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Citizens Against Casino Gambling in Erie County v. Kempthorne

January 12, 2007

CITIZENS AGAINST CASINO GAMBLING IN ERIE COUNTY, REV. G. STANFORD BRATTON, D. MIN., EXECUTIVE DIRECTOR OF THE NETWORK OF RELIGIOUS COMMUNITIES, NATIONAL COALITION AGAINST GAMBLING EXPANSION, PRESERVATION COALITION OF ERIE COUNTY, INC., COALITION AGAINST CASINO GAMBLING IN NEW YORK-ACTION, INC., THE CAMPAIGN FOR BUFFALO- HISTORY ARCHITECTURE AND CULTURE, ASSEMBLYMAN SAM HOYT, MARIA WHYTE, JOHN MCKENDRY, SHELLY MCKENDRY, DOMINIC J. CARBONE, GEOFFREY D. BUTLER, ELIZABETH F. BARRETT, JULIE CLEARLY, ERIN C. DAVISON, ALICE E. PATTON, AND MAUREEN C. SCHAEFFER, PLAINTIFFS, AND COUNTY OF ERIE AND JOEL A. GIAMBRA, INTERVENOR-PLAINTIFFS,
v.
DIRK KEMPTHORNE,*FN1 IN HIS OFFICIAL CAPACITY AS THE SECRETARY OF THE INTERIOR, JAMES CASON, IN HIS OFFICIAL CAPACITY AS THE ACTING ASSISTANT SECRETARY OF THE INTERIOR FOR INDIAN AFFAIRS, UNITED STATES DEPARTMENT OF THE INTERIOR, PHILIP N. HOGEN, IN HIS CAPACITY AS CHAIRMAN OF THE NATIONAL INDIAN GAMING COMMISSION, AND NATIONAL INDIAN GAMING COMMISSION, DEFENDANTS.



The opinion of the court was delivered by: William M. Skretny United States District Judge

DECISION AND ORDER

TABLE OF CONTENTS

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

A. Legal Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1. The Relevant Provisions of the IGRA . . . . . . . . . . . . . . . . . . . . . . 5

a. Indian Lands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

b. Tribal-State Gaming Compacts . . . . . . . . . . . . . . . . . . . . . 7

c. Tribal Gaming Ordinances . . . . . . . . . . . . . . . . . . . . . . . . . 8

2. The Seneca Nation Settlement Act of 1990 . . . . . . . . . . . . . . . . . 9

B. Factual Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

1. The SNI's Tribal-State Compact . . . . . . . . . . . . . . . . . . . . . . . . . 11

2. The SNI's Class III Gaming Ordinance . . . . . . . . . . . . . . . . . . . . 14

3. The SNI's Land Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

C. The Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

III. DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

A. SNI's Motion for Leave to File an Amicus Brief . . . . . . . . . . . . . . . . . . . 18

1. Standard for Consideration of Amicus Curiae Participation . . . . 18

2. The Propriety of SNI's Proposed Submission . . . . . . . . . . . . . . 19

3. The Analytical Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

4. The Necessary Party Determination . . . . . . . . . . . . . . . . . . . . . . 23

ii.

B. Subject Matter Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

C. APA Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

1. Standard of Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

2. Review of Final Agency Action under the IGRA . . . . . . . . . . . . . 36

D. The NIGC's Approval of the SNI's Tribal Gaming Ordinance . . . . . . . . 38

E. The Remaining Claims and Motions . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

IV. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

V. ORDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

iii.

ABBREVIATIONS AND ACRONYMS

The following abbreviations and acronyms are used in this decision: STATUTES APA Administrative Procedure Act, 5 U.S.C. §§ 701 et seq. IGRA Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 et seq. NEPA National Environmental Policy Act, 42 U.S.C. §§ 4321 et seq. NHPA National Historic Preservation Act, 16 U.S.C. §§ 470 et seq. SNSA Seneca Nation Settlement Act of 1990, 25 U.S.C. §§ 1774 et seq. QTA Quiet Title Act, 28 U.S.C. § 2409a AGENCIES AND ENTITIES Chairman Chairman of the National Indian Gaming Commission NIGC National Indian Gaming Commission Secretary Secretary of the United States Department of the Interior SEGC Seneca Erie Gaming Corporation SNI Seneca Nation of Indians DOCUMENTS Compact "Nation-State Gaming Compact between the Seneca Nation of Indians and the State of New York," deemed approved by the Secretary as of October 25, 2002 Ordinance "Seneca Nation of Indians Class III Gaming Ordinance of 2002 as Amended," approved by the Chairman on November 26, 2002

iv.

I. INTRODUCTION

On January 3, 2006, Plaintiffs Citizens against Casino Gambling in Erie County, et al., commenced this action for declaratory and injunctive relief under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-706; the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. §§ 2701 et seq.; the National Environmental Policy Act ("NEPA"), as amended, 42 U.S.C. §§ 4321 et seq.; and the National Historic Preservation Act ("NHPA"), as amended, 16 U.S.C. §§ 470 et seq. Plaintiffs allege that former Secretary of the Interior Gale A. Norton; Acting Assistant Secretary of the Interior for Indian Affairs James Cason; the United States Department of the Interior; Chairman of the National Indian Gaming Commission Philip N. Hogen; and the National Indian Gaming Commission ("NIGC") (collectively, "Defendants" or "the Government") violated the laws of the United States when, by their decisions and actions, they permitted the Seneca Nation of Indians ("SNI") to construct a gambling casino on land it purchased in the City of Buffalo with funds appropriated pursuant to the Seneca Nation Settlement Act of 1990 ("SNSA").

There are four motions presently before this Court. First is the Government's Motion to Dismiss the Complaint in its entirety for lack of subject matter jurisdiction and failure to state a claim, filed on April 26, 2006.*fn2 (Docket No. 22.) On July 25, 2006, Plaintiffs filed a joint Motion for Summary Judgment as to all claims. (Docket No. 39.) On August 8, 2006, the SNI moved for leave to file an amicus brief seeking dismissal of the Complaint in its entirety pursuant to Rule 19 of the Federal Rules of Civil Procedure. (Docket No. 44.) Each of these motions has been fully briefed, was the subject of extensive oral argument on November 1, 2006, and is now pending for disposition. In addition, the Government moved to strike Plaintiffs' exhibits and portions of their Memorandum of Law in Support of Summary Judgment. (Docket No. 54.) The Motion to Strike was taken under advisement without oral argument.

As discussed more fully below, this Court will grant the SNI's motion for leave to file an amicus brief. However, after fully considering the SNI's position and the arguments set forth in its brief, this Court finds that neither the SNI nor the State of New York is a necessary and indispensable party to this action such that dismissal of the case is required under Rule 19 of the Federal Rules of Civil Procedure. Specifically, this Court finds that the SNI's interest in operating a gambling casino in the City of Buffalo is adequately represented by the Defendants in this action, who are vigorously defending their decisions to permit that very activity. Furthermore, the State does not have an interest in the subject matter of this litigation that will be impaired by a judgment in Plaintiffs' favor.

Defendants have moved to dismiss this action in its entirety on the grounds that: 1) the Quiet Title Act applies to this case and the Defendants are therefore immune from suit, 2) the Secretary of the Interior's ("the Secretary") "Indian lands" opinion is not a reviewable final agency action under the APA and therefore the Court lacks jurisdiction to consider Plaintiffs' claims, 3) the NIGC Chairman is not required to make an Indian lands determination and he fully carried out his statutory duties, and 4) Plaintiffs otherwise fail to state any claim against any Defendant.

This Court finds that Plaintiffs are not challenging the SNI's title to real property it purchased in the City of Buffalo and therefore rejects Defendants' argument that the Quiet Title Act renders Defendants immune from suit. However, this Court does agree with Defendants that the Secretary's "Indian lands" opinion was not a final agency action and, further, that no final agency action has occurred with respect to that determination. As such, the Secretary's opinion and related statutory interpretations are not yet reviewable under the APA, and this Court is without jurisdiction to review the IGRA claims against the Secretary. Accordingly, this Court will grant Defendants' motion to dismiss claims One and Two against the Secretary for lack of subject matter jurisdiction.

Having fully considered the purpose and structure of the IGRA, and the authority delegated to the NIGC by Congress, this Court rejects Defendants' contention that the NIGC Chairman is not required to make "Indian lands" determinations when he acts on a tribal gaming ordinance. To the contrary, whether Indian gaming will occur on Indian lands is a threshold jurisdictional question that the NIGC must address on ordinance review to establish that: 1) gaming is permitted on the land in question under the IGRA, and 2) the NIGC will have regulatory and enforcement power over the gaming activities occurring on that land. In this case, both the general location in which the SNI intended to purchase land and the manner in which it intended to acquire and hold that land were made known to the NIGC Chairman in 2002. However, there is no indication in the record that he considered that information or made any Indian lands determination when he affirmatively approved the SNI's class III gaming ordinance in 2002. Therefore, this Court will deny Defendants' motion to dismiss the IGRA claims against the NIGC.

As a result of this Court's conclusion that the NIGC failed to consider this threshold jurisdictional issue, this Court can not find that the NIGC's approval of a tribal gaming ordinance permitting the SNI to conduct gambling on newly acquired land in the City of Buffalo was the result of reasoned decision-making. Because the Indian lands determination is one that Congress placed in the NIGC's hands, the NIGC's 2002 ordinance approval is vacated as arbitrary and capricious insofar as it permits gaming on land to be acquired thereafter in the City of Buffalo. The SNI's ordinance will be remanded to the NIGC for an Indian lands determination with respect to the Buffalo Parcel.

As explained more fully below, the remand to the NIGC moots Plaintiffs' remaining claims and, consequently, Plaintiffs' Motion for Summary Judgment, Defendants' Motion to Strike and the remainder of Defendants' Motion to Dismiss are also rendered moot.

II. BACKGROUND

This Court is asked to review the reasonableness of agency action, including decisions involving statutory interpretation of both the IGRA and the SNSA. Therefore, a recitation of the legal and factual background of this case is helpful in understanding the issues presented in the pending dispositive motions, particularly with respect to certain statutory terms such as "Indian lands," "restricted fee," "governmental power," "tribal-state compact," "gaming ordinance," and "land claim." Some of these same terms also are central to consideration of the SNI's motion for leave to file an amicus brief.

A. Legal Background

1. The Relevant Provisions of the IGRA

Congress enacted the IGRA in 1988 to establish a comprehensive statutory scheme governing gambling on Indian lands. 25 U.S.C. §§ 2701-2721. The IGRA "seeks to balance the competing sovereign interests of the federal government, state governments and Indian tribes, by giving each a role in the regulatory scheme." Artichoke Joe's v. Norton, 216 F. Supp. 2d 1084, 1092 (E.D. Cal. 2002), aff'd, 353 F.3d 712 (9th Cir. 2003), cert. denied, 543 U.S. 815, 125 S.Ct. 51, 160 L.Ed. 2d 20 (2004).

The IGRA provides for three classes of gaming, each of which is subject to a different level of regulation. 25 U.S.C. § 2710. Class I gaming is not subject to any type of regulation and includes "social games solely for prizes of minimal value or traditional forms of Indian gaming [associated] with tribal ceremonies or celebrations." Id. § 2703(6), 2710(a)(1) (alteration added).

Class II gaming includes bingo, pull-tabs, punch boards and other similar games, as well as card games not prohibited by state law. Id. § 2703(7)(A). Class II games are authorized if conducted under a gaming ordinance approved by the NIGC Chairman and located in a state that permits such gaming for any purpose by any entity. Id. § 2710(a)(2), (b)(1)(A) and (B). The Federal government regulates, monitors and audits class II gaming. Id. § 2706.

Class III gaming, the category at issue in this case, is the "most heavily regulated and most controversial form of gambling" under the IGRA. Artichoke Joe's Cal. Grand Casino v. Norton, 353 F.3d 712, 715 (9th Cir. 2003). It is comprised of all forms of gaming not in classes I or II, including slot machines, games such as baccarat, blackjack, roulette, and craps, and sport betting, parimutuel wagering and lotteries. Id. § 2703(8) and (7)(B); 25 C.F.R. § 502.4. Class III gaming is lawful only if: (1) the governing body of the tribe having jurisdiction over the "Indian land" on which gaming is to take place authorizes class III gaming by adopting an "ordinance" or resolution that is then approved by the NIGC Chairman; (2) the gaming is located in a state that permits such gaming; and (3) the gaming is conducted in conformance with a "tribal-state compact" that regulates such gaming. Id. § 2710(d)(1).

a. Indian Lands

The consistent and overarching requirement common to each class of gaming is that it be sited on Indian land within the tribe's jurisdiction. Id. § 2710(a)(1), (b)(1), (d)(1)(A)(i) and (d)(2)(A). For purposes of the IGRA, "Indian lands" include:

(A) all lands within the limit of any Indian reservation; and

(B) any lands title to which is either held in trust by the United States for the benefit of any Indian tribe or individual or held by any Indian tribe or individual subject to restriction by the United States against alienation and over which an Indian tribe exercises governmental power.

Id. § 2703(4) (emphasis supplied). The land in the City of Buffalo at issue in this case was purchased by the SNI in 2005 and is held in "restricted fee"-i.e., it is subject to restriction by the United States against alienation. The parties disagree as to whether the SNI can exercise governmental power over that land.

Another IGRA provision at issue here, § 2719, expressly prohibits gaming on land "acquired by the Secretary in trust for the benefit of an Indian tribe after October 17, 1988" unless a defined statutory exception applies.*fn3 Included among the exceptions are when:

(A) the Secretary, after consultation with the Indian tribe and appropriate State, and local officials, including officials of other nearby Indian tribes, determines that a gaming establishment on newly acquired lands would be in the best interest of the Indian tribe and its members, and would not be detrimental to the surrounding community, but only if the Governor of the State in which the gaming activity is to be conducted concurs in the Secretary's determination; or

(B) lands are taken into trust as part of-

(i) a settlement of a land claim,

Id. § 2719(b)(1) (emphasis supplied). The applicability of the "settlement of a land claim" exception to land acquired in Buffalo after October 17, 1988, is in dispute here.

b. Tribal-State Gaming Compacts

An Indian tribe wishing to conduct class III gaming must first request that the state in which its lands are located engage in negotiations for a tribal-state compact to govern the conduct of gaming activities. Id. § 2710(d)(3)(A). Compacts may include provisions relating to regulatory and jurisdictional issues, state assessments on gaming activities, taxation by the Indian tribe, other subjects relating to the operation of gaming activities, and remedies for breach of contract. Id. § 2710(d)(3)(C).

If an agreement is reached, the compact is submitted to the Secretary of the Interior, who may approve, disapprove or take no action on it. Id. § 2710(d)(8). "If the Secretary does not approve or disapprove a compact [within] 45 days after the date on which the compact is submitted to the Secretary for approval, the compact shall be considered to have been approved by the Secretary, but only to the extent the compact is consistent with [the IGRA]." Id. § 2710(d)(8)(C).

Consistent with the foregoing provision, the Secretary is permitted to disapprove a compact only if it violates IGRA, any other provision of federal law, or the United States' trust obligations to Indians. Id. § 2710(d)(8)(B). A compact that is either affirmatively approved or considered approved by virtue of the Secretary's non-action takes effect when notice of the approval is published in the Federal Register. Id. § 2710(d)(3)(B).

c. Tribal Gaming Ordinances

An Indian tribe wishing to conduct class III gaming must also, through its governing body, adopt an ordinance or resolution authorizing class III gaming. That ordinance or resolution must be submitted to the NIGC Chairman along with, among other things, a copy of the tribal-state compact for class III gaming. Id. § 2710(2)(A); 25 C.F.R. § 522.2. The Chairman is required, no later than 90 days after the ordinance or resolution is submitted, to approve a submission that: 1) proposes class III gaming on Indian lands of the Indian tribe, and 2) meets the articulated statutory requirements, unless the Chairman determines that the ordinance was not adopted in compliance with the tribe's governing documents, or that the tribal governing body was significantly and unduly influenced in its adoption. 25 U.S.C. § 2710(d)(2)(B) and (e). Thereafter, Class III gaming activity may commence upon publication of the ordinance or resolution and the Chairman's order of approval in the Federal Register, in conformance with the terms of a tribal-state compact that has been approved by the Secretary. Id. § 2710(d)(1)(C), (2)(B) and (C).

If the Chairman does not act on an ordinance or resolution within 90 days after its submission, it "shall be considered to have been approved by the Chairman, but only to the extent [it] is ...


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