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State v. Oneida Indian Nation of New York

August 7, 2007



The State and Governor of New York (collectively, "Plaintiffs"), filed this action in April, 1995 to enjoin Defendant, the Oneida Indian Nation of New York ("Defendant" or the "Nation"), from offering an electronic video game called Instant Multi Game ("IMG") at its Turning Stone Casino ("Turning Stone"). See Compl. (Dkt. No. 1); Amended Compl. (Dkt. No. 106). Presently before the Court are Plaintiffs' Motions for judgment on the pleadings (Dkt. No. 159) and to dismiss the amended counterclaim (Dkt. No. 161). Also before the Court is Plaintiffs' Appeal of a discovery order allowing the Nation to depose two former officials in the Pataki administration (Dkt. No. 143). For the following reasons, the Motions are denied and the Appeal is denied and dismissed.

I. Background

A. Factual Background

The Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 -2721 ("IGRA" or the "Act"), establishes a regulatory framework for Indian gaming. The Act establishes three categories of Indian gaming: Class I encompasses social games for prizes of minimal value or traditional forms of Indian gaming; Class II includes high-stakes bingo and certain card games; and Class III, which includes all other forms of gaming, including casino-type gaming, not already defined as Class I or Class II gaming. See 25 U.S.C. § 2703. Class III gaming activities are lawful on Indian lands if they are "conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State under paragraph (3) that is in effect." 25 U.S.C. § 2710(d)(1)(C). Under the Act, a state and an Indian tribe may enter into a compact governing gaming activities on Indian land; the compact only takes effect when notice of approval by the United States Secretary of the Interior is published in the Federal Register. 25 U.S.C. § 2710(d)(3)(B).

In April, 1993, the State of New York (the "State") and the Nation entered into a compact, pursuant to the IGRA, governing Class III gaming on the Nation's lands (the "Compact"). Amended Compl. (Dkt. No. 106) at ¶ 14. The Assistant Secretary for Indian Affairs approved the Compact, and the approval was published in the Federal Register on June 15, 1993. Id. The Compact provides that the Nation may conduct those games and activities set forth in Appendix A to the Compact. Id. at ¶ 16. The Compact also outlines procedures through which the Nation could seek to amend Appendix A and conduct additional games at Turning Stone. Id. at ¶ 18. To request additions to Appendix A, the Nation must "submit[] written specifications to the State." Id. The Compact defines "State" to mean "the State of New York, its authorized officials, agents, representatives or agencies acting in their official capacities." Id. at ¶ 15. The Compact specifies that the "State shall exercise its regulatory and oversight role under the Compact through its State Racing and Wagering Board" (the "Board"). Id. at ¶ 16. All notices and other communications required under the Compact were to be served on the Board's Chairman. Id. at ¶ 19.

On November 22, 1994, the Nation submitted a written request to the Board's Chairman seeking approval to add IMG to Appendix A. Id. at ¶ 23. A letter from the Board's Chairman, on November 23, 1994, informed the Nation that the Board had approved the amendment to Appendix A related to IMG. Id. at ¶ 24. After providing State officials with an opportunity to inspect IMG, the Nation began offering IMG at Turning Stone on March 10, 1995. Id. at ¶ 31. Also on March 10, 1995, Bradford J. Race, Jr., Secretary to then-newly-elected Governor George E. Pataki, sent a letter to the Nation asserting the State's position that IMG was not authorized under Appendix A. Id. at ¶ 33.

B. Plaintiffs' Claims

Plaintiffs' first claim alleges that the Nation's operation of IMG at Turning Stone violates the terms of the Compact because the State did not properly approve IMG's deployment. Id. at ¶¶ 40-42. Plaintiffs explain that all amendments to the Compact must be approved by the State and the State, acting through the Governor or his authorized representative, must issue such approvals. Id. at ¶ 37. According to Plaintiffs, on or about January, 1994, then-Governor Mario Cuomo transferred responsibility for negotiation of any amendments to existing State-Tribal compacts to the Director of the Office of Industry and Community Relations in the Department of Economic Development, who, at the time relevant to the present action, was Patrick E. Brown. Id. at ¶¶ 20, 38. Plaintiffs contend that by not obtaining approval for operating IMG from Brown or the Governor, the proposed amendment to add IMG has not been approved by the State and, accordingly, the Nation violated the Compact. Id. at ¶¶ 39-42.

Plaintiffs alternatively plead in their second claim for relief that even if the Board was authorized to approve an amendment to the Compact, that authority rested with the full three-member Board and could not be delegated to the Chairman or any individual employee of the Board. Id. at ¶¶ 44-45. Plaintiffs assert that the Nation knew or should have known that, despite the letter from the Board's Chairman, the entire Board never approved the amendment and thus, the Nation violated the terms of the Compact by operating IMG without the proper approval. Id. at ¶¶ 48-52.

C. Nation's Affirmative Defenses and Counterclaims

In its Answer to the Amended Complaint, the Nation asserts that the November 23, 1994 letter from the Board's Chairman properly approved the amendment to Appendix A adding IMG to the games approved for operation at Turning Stone under the Compact. Answer (Dkt. No. 151) at Section A, ¶¶ 18, 37, 53. The Nation specifically disputes Plaintiffs' allegations that: the Board lacked authority to approve the additions of new games; only the Governor or his designated representative could approve the additions of new games; Brown had authority to negotiate amendments to existing compacts or their appendices; and the Board's Chairman did not have authority to approve IMG. Id.

The Nation also asserts a number of affirmative defenses; those defenses not yet addressed by the Court are: (1) that the Board had actual or apparent authority to approve the addition to Appendix A; (2) Plaintiffs waived the claim they seek to assert and are estopped from asserting it; (3) Plaintiffs' claim is barred by the doctrine of laches; and (4) Plaintiffs did not negotiate in good faith, in violation of IGRA. Answer (Dkt. No. 151) at Section B, ¶¶ 4-8.

The Nation's Second Amended Counterclaim (the "Counterclaim") seeks a declaration that IMG and another game, identified as "Gaming Devices," have been added to Appendix A in accordance with the procedures established in the Compact. Counterclaim (Dkt. No. 151) at ¶ 1. In the alternative, the Nation seeks a declaration, and an award of relief pursuant to 25 U.S.C. § 2710(d)(7)(A)-(B), that the State has negotiated in bad faith with respect to requests to add these games and has refused to agree to them only because the Nation will not give the State a percentage interest in the games' revenue. Id.

II. Discussion

A. Motion for Judgment on the Pleadings

Plaintiffs argue in their Motion for judgment on the pleadings that a recent decision by the New York Court of Appeals, Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 N.Y.2d 801 (2003), striking down the State's 1993 tribal gaming compact with the St. Regis Mohawk Tribe ("Mohawk Tribe"), establishes that the Board does not have authority to allow new games under the Compact. Plntfs' Mem. in Support (Dkt. No. 159, Attach. 2) at 11. Plaintiffs claim that Saratoga County means that the Board cannot promulgate new regulations necessary to perform this task without legislative authorization. Id. In response, the Nation asserts that its pleadings adequately deny the claims made by Plaintiffs in their Amended Complaint. Nation's Mem. In Opp. (Dkt. No. 163, Attach. 1) at 11. The Nation also contends that Plaintiffs' Motion presents a claim distinct from the two claims advanced in the Amended Complaint, and that the Federal Rules of Civil Procedure do not allow judgment on claims that were not pleaded. Nation's Mem. In Opp. (Dkt. No. 163, Attach. 1) at 11.

1. Standard of Review

Federal Rule of Civil Procedure 12(c) permits any party to move for judgment on the pleadings after the pleadings are closed. FED. R. CIV. P. 12(c). The standard for granting a motion for judgment on the pleadings is the same as that under a motion for failure to state a claim: the Court must accept all allegations in the Amended Complaint as true and draw all inferences in favor of the non-moving party, in this case, the Nation. See Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123, 126 (2d Cir. 2001). However, when considering a Rule 12(c) motion, the Court does not need to accept legal conclusions or characterizations contained in the non-moving party's pleadings. Madonna v. United States, 878 F.2d 62, 65 (2d Cir. 1989). The Court cannot grant judgment on the pleadings if a material issue of fact remains in dispute. See B.F. Goodrich v. Betkoski, 99 F.3d 505, 530 (2d Cir. 1996).

2. The Court Will Consider the Claim Advanced in Plaintiffs' Moving Papers

The Federal Rules of Civil Procedure establish "extremely permissive" pleading standards. Wynder v. McMahon, 360 F.3d 73, 77 (2d Cir. 2004). Plaintiffs are only required to plead a short and plain statement of their claim that gives the Nation fair notice and the grounds upon which the claims rests. See FED. R. CIV. P. 8. This requirement does not require Plaintiffs to explicitly establish their legal theory, but simply plead their factual allegations. Wynder, 360 F.3d at 77 ("federal pleading is by statement of claim, not by legal theory") (internal quotation omitted).

In the Amended Complaint, Plaintiffs' basic claim is that the Nation's operation of IMG at Turning Stone violates the terms of the Compact because the Board did not have authority to approve IMG's deployment on the State's behalf. See Amended Compl. (Dkt. No. 106). Plaintiffs' allegation clearly establishes their claim that the Board could not approve an amendment to the Compact, and, therefore, provided the Nation with notice of the grounds on which its claim rests. In their moving papers, Plaintiffs now asserts that recent court decisions hold that the New York State Legislature never properly empowered the Board to amend tribal gaming compacts. See Plntfs' Mem. in Support (Dkt. No. 159, Attach. 2) at 11. This legal theory supports Plaintiffs' claim that the Board lacked the authority to approve the deployment of IMG, which is an argument in keeping with Plaintiffs' allegations and could have been anticipated by the Nation from the Complaint. However, the Amended Complaint does not plead a claim challenging the validity of the entire Compact, and the Court does not understand Plaintiffs to have moved for judgment on the basis of such a claim.

3. The Court Does Not Have Jurisdiction to Address Plaintiffs' Challenge in its ...

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