Stand Up for Cal. v. State

• Citation: 64 Cal.App.5th 197,278 Cal.Rptr.3d 627
• Decision Date: 13 May 2021
• Docket Number: F069302
• Court: California Court of Appeals
• Parties: STAND UP FOR CALIFORNIA! et al., Plaintiffs and Appellants, v. STATE of California et al., Defendants and Respondents; North Fork Rancheria of Mono Indians, Intervener and Respondent.

64 Cal.App.5th 197

278 Cal.Rptr.3d 627

STAND UP FOR CALIFORNIA! et al., Plaintiffs and Appellants,

v.STATE of California et al., Defendants and Respondents;

North Fork Rancheria of Mono Indians, Intervener and Respondent.

F069302

Court of Appeal, Fifth District, California.

Filed May 13, 2021

Snell & Wilmer, Sean M. Sherlock, Todd E. Lundell, Costa Mesa, and Jing Hua, for Plaintiffs and Appellants.

Xavier Becerra, Attorney General, Sara J. Drake, William P. Torngren, and Timothy M. Muscat, Deputy Attorneys General, for Defendants and Respondents.

Maier Pfeffer Kim Geary & Cohen, John A. Maier; Wilmer Cutler Pickering Hale and Dorr, Danielle Spinelli and Christopher E. Babbitt, for Intervener and Respondent.

SMITH, J.

Plaintiffs Stand Up for California! and Barbara Leach (plaintiffs) brought this lawsuit to challenge the Governor's authority to concur in the decision of the United States Secretary of the Interior (Interior Secretary) to take 305 acres of land in Madera County into trust for North Fork Rancheria of Mono Indians (North Fork) for the purpose of operating a casino. The trial court sustained demurrers by North Fork and the state defendants—the State of California, the Governor, the Attorney General, the California Gambling Control Commission, and the Bureau of Gambling Control. In 2016, we reversed the judgment of dismissal, concluding the Governor lacked the authority to concur in the Interior Secretary's determination to take the Madera site into trust. ( Stand Up for California! v. State of California (2016) 6 Cal.App.5th 686, 705, 211 Cal.Rptr.3d 490.) The California Supreme Court granted review and held this case pending its decision in United Auburn Indian Community of Auburn Rancheria v. Newsom (2020) 10 Cal.5th 538, 268 Cal.Rptr.3d 690, 472 P.3d 1064 ( United Auburn ).

After deciding California law empowers the Governor to concur, the Supreme Court transferred this case back to us with directions to vacate our decision and reconsider the matter in light of United Auburn . We conclude the facts of this case are distinguishable from those in United Auburn because at the November 2014 general election California voters rejected the Legislature's ratification of the tribal-state compact for gaming at the Madera site. As described below, we conclude the people retained the power to annul a concurrence by the Governor and the voters exercised this retained power at the 2014 election by impliedly revoking the concurrence for the Madera site. As a result, the concurrence is no longer valid, and the demurrer should have been overruled.

We therefore reverse the judgment of dismissal.

FACTS AND PROCEDURAL HISTORY

Federal Statutes

The history of federal and state regulation of gaming on Indian lands is set forth in United Auburn and need not be repeated in detail here. (See United Auburn, supra , 10 Cal.5th at pp. 544-547, 268 Cal.Rptr.3d 690, 472 P.3d 1064.) Two federal statutes relevant to this litigation are the Indian Reorganization Act of 1934 (IRA; 25 U.S.C. § 5101 et seq. ) and the Indian Gaming Regulatory Act (IGRA; 18 U.S.C. §§ 1166 - 1167 ; 25 U.S.C. § 2701 et seq. ). IRA authorizes the Interior Secretary to acquire land and hold it in trust to provide land for Indians. ( Carcieri v. Salazar (2009) 555 U.S. 379, 381-382, 129 S.Ct. 1058, 172 L.Ed.2d 791 ; 25 U.S.C. § 5108.) IGRA provides "a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments." ( 25 U.S.C. § 2702(1).) Class III gaming—the type of gambling practiced in casinos in Nevada ( 25 U.S.C. § 2703(6) - (8) )—is lawful on Indian lands when certain statutory conditions have been met. (See 25 U.S.C. § 2710(d).) Additional conditions apply when, like the 305 acres in Madera County, the land was taken into trust after October 17, 1988. (See 25 U.S.C. § 2719 ; 25 C.F.R. § 292 (2008) ["Gaming on Trust Lands Acquired After October 17, 1988"].) One of those conditions—the Governor's concurrence—is the subject of this litigation.

The statutory text imposing this condition provides that land taken into trust after October 17, 1988, may be used for gaming if "the [Interior] Secretary, after consultation with the Indian tribe and appropriate State and local officials, including officials of other nearby Indian tribes, determines that a gaming establishment on newly acquired lands would be in the best interest of the Indian tribe and its members, and would not be detrimental to the surrounding community, but only if the Governor of the State in which the gaming activity is to be conducted concurs in the [Interior] Secretary's determination. " ( 25 U.S.C. § 2719(b)(1)(A), italics added.) For purposes of this opinion, we refer to the Interior Secretary's determination under this IGRA provision as the two-part determination. IGRA does not grant the Governor the authority to concur—that authority must come from state law. ( United Auburn, supra , 10 Cal.5th at pp. 548-549, fn. 4, 268 Cal.Rptr.3d 690, 472 P.3d 1064.)

North Fork's Proposed Casino

North Fork is a federally recognized Indian tribe with about 1,900 tribal citizens. It possesses a small rancheria in the Sierra Nevada foothills near the unincorporated community of North Fork. In March 2005, North Fork submitted a formal fee-to-trust application to the Bureau of Indian Affairs, requesting the United States Department of the Interior (DOI) take into trust for North Fork's benefit a 305-acre parcel in Madera County. The parcel is located on State Route 99 adjacent to the City of Madera, about 40 miles west of the rancheria. North Fork proposes building a hotel and casino with class III gaming on the site.

At the time of the fee-to-trust application, the parcel was owned by a subsidiary of North Fork's development partner. That entity, Nevada-based Station Casinos, LLC, is partially owned by Red Rock Resorts, Inc., a publicly traded company. Plaintiffs alleged North Fork and Station Casinos signed a casino management contract that gives Station Casinos the right to operate the casino and receive 24 percent of its net income.

In September 2011, the Interior Secretary made a two-part determination on North Fork's proposed casino, finding that taking the land into trust for the purpose of gaming would be in the best interest of North Fork and would not be detrimental to the surrounding community. ( 25 U.S.C. § 2719(b)(1)(A).) By letter dated August 30, 2012, the Governor concurred in the Interior Secretary's two-part determination. The Governor's letter expressed a reluctance to allow the expansion of gaming on land currently ineligible for it, but concurred "in this case because of several exceptional circumstances." The Governor's concurrence fulfilled a condition set forth in IGRA. ( 25 U.S.C. § 2719(b)(1)(A).)

In November 2012, the Interior Secretary, having made his two-part determination and obtained the Governor's concurrence, issued a decision approving North Fork's fee-to-trust application for the 305-acre parcel. This decision was implemented in February 2013, when a grant deed conveying the 305 acres to the federal government in trust was executed by North Fork's development partner, accepted by the Interior Secretary, and recorded in the County of Madera.¹

While the Governor was evaluating whether to concur in the Interior Secretary's two-part determination, he and North Fork negotiated a tribal-state compact under Government Code section 12012.25 and article IV, section 19, subdivision (f), of the California Constitution. Under IGRA, a tribal-state compact is one of the methods of legalizing class III gaming on Indian land. ( 25 U.S.C. § 2710(d)(1)(C).) Such compacts address many issues, including the scope of the games, standards for operating the games, regulatory responsibility, allocation of criminal and civil jurisdiction, liquor sales, and taxes on retail and restaurant outlets. ( 25 U.S.C. § 2710(d)(3)(C).)

The tribal-state compact negotiated by the Governor and North Fork authorized North Fork to conduct class III gaming on the 305-acre parcel. In exchange, North Fork agreed not to conduct gaming on its environmentally sensitive rancheria or elsewhere in California; agreed to make payments to the Chukchansi Tribe to mitigate the economic impact of the new casino on the existing Chukchansi casino; agreed to share revenue with the Wiyot Tribe in order to enable that tribe to forgo gaming on its environmentally sensitive land near Humboldt Bay National Wildlife Refuge; agreed to participate in a revenue-sharing scheme to benefit other tribes without casinos; and submitted to detailed regulations for the operation of its casino.

The Governor and North Fork executed the compact on August 31, 2012, the day after the Governor signed his concurrence letter. Under California's Constitution, such compacts are "subject to ratification by the Legislature." ( Cal. Const., art. IV, § 19, subd. (f).) Accordingly, the Governor forwarded the compact to the Legislature for its approval.

This Lawsuit

In March 2013, plaintiffs filed a complaint alleging the Governor violated the California Constitution when he concurred in the Interior Secretary's two-part determination. As amended, the complaint named as defendants the State of California, the Governor, the Attorney General, the Gambling Control Commission, and the Bureau of Gambling Control. The complaint alleged the Governor had no authority to concur and prayed for a writ of mandate setting aside the concurrence.

While the lawsuit was pending, both houses of the Legislature passed Assembly Bill No. 277, which added section 12012.59 to the Government Code. Subdivision (a)(1) of the new section stated: "The tribal-state gaming compact entered into in accordance with the federal Indian Gaming Regulatory Act [citations] between the State of California and the North Fork Rancheria Band of Mono Indians, executed on August 31, 2012, is hereby ratified."...