The dispute was submitted to the United States Attorney's Office for the Eastern District of Washington. On August 22, 1990, the United States Attorney's Office notified the Tribe that Pick Six was not a Class II gaming device and that operation of the devices absent a compact with the State violated the law. Tribal representatives met with the United States Attorney's office in an unsuccessful attempt to resolve the Pick Six issue. The Tribe and the Government ultimately agreed to resolve the issue by an action under the Declaratory Judgment Act. 28 U.S.C. § 2201 et seq. The parties filed cross-motions for summary judgment. The district court declared that Pick 6 was not a Class II gaming device.

I. JURISDICTION

The Government has not challenged our jurisdiction to review this matter. Nevertheless, we must determine whether we have jurisdiction over this action for a declaratory judgment sua sponte. Matter of Pizza of Hawaii, Inc., 761 F.2d 1374, 1377 (9th Cir.1985). Under the Declaratory Judgment Act, a federal court may "declare the rights and other legal relations" of parties to a "case of actual controversy." 28 U.S.C. § 2201. The purpose of the Declaratory Judgment Act is "to relieve potential defendants from the Damoclean threat of impending litigation which a harassing adversary might brandish, while initiating suit at his leisure--or never." Hal Roach Studios, Inc. v. Richard Feiner and Co., 896 F.2d 1542, 1555 (9th Cir.1990) (quoting Societe de Conditionnement v. Hunter Engineering Co., 655 F.2d 938, 943 (9th Cir.1981).

In Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 61 S.Ct. 510, 85 L.Ed. 826 (1941), the Supreme Court ruled that "the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant issuance of a declaratory judgment." Id. at 273, 61 S.Ct. at 512. If the defendant's actions cause the plaintiff to have a "real and reasonable apprehension that he will be subject to liability," the plaintiff has presented a justiciable case or controversy. Hal Roach, 896 F.2d at 1555.

This matter presents a justiciable controversy. In the August 22, 1990 letter from the United States Attorney's Office, the Government informed the Tribe that it had "concluded that the 'Pick 6' lotto is being operated in violation of state and federal law." It also stated that state law provided for "the immediate seizure of the machines without court orders and their confiscation and destruction by order of the court." The Government requested the Tribe to "discontinue operation of 'Pick 6' lotto as soon as is practical and refrain from operating 'Pick 6' lotto or other electronic gambling devices unless and until there is a Tribal-State compact that has been approved by the Secretary of the Interior." Because of the reference to the violation of state and federal law and the power to confiscate and destroy the gaming devices, the Tribe had a reasonable apprehension that it would be subject to litigation and loss of its property if it continued to operate the Pick Six games. As set forth above, the Tribe and the State of Washington disagreed on the question of whether Pick Six was a Class II gaming device. The failure of the parties to conclude a tribal-state compact because they disagreed over the classification of the Pick Six game fully demonstrates that there is an actual controversy. See Oneida Tribe of Indians v. State of Wisconsin, 951 F.2d 757, 760 (7th Cir.1991) (holding that where the negotiations of a tribal-state compact were at an impasse because of a disagreement over the term "lotto," an actual controversy existed for the purposes of the Declaratory Judgment Act).

II. CLASSIFICATION OF PICK SIX UNDER THE IGRA

The Tribe contends that the district court erroneously determined that Pick Six was a Class III gaming device. The Tribe argues that Pick Six is a Class II gaming device and should be exempt from the requirement of a tribal-state compact. We review a grant of summary judgment de novo. Ernzen v. United States, 922 F.2d 1433, 1435 (9th Cir.1991). We also apply de novo review to the interpretation of a statute. United States v. $47,980.00 in Canadian Currency, 804 F.2d 1085, 1089-90 (9th Cir.1986), cert. denied, 481 U.S. 1072, 107 S.Ct. 2469, 95 L.Ed.2d 878 (1987).

Under the IGRA, Class I gaming includes social games of minimal value or traditional forms of Indian gaming. 25 U.S.C. § 2703(6). The IGRA defines Class II gaming, in relevant part, as follows:

(i) the game of chance commonly known as bingo (whether or not electronic, computer, or other technologic aids are used in connection therewith)--

(I) which is played for prizes, including monetary prizes, with cards bearing numbers or other designations,

(II) in which the holder of the card covers such numbers or designations when objects, similarly numbered or designated, are drawn or electronically determined, and

(III) in which the game is won by the first person covering a previously designated arrangement of numbers or designations on such cards including (if played in the same location) pull-tabs, lotto, punch boards, tip jars, instant bingo, and other games similar to bingo ...

25 U.S.C. § 2703(7)(A).

The definition of Class II gaming specifically excludes any "electronic or electromechanical facsimiles of any game of chance or slot machines of any kind." 25 U.S.C. § 2703(7)(B)(ii).

Class III gaming includes all forms of gaming not covered by Class I or Class II gaming. 25 U.S.C. § 2703(8). In order to engage in Class III gaming, the Indian tribe must enter into a compact with the State government in which the Indian reservation is located. 25 U.S.C. § 2710(d)(1)(C).

The Pick Six game operated by the Tribe is not a Class II gaming device because Class II gaming excludes any "electronic or electromechanical facsimiles of any game of chance or slot machines of any kind." 25 U.S.C. § 2703(7)(B)(ii). The Senate Report distinguished this prohibition from the provision allowing "electronic, computer, or other technologic aids" to be used in conjunction with bingo:

The Committee intends that tribes be given the opportunity to take advantage of modern methods of conducting class II games and the language regarding technology is designed to provide maximum flexibility. In this regard, the Committee recognizes that tribes may wish to join with other tribes to coordinate their class II operations and thereby enhance the potential of increasing revenues ... Simultaneous games participation between and among reservations can be made practical by use of computers and telecommunications technology as long as the use of such technology does not change the fundamental characteristics of the bingo or lotto games ... In other words, such technology would merely broaden the potential participation levels and is readily distinguishable from the use of electronic facsimiles in which a single participant plays a game with or against a machine rather than with or against other players.

S.Rep. No. 446, 100th Cong., 2d. Sess. 9 (1988), ...