U.S. v. 1020 Electronic Gambling Machines, CS-98-265-FVS.

• Decision Date: 19 January 1999
• Docket Number: No. CS-98-265-FVS.,CS-98-265-FVS.
• Citation: 38 F.Supp.2d 1219
• Parties: UNITED STATES of America, Plaintiff, v. 1020 ELECTRONIC GAMBLING MACHINES, Defendant.
• Court: U.S. District Court — District of Washington

38 F.Supp.2d 1219

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

No. CS-98-265-FVS.

United States District Court, E.D. Washington.

January 19, 1999.

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 STAY

VAN SICKLE, District Judge.

THIS MATTER came before the Court on December 30, 1998. The Confederated Tribes of the Colville Reservation and the Spokane Tribe of Indians move the Court to stay the judgments entered against them. The Confederated Tribes were represented by Bruce R. Greene and Timothy Brewer; the Spokane Tribe by Scott D. Crowell and David R. Lundgren. The United States was represented by Assistant United States Attorneys James R. Shively. This order serves to memorialize the Court's oral ruling.

BACKGROUND

The government filed separate actions against the Confederated Tribes of the Colville Reservation and the Spokane Tribe of Indians (hereinafter "Tribes") seeking forfeiture of certain gambling devices pursuant to the Johnson Act, 15 U.S.C. §§ 1171-1178. Separate judgments have been entered against the Tribes requiring them to surrender the gambling devices to the government. The Tribes move the Court to stay the judgments.

STANDARD

The Tribes' bring their respective requests under Federal Rule of Civil Procedure 62(c). The factors traditionally considered in determining whether a stay is available under Rule 62(c) are these: "(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies." Hilton v. Braunskill, 481 U.S. 770, 776, 107 S.Ct. 2113, 2119, 95 L.Ed.2d 724 (1987).

LIKELIHOOD OF SUCCESS

Whether the Tribes are likely to succeed on appeal depends upon the answers to a number of questions.

A. Are Indian tribes subject to the Johnson Act?

The Johnson Act prohibits the possession or use of gambling devices on Indian reservations. 15 U.S.C. § 1175(a). The Ninth Circuit has held that Indian tribes are subject to the Johnson Act. See Crow Tribe of Indians v. Racicot, 87 F.3d 1039, 1046 (9th Cir.1996) (Racicot). The Tribes argue that Racicot is distinguishable, and that the Court erred by failing to follow Reich v. Great Lakes Indian Fish and Wildlife Commission, 4 F.3d 490 (7th Cir.1993) (Reich).

In 1993, the State of Montana entered into an agreement with the Crow Tribe under the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. § 2701 et seq. The agreement authorized the Crow Tribe to conduct certain types of gaming on its reservation. Racicot, 87 F.3d at 1042. Later, a dispute arose concerning slot machines. When a tribally-chartered corporation began operating such devices in a casino on the reservation, state and federal law enforcement officers entered the casino pursuant to a search warrant and seized the devices. Id. The tribe sued the state in federal court alleging that, among other things, the state violated the Fourth Amendment by seizing the slot machines. Id. The tribe's Fourth Amendment claim had two components: "(1) that no substantial basis for probable cause could exist to search the casino and seize the slot machines because the use of the slot machines was lawful under IGRA and the compact, and (2) that the magistrate who issued the search warrant was misled...." Id. at 1046. The Ninth Circuit concluded that the tribe was not authorized to operate slot machines. Id. Consequently, the circuit court affirmed the district court's decision to dismiss the tribe's Fourth Amendment claim, saying, "The Crow have neither the right to interpret the compact nor to operate mechanical slot machines. Under these circumstances, the Johnson Act is applicable and the use of slot machines is illegal. See [25 U.S.C.] § 2710(c)(6); 15 U.S.C. § 1175. Moreover, we are not persuaded that [a state official] omitted or misrepresented any facts." Racicot, 87 F.3d at 1046.

The Tribes maintain Racicot is limited to situations in which a state (or the United States) is attempting to enforce a valid tribal-state compact. While a compact existed in Racicot, that fact should not obscure the larger point: The Ninth Circuit applied the Johnson Act to an Indian tribe, not individual Indians. Thus, the Tribes' assertion that the Johnson Act applies only to individuals — never to Indian tribes as tribes — is inconsistent with this circuit's precedent.

Reich arose when the Department of Labor attempted to enforce a subpoena seeking payroll records from the Great Lakes Indian Fish and Wildlife Commission. The Department had served the subpoena in an effort to determine whether the Commission was paying overtime compensation to its wardens as required by the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-219. 4 F.3d at 491. Consequently, to understand Reich, it is useful to review the FLSA provisions at issue in that case.

The FLSA requires employers to pay overtime to employees who work more than 40 hours per week. 29 U.S.C. § 207(a)(1). Both states and Indian tribes are employers within the meaning of the FLSA. 29 U.S.C. § 203(d), (a). As a result, both are required to comply with FLSA overtime requirements.

Congress has softened the impact of the FLSA on public agencies. While they are not entirely exempt from § 207(a)(1), they enjoy a certain amount of flexibility when it comes to paying overtime to fire fighters and law enforcement officers, 29 U.S.C. § 207(k), and they are entitled to substitute compensatory time for cash compensation in certain circumstances. 29 U.S.C. § 207(o).

In Reich, one of the questions was whether the Commission was entitled to the benefit of the public-agency "exemptions." The Department said, "No." Noting that the FLSA defines the term "public agency," 29 U.S.C. § 203(x), and that the FLSA definition does not mention Indian tribes, the Department argued that the Commission is not entitled to the benefit of subsection 207(k) and 207(o).

The Seventh Circuit was troubled by the Department's interpretation of § 203(x) because it could see no reason to treat tribal wardens differently than state law enforcement officers. Although the Department was literally correct, the Seventh Circuit rejected its interpretation of § 203(x) on the ground it would "create a senseless distinction between Indian police and all other police." 4 F.3d at 494. Instead, the Seventh Circuit concluded that Congress' failure to mention Indian tribes was simply a matter of oversight. Id. Citing considerations of comity and tribal sovereignty, the Seventh Circuit rectified the perceived oversight by extending the benefits of subsections 207(k) and 207(o) to the Commission's wardens. 4 F.3d at 495-96.

The Tribes seek to invoke the Seventh Circuit's rationale here. In order to do so, they must show that both Indian tribes and states are nominally subject to 15 U.S.C. § 1175(a); that the Johnson Act contains an exemption for states, but not Indian tribes; that the exemption creates a senseless distinction between states and tribes; and that had Congress considered the issue, it would have extended the exemption to tribes as well as states.

Like the FLSA, both states and Indian tribes are nominally subject to § 1175(a). Unlike the FLSA, however, there are no exemptions to § 1175(a) as it pertains to Indian reservations.¹ No one is permitted to possess or use gambling devices on Indian reservations under any circumstances. Consequently, Indian tribes are treated no differently than anyone else with respect to the regulation of gambling devices on Indian reservations.

The Tribes do not suggest otherwise. Instead, they note that the Johnson Act does not forbid states from possessing gambling devices on non-reservation land. This alleged exemption for states creates a senseless distinction, they submit. A state may authorize the operation of gambling devices on land within its jurisdiction, but an Indian tribe may not authorize the operation of gambling devices on land within its jurisdiction. According to the Tribes, Congress could not have intended such a result.

There are at least two problems with the Tribes' position. One, their proposed "exemption" is not an exemption at all. Two, the distinction of which they complain is one Congress chose to make.

To understand why the Tribes' proposed "exemption" is not an exemption, it is necessary to return to Reich. As will be recalled, 29 U.S.C. § 207(a)(1) imposes upon employers a duty to pay overtime. Since subsections 207(k) and 207(o) relieve public agencies of that duty, it makes sense to refer to them as exemptions. See American Paper Institute, Inc. v. American Electric Power Service Corp., 461 U.S. 402, 421, 103 S.Ct. 1921, 1932, 76 L.Ed.2d 22 (1983) ("The term `exemption' is ordinarily used to denote relief from a duty or service.") Thus, to show that 15 U.S.C. § 1175(a) is subject to a Reich-like exemption, the Tribes must demonstrate that someone nominally covered by § 1175(a) need not comply with the duties it imposes. Given the facts of this case, that means identifying someone who is authorized to possess or operate gambling devices on Indian reservations. That the Tribes cannot do. As a result, § 1175 is free from the type of ambiguity the Seventh Circuit found in the FLSA.

Moreover, text of the Johnson Act indicates Congress intended to create the distinction of which the Tribes complain. By including one section recognizing the broad of authority of states to permit the possession of gambling devices on non-reservation land,² and another section withdrawing from all persons the authority to possess gambling devices on reservation land,³ Congress made an unmistakable statement: It intended to give states more latitude...