Stand Up for Cal.! v. State

• Decision Date: 12 December 2016
• Docket Number: F069302
• Citation: 211 Cal.Rptr.3d 490,6 Cal.App.5th 686
• Court: California Court of Appeals 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.

6 Cal.App.5th 686

211 Cal.Rptr.3d 490

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 December 12, 2016

Snell & Wilmer, Sean M. Sherlock, Todd E. Lundell, Costa Mesa, and Brian A. Daluiso for Plaintiffs and Appellants.

Kamala D. Harris, Attorney General, Sara J. Drake, Assistant Attorney General, 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 & Dorr, Danielle Spinelli and Christopher E. Babbitt for Intervener and Respondent.

OPINION

Smith, J.Plaintiffs Stand Up for California! and Barbara Leach (plaintiffs) initiated this litigation by filing a complaint challenging the Governor's authority to concur in the decision of the Secretary of the United States Department of the Interior to take land in Madera County into trust for defendant North Fork Rancheria of Mono Indians (North Fork) for the purpose of operating a casino for class III gaming. The Governor's concurrence was a necessary element under federal law for the granting of permission to North Fork to operate the casino on the land. While the case was pending, the Legislature passed a statute ratifying a compact previously negotiated and executed with North Fork by the Governor. This compact is a device authorized by federal law to allow a state to agree with an Indian tribe on the terms and conditions under which gambling can take place on Indian land within the state. Plaintiffs then initiated Proposition 48, a referendum by which, at the 2014 general election, the voters disapproved the ratification statute. North Fork, having intervened, filed a cross-complaint alleging that the ratification statute was not subject to the referendum process.

North Fork and the state defendants—the Governor, the Attorney General, the California Gambling Control Commission, the Bureau of Gambling Control, and the State of California—demurred to plaintiffs' complaint challenging the Governor's concurrence authority. Plaintiffs and the state defendants demurred to North Fork's cross-complaint challenging the referendum.

The trial court sustained all the demurrers without leave to amend. The complaint and cross-complaint were dismissed. The result was that the land remained in trust for North Fork, but the compact was not ratified, so class III gaming on the land was not approved. Subsequently, however, as a product of federal litigation between North Fork and the state, a set of procedures designed to function as an alternative to a state-approved compact was approved by the Secretary of the Interior.

Appeals were filed from both judgments of dismissal, but the parties agreed to dismiss North Fork's appeal in the case challenging the referendum, leaving only the concurrence issue. In my view, for reasons related to the lack of a state-approved compact or any future prospect of a state-approved compact for gambling on the land, any authority the Governor might have had to concur in a decision of the Secretary of the Interior to take the land into trust for purposes of gaming was inapplicable in this case, so the demurrers to plaintiffs' claims on that issue should have been overruled.

FACTS AND PROCEDURAL HISTORY¹

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 applied to the United States Department of the Interior (DOI) pursuant to the federal Indian Gaming Regulatory Act (18 U.S.C. §§ 1166 -1167 ; 25 U.S.C. § 2701 et seq. ) (IGRA) to have the federal government take into trust for North Fork's benefit a 305-acre parcel in Madera County about 40 miles from the rancheria. The parcel, owned by North Fork's development partner, is located on State Route 99 adjacent to the City of Madera. North Fork proposed building a hotel and casino on the site. Federal action taking the land into trust was a precondition to legal class III gaming under federal law. (25 U.S.C. § 2719(b)(1).) Class III gaming is the type of gambling practiced in casinos in Nevada. (25 U.S.C. § 2703(6) -(8).)

In September 2011, DOI made a finding that, within the meaning of IGRA, 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).) The Governor, fulfilling a role delineated in IGRA, concurred in this determination in August 2012. (25 U.S.C. § 2719(b)(1)(A).) The Secretary of the Interior decided to take the land into trust in November 2012, and the conveyance was completed on February 5, 2013.

Concurrently with this process, the Governor pursued 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).) In August 2012, the Governor announced that he had negotiated and signed a compact with North Fork for gaming on the 305-acre parcel and was forwarding the compact to the Legislature for ratification.

Plaintiffs filed their complaint on March 27, 2013. 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. It alleged that the Governor's concurrence in the Secretary of the Interior's determination violated the California Constitution because such a concurrence was not within the Governor's power. The complaint prayed for a writ of mandate setting aside the concurrence.

A statute ratifying the compact, designated Assembly Bill No. 277, was passed by both houses of the Legislature. The Governor signed it on July 3, 2013, and it became chapter 51 of the Statutes of 2013. In addition to ratifying the compact, the statute exempted the casino project from compliance with the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq. ) (CEQA). (Stats. 2013, ch. 51, § 1(b).) The compact contained provisions, however, that required North Fork to produce a tribal environmental impact report similar to a CEQA environmental impact report. The compact was forwarded to the Secretary of the Interior, who published a notice in the Federal Register on October 22, 2013, stating that the compact was approved and was taking effect to the extent it was consistent with IGRA. (78 Fed.Reg. 62649 (Oct. 22, 2013).)

In the compact, the state authorized North Fork to conduct class III gaming on the 305-acre parcel, and North Fork agreed not to conduct gaming on its environmentally sensitive rancheria or elsewhere in California. North Fork agreed to make payments to the Chukchansi Tribe to mitigate the economic impact of the new casino on the existing Chukchansi casino. North Fork also 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. North Fork further agreed to participate in a revenue-sharing scheme to benefit other tribes without casinos. The compact included many additional terms, including North Fork's submission to detailed regulations for the operation of its casino.

On July 8, 2013, Cheryl Schmit, using the letterhead of Stand Up for California!, asked the Attorney General for a title and summary for a proposed statewide referendum rejecting the compact ratification statute, chapter 51 of the Statutes of 2013. The Attorney General issued the title and summary, and signatures were gathered.

The referendum qualified for the November 2014 general election ballot.

North Fork, which was not originally a party to the litigation initiated by plaintiffs' complaint, was granted leave to intervene on August 23, 2013. North Fork filed its cross-complaint on February 27, 2014, naming the state defendants as cross-defendants. Schmit, the official proponent of the referendum petition, was named as a real party in interest. The cross-complaint sought a declaratory judgment stating that the referendum petition was invalid.

North Fork and the state defendants demurred to plaintiffs' complaint (alleging that the Governor's concurrence was unauthorized), and the trial court ruled on the demurrers on March 3, 2014. In its written ruling, the court stated that the Governor's power to concur arose by implication from his authority to negotiate and execute tribal-state compacts, as set forth in article IV, section 19, subdivision (f), of the California Constitution. Because the Governor was authorized to negotiate compacts for gaming on Indian land, and some such compacts, including the one at issue in this case, cannot come into effect unless the land in question is taken into trust by the federal government with the Governor's concurrence, the Governor must have the power to concur. The court rejected plaintiffs' argument that when the voters added article IV, section 19, subdivision (f), to the California Constitution via Proposition 1A in 2000, they intended to deny to the state the authority to approve Indian casinos on land that was not yet Indian land at the time, so that there could be no casinos on newly added trust land. Plaintiffs conceded they could not cure their complaint by amendment, so the demurrers were sustained without leave to amend. A defense judgment was entered on March 12, 2014.

Plaintiffs, Schmit, and the state defendants demurred to North Fork's cross-complaint (challenging the validity of the referendum), and the trial court ruled on the demurrers on June 26, 2014. The court wrote that the plain language of article II, section 9, subdivision (a), of...