State v. Dep't of the Interior

• Decision Date: 17 October 2014
• Docket Number: No. 1:14–cv–00695–JAP/SCY,1:14–cv–00695–JAP/SCY
• Citation: 269 F.Supp.3d 1145
• Parties: STATE of New Mexico, Plaintiff, v. DEPARTMENT OF the INTERIOR and Sally Jewell, in her official capacity as Secretary of the Interior, Defendants, and Pueblo of Pojoaque, a federally-recognized Indian Tribe, Intervenor Defendant.
• Court: U.S. District Court — District of New Mexico

269 F.Supp.3d 1145

STATE of New Mexico, Plaintiff,

v.DEPARTMENT OF the INTERIOR and Sally Jewell, in her official capacity as Secretary of the Interior, Defendants,andPueblo of Pojoaque, a federally-recognized Indian Tribe, Intervenor Defendant.

No. 1:14–cv–00695–JAP/SCY

United States District Court, D. New Mexico.

Filed October 17, 2014

Eric D. Miller, Perkins Coie LLP, Seattle, WA, Pro Hac Vice, Jennifer MacLean, Perkins Coie LLP, Washington, DC, Pro Hac Vice, Jeremiah L. Ritchie, Office of the Governor, Santa Fe, NM, Jessica M. Hernandez, City of Albuquerque, Albuquerque, NM, for Plaintiff.

Erin Langenwalter, United States Attorneys Office, Albuquerque, NM, Steven Miskinis, Yosef M. Negose, U.S. Department of Justice, Washington, DC, for Defendants.

Carrie A. Frias, Pueblo of Pojoaque Legal Department, Santa Fe, NM, Daniel I.S.J. Rey–Bear, ReyBear McLaughlin, LLP, Spokane, NM, for Intervenor Defendant.

MEMORANDUM OPINION AND ORDER

Plaintiff State of New Mexico challenges the Department of the Interior and the Secretary of the Interior's legal authority to implement regulations found in 25 C.F.R. § 291 ("Secretarial Procedures" or "Part 291 regulations"). The Secretarial Procedures, if adopted, would allow the Pueblo of Pojoaque to conduct Class III gaming on its reservation. New Mexico asks this Court to declare the Secretarial Procedures invalid because they conflict with the unambiguous terms of the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. § 2701 et seq. and violate New Mexico's sovereign immunity under the Eleventh Amendment.

Before this Court are the parties' cross-motions for summary judgment, filed on September 29, 2014: New Mexico's MOTION FOR SUMMARY JUDGMENT (New Mexico's Motion for Summary Judgment) (Doc. No. 39); Defendants Department of the Interior and Sally Jewell's MOTION FOR SUMMARY JUDGMENT (Defendants' Motion for Summary Judgment) (Doc. No. 37), and Intervenor Defendant Pueblo of Pojoaque's JOINDER AND MEMORANDUM IN SUPPORT OF DEFENDANT'S [sic] MOTION FOR SUMMARY JUDGMENT ("Pueblo's Motion") (Doc. No. 38). The parties filed their responses on October 6, 2014. See Doc. Nos. 40 (Pueblo's Response), 41 (New Mexico's Response), 42 (Defendants' Response). The parties filed their replies on October 14, 2014. See Doc. Nos. 43 (Pueblo's Reply), 44 (Defendants' Reply), 46 (New Mexico's Reply).¹

The Court will outline the facts and procedural history that led to the Parties' cross-motions for summary judgment. It will then address Defendants' arguments that this Court lacks jurisdiction to hear New Mexico's claims. Because the Court concludes it has jurisdiction to hear New Mexico's claims, the final part of this Memorandum Opinion and Order will address whether Defendants have the legal authority to enforce the Part 291 regulations.

BACKGROUND

a. The passage of IGRA and the United States Supreme Court's invalidation of its jurisdiction-granting clause

In California v. Cabazon Band of Mission Indians , 480 U.S. 202, 107 S.Ct. 1083, 94 L.Ed.2d 244 (1987), the United States Supreme Court held that absent Congressional authorization, States could not regulate or prohibit Indian tribes' on-reservation gambling activities. Id. at 207–210, 107 S.Ct. 1083. IGRA is a comprehensive statutory scheme that governs tribes' ability to conduct on-reservation gambling activities that Congress passed in response to Cabazon . One of IGRA's most important provisions gives States a role in regulating tribes' Class III gaming activities, which include lucrative slot machines and banked card games like blackjack. 25 U.S.C. § 2703(8). If a Tribe wishes to engage in Class III gaming activities, IGRA requires the Tribe to negotiate a binding compact with the State. 25 U.S.C. § 2710(d)(1)(C). It is worth noting that IGRA's compact requirement gives States a right to influence tribal gaming that States would otherwise not be afforded by the U.S. Constitution. Seminole Tribe of Fla. v. Florida , 517 U.S. 44, 58, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996).

In exchange for a seat at the poker table, IGRA requires States to negotiate Class III gaming compacts in "good faith." 25 U.S.C. § 2710(d)(3). IGRA's remedial process begins when a Tribe formally asks the State to enter into negotiations over a gaming compact. 25 U.S.C. § 2710(d)(3)(A). IGRA sets out the permissible areas of negotiation. 25 U.S.C. § 2710(d)(3)(C). If the parties agree to a compact, that is more or less the end of the matter; all that remains is for the Secretary of the Interior to review and approve the compact. Id. § 2710(d)(3)(B).

But what if a State refuses to put in its good-faith ante? In that case, the Tribe may bring suit against the State in federal district court. 25 U.S.C. § 2710(d)(7). If the court finds the State acted in bad faith, it can then order the State and the Tribe to execute a compact within sixty days. 25 U.S.C. § 2710(d)(7)(B)(iii). If the State keeps dragging its heels, the court may then order the parties to enter mediation. 25 U.S.C. § 2710(d)(7)(B)(iv). Under the mediation process, the State and the Tribe each submit their most recent "last best offer" for a compact to a court-appointed mediator. Id. The mediator then selects whichever proposal most comports with IGRA, the court's order and findings, and other applicable federal law. Id.

After all this, the State has one last opportunity to either accept or reject the mediator's proposal. 25 U.S.C. § 2710(d)(7)(B)(v)–(vii). If the State refuses the proposal, IGRA allows the Secretary of the Interior to call the State's bluff and adopt procedures allowing the Tribe to conduct Class III gaming under rules similar to the mediator's proposal but without a compact with the State. 25 U.S.C. § 2710(d)(7)(B)(vii).²

The United States Supreme Court threw IGRA's remedial scheme into disarray with its decision in Seminole Tribe of Fla. v. Florida , 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). In Seminole Tribe , the Supreme Court held that Congress had no authority under the Indian Commerce Clause, U.S. Const. art. I § 8, cl. 3, to subject States to suits filed by Indian tribes seeking a declaration of bad faith failure to negotiate a Class III gaming compact. Id. at 47. Seminole Tribe seriously weakened Indian tribes' bargaining power under IGRA, because it made unobtainable Tribes' sole remedy for States' bad faith. United States v. Spokane Tribe of Indians , 139 F.3d 1297, 1299 (9th Cir. 1998).

b. The Secretarial Procedures

Under IGRA, the Secretary of the Interior has authority to implement regulations allowing a Tribe to conduct Class III gaming activities without a tribal-state compact, but only at the very end of IGRA's remedial process (i.e., after a court finds the state has failed to negotiate in good faith and mediation has concluded). 25 U.S.C. § 2710(d)(7)(B)(vii)(II). To preserve IGRA's remedial scheme and to mitigate the effects of Seminole Tribe , the Secretary of the Interior adopted regulations which roughly imitate the process that would have taken place had the State not used its sovereign immunity to cause dismissal of the Tribe's bad faith claim in federal court.³ The regulations provide that when, as here, "[a] State and an Indian tribe are unable to voluntarily agree to a compact" and "[t]he State has asserted its immunity from suit brought by an Indian tribe under 25 U.S.C. § 2710(d)(7)(B)," 25 C.F.R. § 291.1 (1999), an Indian tribe may apply for Secretarial Procedures to operate Class III gaming without a compact with the State.

If the State invokes its sovereign immunity and the Tribe's bad faith case against the State is dismissed, the Tribe may submit a proposal to the Secretary of the Interior containing detailed information about the Tribe's proposed gaming procedures. 25 C.F.R. § 291.4 (1999). This includes records of the Tribe's past negotiations with the State and a proposed "[r]egulatory scheme for the State's oversight role, if any, in monitoring and enforcing compliance." Id. After the Department verifies that the Tribe's negotiations with the State have failed and that the State successfully obtained dismissal of the Tribe's bad faith lawsuit by invoking the State's sovereign immunity, the Secretary issues a "final" determination that the Tribe is eligible for the Secretarial Procedures. 25 C.F.R. § 291.6 (1999). Once this eligibility determination is made, the Department solicits comments from the State. 25 C.F.R. § 291.7 (1999). The State may comment on the Tribe's proposal and even propose its own. Id.

If the State refuses to submit comments or an alternative proposal, the Secretary independently determines whether the Tribe's proposal meets the following requirements:

(1) Whether all requirements of [ 25 C.F.R.] § 291.4 [i.e., the initial procedures eligibility determination] are adequately addressed;

(2) Whether Class III gaming activities will be conducted on Indian lands over which the Indian tribe has jurisdiction;

(3) Whether contemplated gaming activities are permitted in the State for any purposes by any person, organization, or entity;

(4) Whether the proposal is consistent with relevant provisions of the laws of the State;

(5) Whether the proposal is consistent with the trust obligations of the United States to the Indian tribe;

(6) Whether the proposal is consistent with all applicable provisions of IGRA; and

(7) Whether the proposal is consistent with provisions of other applicable Federal laws.

25 C.F.R. § 291.8 (1999). At this point, the Department may approve or disapprove of the Tribe's proposal. 25 C.F.R. § 291.8(b)–(c) (1999).

If the State makes an alternate proposal, the Secretary must appoint a mediator with "no official, financial, or personal conflict of interest with respect to the issues in controversy" who then seeks to "resolve differences between the two proposals." 25 C.F.R. § 291.9 (1999). After hearing evidence and argument from both sides, the mediator selects the proposal that "best comports with the terms of IGRA and any other...