U.S. v. 1020 Electronic Gambling Machines

• Decision Date: 10 December 1998
• Docket Number: No. CS-98-265-FVS.,CS-98-265-FVS.
• Citation: 38 F.Supp.2d 1213
• Parties: UNITED STATES of America, Plaintiff, v. 1020 ELECTRONIC GAMBLING MACHINES, Defendant.
• Court: U.S. District Court — District of Washington

38 F.Supp.2d 1213

UNITED STATES of America, Plaintiff, v. 1020 ELECTRONIC GAMBLING MACHINES, Defendant.

No. CS-98-265-FVS.

United States District Court, E.D. Washington.

December 10, 1998.

James R. Shively, Thomas O. Rice, Assist. U.S. Attorneys, Spokane, WA, for plaintiff.

Scott D. Crowell, David R. Lundgren, Kirkland, WA, for defendant.

ORDER GRANTING FORFEITURE

VAN SICKLE, District Judge.

THIS MATTER came before the Court based upon cross motions for summary judgment. The United States was represented by Assistant United States Attorneys James R. Shively and Thomas O. Rice. The Spokane Tribe of Indians was represented by Scott D. Crowell and David R. Lundgren.

I.

The Spokane Tribe of Indians ("Tribe") is operating 1020 electronic gambling machines on its reservation. The United States seeks the machines' forfeiture under the Johnson Act, 15 U.S.C. §§ 1171-1178. The Tribe has filed a claim to the machines, see Rule C(6), Supplemental Rules for Certain Admiralty and Maritime Claims, 28 U.S.C., and opposes the government's request for forfeiture. The Court has jurisdiction by virtue of 28 U.S.C. §§ 1345 and 1355.

II.

The Johnson Act prohibits the possession of gambling devices within Indian country. 15 U.S.C. § 1175(a).¹ Gambling devices possessed in violation of § 1175(a) are subject to forfeiture. 15 U.S.C. § 1177. Forfeiture actions brought under the Johnson Act are governed by "customs laws." Id. Consequently, the parties' burdens in this action are derived from 19 U.S.C. § 1615. United States v. $129,727.00 U.S. Currency, 129 F.3d 486 492 (9th Cir.1997), cert. denied, ___ U.S. ___, 118 S.Ct. 1399, 140 L.Ed.2d 657 (1998). Under 19 U.S.C. § 1615, the United States must first demonstrate probable cause to believe the defendant machines are being possessed or used in violation of 15 U.S.C. § 1175(a). See id. If the United States does so, the burden shifts to the Tribe to demonstrate that the machines are not forfeitable. See id.

The Tribe concedes the defendant machines are gambling devices as defined by 15 U.S.C. § 1171. (Stipulation of August 3, 1998 at 2-3.) The Tribe further concedes the machines are being possessed and used within Indian Country. Id. The Tribe's concession is sufficient to establish probable cause. Thus, the burden shifts to the Tribe to explain why the machines should not be forfeited. 19 U.S.C. § 1615.

III.

Since, according to the Tribe, the Johnson Act does not preclude states from possessing or using gambling devices, Indian tribes should be excluded as well. As authority, the Tribe cites Reich v. Great Lakes Indian Fish and Wildlife Commission, 4 F.3d 490 (7th Cir.1993) (hereinafter "Great Lakes"). In that case, the question was whether a section of the Fair Labor Standards Act, 29 U.S.C. §§ 201-219, that limits the circumstances in which state and local governments must pay overtime to their law enforcement officers applies to Indian tribes even though the FLSA does not mention tribes. Id. at 493. Finding no good reason to deny Indian tribes the benefit of the exception, and concluding that considerations of comity and respect for tribal sovereignty weighed in favor of extending the exception to tribes, the Seventh Circuit did just that. Id. at 494-95.

The Tribe's reliance upon Great Lakes is misplaced. In order for the Seventh Circuit's rationale to apply, § 1175(a) would have to allow states, but not Indian tribes, to operate gambling devices within "Indian Country." Nothing could be further from the truth. Section 1175(a) makes no distinction between tribes and states with respect to the operation of gambling devices on Indian reservations. As a result, the Seventh Circuit's decision offers little guidance here.

Next, the Tribe argues that § 1175(a) does not prevent Indian tribes from possessing or using gambling devices. The Tribe notes that state regulation of gaming on Indian reservations implicates tribal sovereignty. See California v. Cabazon Band of Mission Indians, 480 U.S. 202, 218-22, 107 S.Ct. 1083, 1093-95, 94 L.Ed.2d 244 (1987). Since, as a general rule, tribal sovereignty may not be infringed absent an unmistakable expression of Congressional intent, see Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58-59, 98 S.Ct. 1670, 1677, 56 L.Ed.2d 106 (1978), and since § 1175(a) does not mention Indian tribes, the Tribe submits it is not governed by § 1175(a).

The Tribe is mistaken. Section 1175 clearly governs gaming on Indian reservations. See, e.g., United States v. Farris, 624 F.2d 890, 898 (9th Cir.1980), cert. denied, 449 U.S. 1111, 101 S.Ct. 919, 66 L.Ed.2d 839 (1981). Moreover, the sweeping language of § 1175(a) is an unmistakable indication Congress intended to divest all persons — including Indian tribes — of the authority to operate gambling devices within Indian country.² Consequently, the fact Indian tribes are not mentioned in § 1175(a) is of no significance. See Donovan v. Coeur d'Alene Tribal Farm, 751 F.2d 1113, 1115-16 (9th Cir.1985).

That conclusion is supported by the text of the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. § 2701 et seq. IGRA divides games of chance into three classes. United States v. Spokane Tribe of Indians, 139 F.3d 1297, 1299 (9th Cir.1998) ("Spokane Tribe"). The defendant machines are used for Class III gaming. As the United States points out, IGRA creates a conditional exemption for class III gaming:

The provisions of section 1175 of Title 15 shall not apply to any (class III) gaming conducted under a Tribal-State compact that —

(A) is entered into ... by a State in which gambling devices are legal, and

(B) is in effect.

25 U.S.C. § 2710(d)(6). The fact Congress created a conditional exception for class III gaming indicates that Congress intends such gaming and its sponsors to remain subject to § 1175(a) until the relevant conditions are satisfied.

For the defendant machines to be exempt from § 1175(a), the Tribe must have a compact with the State of Washington. 25 U.S.C. § 2710(d)(6). The Tribe freely concedes it does not. Thus, the defendant machines are subject to § 1175(a). See Crow Tribe of Indians v. Racicot, 87 F.3d 1039, 1046 (9th Cir.1996) (where an Indian tribe operated slot machines that were not permitted by its IGRA compact with the State of Montana, "the Johnson Act [was] applicable and the use of slot machines [was] illegal").

IV.

Nonetheless, the Tribe objects to forfeiture, alleging that the State of Washington has refused to negotiate in good faith. Since the Tribe cannot bring an action in federal court to compel the State to negotiate, Spokane Tribe, 139 F.3d at 1299, the Tribe argues that the Attorney General has a duty to bring an action against the State on its behalf, or that the Secretary of the Interior has a duty to promulgate regulations adjudicating its rights under IGRA.

The United States "owes a fiduciary obligation to all Indian tribes as a class." Inter Tribal Council of Arizona v. Babbitt, 51 F.3d 199, 203 (1995). More specific fiduciary duties may arise when the United States manages Indian resources. See id. For example, in United States v. Mitchell, 463 U.S. 206, 210, 103 S.Ct. 2961, 2965, 77 L.Ed.2d 580 (1983), the Supreme Court noted that the Secretary of the Interior had assumed a "pervasive role" in the sale of timber grown on the Quinault Reservation in western Washington. Id. at 219, 103 S.Ct. at 2969. The Secretary's role was spelled out in detail in timber management statutes and the regulations promulgated thereunder. Id. 219-223, 103 S.Ct. at 2969-71. Those statutes and regulations, the Supreme Court said, "clearly [gave] the Federal Government full responsibility to manage Indian resources and land for the benefit of the Indians. They thereby establish[ed] a fiduciary relationship and define[d] the contours of the United States' fiduciary responsibilities." Id. at 224, 103 S.Ct. at 2971-72.³

The Tribe argues that specific fiduciary duties may be imposed upon the United States based upon the roles assigned to the National Indian Gaming Commission, 25 U.S.C. § 2704, and the Secretary of the Interior. Neither contention can be sustained.

The Commission does have significant powers. 25 U.S.C. § 2706. However, the authority it exercises is regulatory in nature, not managerial. Furthermore, it regulates class II gaming, whereas this case involves class III gaming. As a result, there is no basis for imposing specific trust duties upon the United States due to the Commission's role in Indian gaming.

Evaluating the role assigned to the Secretary of the Interior is more complicated because IGRA has been altered by the Supreme Court. Seminole Tribe of Florida v. Florida, 517 U.S. 44, 74-75, 116 S.Ct. 1114, 1133, 134 L.Ed.2d 252 (1996) (Congress violated the Eleventh Amendment by including a clause abrogating the states' immunity from suit in federal court). However, even before Seminole, the Secretary was not responsible for negotiating Tribal-State compacts. That was the task of tribes and states. 25 U.S.C. § 2710(d)(3). Nor was the Secretary responsible for bringing failure-to-negotiate actions against states. That was the task of tribes. 25 U.S.C. § 2710(d)(7). Nor was the Secretary assigned a major role in resolving such disputes. During the pre-Seminole dispensation, federal courts were to appoint independent mediators. 25 U.S.C. § 2710(d)(7)(B)(iv). It was the mediator who evaluated competing compacts. Id. While the Secretary was responsible for promulgating those regulations necessary to implement the mediator's decision, the Secretary's discretion was limited. 25 U.S.C. § 2710(d)(7)(vii). Finally, after a compact was in place, the Secretary had no role in managing class III gaming. That was the tribe's responsibility. In the aftermath of Seminole, the Secretary's role is even less significant. As a result, there is no basis for imposing specific trust duties upon the United States due to the Secretary's role in Indian gaming. See Pueblo of Santa Ana v....