Taxpayers of Mich. Against Casinos v. State

• Citation: 471 Mich. 306,685 N.W.2d 221
• Decision Date: 30 July 2004
• Docket Number: Docket No. 122830, Calendar No. 6.
• Parties: TAXPAYERS OF MICHIGAN AGAINST CASINOS, and Laura Baird, Plaintiffs-Appellants, v. The STATE of Michigan, Defendant-Appellee, and North American Sports Management Company, Inc, IV, and Gaming Entertainment, LLC., Intervening Defendants-Appellees.
• Court: Supreme Court of Michigan

685 N.W.2d 221

471 Mich. 306

TAXPAYERS OF MICHIGAN AGAINST CASINOS, and Laura Baird, Plaintiffs-Appellants, v. The STATE of Michigan, Defendant-Appellee, and North American Sports Management Company, Inc, IV, and Gaming Entertainment, LLC., Intervening Defendants-Appellees.

Docket No. 122830, Calendar No. 6.

Supreme Court of Michigan.

Argued March 11, 2004.

Decided July 30, 2004.

Warner Norcross & Judd LLP (by Robert J. Jonker, William C. Fulkerson, Norbert F. Kugele, and Daniel K. DeWitt), Grand Rapids, MI, for the Taxpayers of Michigan Against Casinos.

Barris, Sott, Denn & Driker, P.L.L.C. (by Eugene Driker and Thomas F. Cavalier), Detroit, MI, for the state of Michigan.

Dykema Gossett PLLC (by Richard D. McLellan, Bruce G. Davis, R. Lance Boldrey, and Kristine N. Tuma), Lansing, MI, for intervening defendant Gaming Entertainment, LLC.

Rhoades McKee (by Bruce W. Neckers and Bruce A. Courtade), Grand Rapids, MI, for the Grand Rapids Area Chamber of Commerce.

Senate Majority Counsel (by Alfred H. Hall, Michael G. O'Brien, Phillip A. Hendges, and Pamela S. Haynes), Lansing, for Senate Majority Leader Ken Sikkema and Senator Shirley Johnson.

Miller, Canfield, Paddock and Stone, P.L.C. (by Kevin J. Moody and Jaclyn Shoshana Levine), Lansing, MI, for the Sault Ste. Marie Tribe of Chippewa Indians.

Kanji & Katzen, PLLC (by Riyaz A. Kanji), Ann Arbor, MI, and Drummond, Woodsum & MacMahon (by Kaighn Smith and Robert Gips), Portland, Maine, for the Little River Band of Ottawa Indians, the Little Traverse Bay Bands of Odawa Indians, and the Pokagon Band of Potawatomi Indians of Michigan.

James A. Bransky, General Counsel, Petoskey, MI, for the Little Traverse Bay Bands of Odawa Indians.

Michael G. Phelan, Dowagiac, MI, for the Pokagon Band of Potawatomi Indians.

Wheeler Upham, P.C. (by Geoffrey L. Gillis), Grand Rapids, MI, and Sonosky, Chambers, Sachse, Endreson & Perry, LLP (by William R. Perry and Mary P. Pavel), Washington, DC, for the Nottawaseppi Huron Band of Potawatatomi.

William Brooks, Mainstee, MI, for the Little River Band of Ottawa Indians.

Schuitmaker, Cooper & Schuitmaker, P.C. (by Harold Schuitmaker), Paw Paw, MI, for the city of New Buffalo.

Dewane, Peterson, McMahon & Cullitan, P.L.C. (by David M. Peterson), St. Joseph, MI, for the New Buffalo Township.

Opinion

CORRIGAN, C.J.

In this declaratory action, we must determine: (1) whether House Concurrent Resolution (HCR) 115 (1998), the Legislature's approval by resolution of tribal-state gaming compacts, constituted "legislation" and therefore violated Const. 1963, art. 4, ž 22; (2) whether the compacts' amendatory provision providing that the Governor may amend the compacts without legislative approval violates the separation of powers doctrine found in Const 1963, art 3, ž 2; and (3) whether HCR 115 is a local act in violation of Const. 1963, art. 4, ž 29.

We hold that the Legislature's approval of the compacts through HCR 115 did not constitute legislation. In approving those compacts by resolution, the Legislature did not modify Michigan law in any respect; instead, the Legislature simply expressed its approval of valid contracts between two independent, sovereign entities. Although Michigan's gaming law would have applied to gaming on tribal lands in the absence of a tribal-state compact, it applied only as a matter of federal law. Compacts establishing the terms of class III gaming on tribal lands modified only federal law. Therefore, our Constitution does not require that our Legislature express its approval of these compacts through bill rather than resolution.

We further hold that although the issue of the amendment provision in the compacts may now be ripe for review, the lower courts have yet to review this issue and make any specific findings regarding whether the amendatory provision in the compacts, as now invoked by Governor Granholm, violates the separation of powers provisions found in Const 1963, art 3, ž 2. Finally, we hold that HCR 115 is not a "local act" and therefore does not violate Const. 1963, art. 4, ž 29. Accordingly, we remand the amendment provision issue to the Court of Appeals for consideration, but otherwise affirm the decision of the Court of Appeals.

I. FACTUAL HISTORY AND PROCEDURAL POSTURE

A. BACKGROUND: FEDERAL LAW REGARDING TRIBAL GAMING

Knowledge of the underlying federal law is necessary to understand the factual posture of this case. In California v. Cabazon, 480 U.S. 202, 207, 107 S.Ct. 1083, 94 L.Ed.2d 244 (1987), the United States Supreme Court held that state laws may only be applied to tribal lands "if Congress has expressly so provided." The Court held that because Congress had not provided for the regulation of tribal gaming, a state could only prohibit gaming on tribal lands if the state completely prohibited all gaming within its borders.

In response to Cabazon, Congress passed the Indian Gaming Regulatory Act (IGRA), 25 USC 2701 et seq., which divides gaming activities into three classes. Class I gaming consists of "social games solely for prizes of minimal value or traditional forms of Indian gaming engaged in by individuals as a part of, or in connection with, tribal ceremonies or celebrations." 25 USC 2703(6). Class II gaming includes bingo and card games (but not banking card games) that are played in conformance with state laws and regulations regarding hours of operation and limitations on wagers or pot sizes. 25 USC 2703(7). Class III gaming includes all other forms of gambling, including casino gaming. 25 USC 2703(8).

At issue in this case is class III gaming. Under IGRA, tribes may engage in class III gaming only pursuant to a tribal-state compact that is approved by the Secretary of the Interior. 25 USC 2710(d) provides, in relevant part:

(1) Class III gaming activities shall be lawful on Indian lands only if such activities are ÔÇö

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(B) located in a State that permits such gaming for any purpose by any person, organization, or entity, and

(C) conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State under paragraph (3) that is in effect.

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(3) (A) Any Indian tribe having jurisdiction over the Indian lands upon which a class III gaming activity is being conducted, or is to be conducted, shall request the State in which such lands are located to enter into negotiations for the purpose of entering into a Tribal-State compact governing the conduct of gaming activities. Upon receiving such a request, the State shall negotiate with the Indian tribe in good faith to enter into such a compact.[¹]

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(C) Any Tribal-State compact negotiated under subparagraph (A) may include provisions relating to ÔÇö (i) the application of the criminal and civil laws and regulations of the Indian tribe or the State that are directly related to, and necessary for, the licensing and regulation of such activity;

(ii) the allocation of criminal and civil jurisdiction between the State and the Indian tribe necessary for the enforcement of such laws and regulations;

(iii) the assessment by the State of such activities in such amounts as are necessary to defray the costs of regulating such activity;

(iv) taxation by the Indian tribe of such activity in amounts comparable to amounts assessed by the State for comparable activities;

(v) remedies for breach of contract;

(vi) standards for the operation of such activity and maintenance of the gaming facility, including licensing; and

(vii) any other subjects that are directly related to the operation of gaming activities.

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(5) Nothing in this subsection shall impair the right of an Indian tribe to regulate class III gaming on its Indian lands concurrently with the State, except to the extent that such regulation is inconsistent with, or less stringent than, the State laws and regulations made applicable by any Tribal-State compact entered into by the Indian tribe under paragraph (3) that is in effect.

Through ž 2710(d), Congress expressly provided for tribal-state negotiations regarding class III gaming. Through this compacting process, the tribes and the states may agree to the terms governing such gaming.

B. FACTUAL HISTORY

The compacts at issue in this case were first signed by Governor Engler and four Indian tribes² in January of 1997. Each compact provided that it would take effect after "[e]ndorsement by the Governor of the State and concurrence in that endorsement by resolution of the Michigan Legislature."³ The compacts were modified and re-executed in December 1998, and the Legislature then approved the compacts by resolution through HCR 115.⁴

The validity of the 1998 compacts was challenged through several lawsuits.⁵ Plaintiffs filed this suit against defendant in the Ingham Circuit Court, seeking a declaratory judgment that the compacts do not comport with various constitutional provisions. Plaintiffs argue that the compacts amount to legislation and, therefore, pursuant to Const 1963, art 4, ž 22 the Legislature was required to adopt them by bill rather than approve them by resolution. The circuit court held that the compacts should have been approved by bill. The Court of Appeals reversed the circuit court decision, concluding that the compacts do not constitute legislation because they contain no enforcement provision that would ensure that their terms are satisfied and because the power of the state to legislate in this area is preempted by federal law. The Court of Appeals opined that the compacts constitute mere contracts and, therefore, approval by resolution was not constitutionally infirm.

Plaintiffs also contend that the provision in the compacts that purports to empower the Governor to amend them without legislative approval violates Const 1963, art 3, ž 2, the "separation of powers" doctrine. The circuit court agreed with plaintiffs. The Court of Appeals, however, reversed the decision of the circuit court on the basis that the amendatory provision issue was not...