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December 22, 1999


The opinion of the court was delivered by: McAVOY, Chief Judge.



A. Facts

This action concerns whether the Turning Stone Casino's offering of a new game called Instant Multi-Game ("Multi-Game")*fn1 violates the Compact executed between Plaintiff, the State of New York (the "State"), and Defendant the Oneida Indian Nation of New York (the "Nation").

The Indian Gaming Regulatory Act, 25 U.S.C. § 2701-2721 ("IGRA"), was passed by Congress in 1988, among other reasons, "to provide a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments." See 25 U.S.C. § 2702(1). The IGRA divides gambling into three classes that correspond with different levels of state regulation. Class I gaming includes social games for nominal prizes. 25 U.S.C. § 2703(6). This class of gaming is within the exclusive control of the tribes and is exempt from state control and IGRA regulations or prohibitions. Class II gaming is more explicitly defined as including bingo, cards and lotto. A tribe may engage in, or license and regulate, Class II gaming on Indian lands so long as "such Indian gaming" is located within a State that permits such gaming, such gaming is not prohibited by federal law, and the governing body of the Indian tribe adopts an ordinance or resolution that is approved by the Chairman of the National Indian Gaming Commission. See 25 U.S.C. § 2710(b)(1).

Class III gaming is defined under IGRA as simply "all forms of gaming that are not Class I gaming or Class II gaming." 25 U.S.C. § 2703(8). For example, all electronic versions of Class II games are Class III gaming. Further examples of Class III gaming are those games typically found in Las Vegas and Atlantic City casinos, including slot machines, blackjack, roulette, and off-track betting. Class III gaming provides the majority of Indian gaming profits and typically involves larger stakes than Class I or Class II gaming; thus, closer regulation is required. For a tribe to offer Class III gaming, the tribe must meet the authorization requirements under IGRA; that is, the gaming must be authorized by a tribal ordinance approved by the National Indian Gaming Commission (the "NIGC"), permitted by the state for some person or organization, and covered by a tribal-state compact. IGRA requires a tribal-state compact before Class III games may be offered. It is within the State's discretion whether to enter into such a compact, however, the IGRA requires that both the state and tribe negotiate in good faith for the purpose of entering into such a compact. See 25 U.S.C. § 2710(d)(3)(A).

The Nation has satisfied the IGRA's requirements with respect to Class III gaming at the Turning Stone Casino. The State and the Nation executed a Compact (the "Compact") in April 1993 and the Acting Assistant Secretary for Indian Affairs of the United States Department of the Interior approved the Compact on June 4, 1993, as required by 25 U.S.C. § 2710(d)(3)(B). There is a list of "approved" games in Appendix A to the Compact. Nation-State Compact, app. A. By the terms of the Compact:

  The Nation may request that additional games or
  activities, or new specifications for existing games
  or activities, be added to Appendix A by submitting
  written specifications to the State. The State shall
  within fifteen (15) days notify the Nation that it
  accepts or rejects the game or activity for Appendix
  A to the Compact. If the State accepts the game or
  activity, the game or activity and its specifications
  shall be added to Appendix A effective as of the date
  of the State's acceptance of that game or activity.

Nation-State Compact § 15(b)(3).

The Nation made a written request to the New York State Racing and Wagering Board (the "Board") dated November 22, 1994, to amend Appendix A to include Multi-Game and its specifications. With mercurial speed, on November 23, 1994, the Board sent written approval of the requested amendment adding Multi-Game to Appendix A. The Nation began offering Multi-Game at its Turning Stone Casino on March 10, 1995. On that same day, the Secretary to the Governor of New York, Bradford J. Race, Jr., sent a letter to Nation Representative Ray Halbritter stating that Multi-Game was not authorized under Appendix A. The State's position was, and is, that the Board did not have the authority to amend Appendix A and, thus, the appendix was not amended to include Multi-Game. Accordingly, the State asserted, and continues to assert in the present litigation, that the Nation's offering of Multi-Game violates the Compact because the Nation did not receive appropriate approval in accordance with the Compact.

The Nation continues to operate Multi-Game at the Turning Stone Casino.

B. Procedural History

In the Fall of 1995, the Nation moved to dismiss the Complaint, raising a number of defenses, one of which was the Compact's mandatory arbitration clause. In a bench opinion, this Court ruled that the State's claim was covered by the mandatory arbitration clause and, thus, dismissed the claim for lack of subject matter jurisdiction under FED. R. CIV. P. 12(b)(1). On appeal, the Second Circuit reversed and remanded for further proceedings, holding that the case is not subject to mandatory arbitration because the parties specifically excluded it from the general arbitration clause. See The State of New York v. The Oneida Indian Nation of New York, 90 F.3d 58 (2d Cir. 1996).

Upon remand, the action was stayed upon the stipulation of the parties and the order of the Court in an effort to facilitate settlement. Once settlement attempts stalled, however, the Nation filed the present motion to dismiss the Complaint pursuant to FED. R. CIV. P. 12(b)(1) and (6).

On January 12, 1999, the Court heard oral argument on Defendants' motion to dismiss. By agreement of the parties, the Court reserved decision on the Nation's motion and stayed the action based on its understanding that the parties were progressing toward settlement. The parties were instructed to file status reports with this Court every forty-five (45) days and advised that if a settlement agreement had not been entered by December 15, 1999, the stay would be lifted and a decision on the Nation's pending motion to dismiss would be rendered. The parties filed a status report dated November 29, 1999 which indicated that, although settlement negotiations continued, an agreement had not been reached. Noting that this case has been pending for nearly five years while the parties attempted to reach settlement and pursuant to its earlier direction, this Court will now lift a stay and render a decision on the motion to dismiss.


The Nation moves to dismiss the State's Complaint pursuant to FED. R. CIV. P. 12(b)(1) and (6). The Nation advances five arguments for dismissal: (1) the Complaint fails to allege a violation of the Compact; (2) the Complaint fails to allege that the Board lacked authority to approve new games such as Multi-Game; (3) the doctrine of primary jurisdiction requires the State to present its claim to the NIGC before commencing a federal suit; (4) the Nation's sovereign immunity bars the State's claims; and (5) the Supreme Court's decision in Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S.Ct. 1114 (1996), operates to invalidate the statutory subsection upon which the State sues.

The standards for dismissal under Rule 12(b)(1) and (6) are well-settled and need not be restated here. The Court has set forth the appropriate standard to be applied in numerous published decisions. See, e.g., Anheuser-Busch v. G.T. Britts Distrib., Inc., 44 F. Supp.2d 172, 174 (N.D.N.Y. 1999). The Court will apply the standard as stated in those ...

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