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Town of Verona v. Cuomo

United States District Court, Second Circuit

October 30, 2013

TOWN OF VERONA (Oneida County); TOWN OF VERNON (Oneida County); MICHAEL McDONOUGH; DANIEL DEAL; JAMES ANDERSON; and MELVIN PHILLIPS, Plaintiffs,
v.
HON. ANDREW CUOMO, as Governor of the State of New York; MADISON COUNTY; JOHN M. BECKER, as Chairman of the Board of Supervisors of Madison County; ONEIDA COUNTY; ANTHONY J. PICENTE, JR., as Oneida County Executive; the NEW YORK STATE GAMING COMMISSION; SHELDON SILVER, as Speaker of the New York State Assembly; DEAN SKELOS, as Co-Majority Leader of the New York State Senate; and JEFFREY KLEIN, as Co-Majority Leader of the New York State Senate, Defendants.

MEMORANDUM-DECISION and ORDER

LAWRENCE E. KAHN, District Judge.

I. INTRODUCTION

Plaintiffs the Town of Verona, the Town of Vernon (collectively, the "Government Plaintiffs"), Michael McDonough, Daniel Deal, James Anderson, and Melvin Phillips (collectively, the "Individual Plaintiffs") (together with the Government Plaintiffs, "Plaintiffs"), commenced this action in New York State Supreme Court, Albany County, against the New York State Gaming Commission, Oneida and Madison Counties, and several state and county officials (collectively, "Defendants"), challenging the legality of efforts to legalize and regulate casino gambling. Dkt. No. 1-1 ("Complaint"). Defendants removed the action from state court on September 6, 2013. Dkt. No. 1. Currently pending before the Court are Defendants' Motion to dismiss and Plaintiffs' Cross-Motion to remand. Dkt. Nos. 8 ("Motion to Dismiss"); 12 ("Motion to Remand"). For the following reasons, this action is remanded in its entirety.

II. BACKGROUND[1]

A. The New York State Constitution

The New York State Constitution bans most forms of gambling. N.Y. CONST. art. I, § 9; Compl. ¶ 7. The constitution can be amended if two successively elected legislatures approve the proposed amendment and the amendment is then approved by a statewide popular referendum. N.Y. CONST. art. XIX, § 1; Compl. ¶ 6. In 2012, at the behest of Defendant Governor Andrew Cuomo ("Governor Cuomo"), both houses of the New York State Legislature (the "Legislature") passed a resolution containing a proposed constitutional amendment that would "authorize casino gambling as regulated by the state." Dkt. No. 1-1, Ex. A; Compl. ¶ 7. The resolution passed again at the end of the 2013 legislative session, and a popular referendum seeking approval of the amendment will be on the November 2013 general-election ballot. Compl. ¶ 26.

B. The Oneida Indian Nation and the Turning Stone Casino

Among the groups that initially voiced opposition to the campaign for state-regulated casinos was the Oneida Indian Nation (the "OIN"), which operates the Turning Stone Casino, a major gambling casino in the Town of Verona in Oneida County. Compl. ¶¶ 8-9. The Federal Indian Gaming Regulatory Act ("IGRA") preempts New York's constitutional ban on casino gambling and allows gaming to be conducted on Indian lands pursuant to a tribal-state compact. 25 U.S.C. §§ 2701-2721; Dalton v. Pataki , 835 N.E.2d 1180 (N.Y. 2005); Compl. ¶ 9. Relying on IGRA, the OIN has operated Turning Stone Casino pursuant to a 1993 compact reached between the OIN and then-Governor Mario Cuomo ("1993 Compact"). Compl. ¶¶ 8-11. The OIN currently enjoys a geographic monopoly on casino gambling in Central New York. Compl. ¶ 9.

In 2005, the United States Supreme Court ruled that the OIN's repurchase of traditional tribal lands did not restore tribal sovereignty, thereby casting doubt on the legality of the Turning Stone Casino under IGRA. Oneida Indian Nation v. City of Sherill , 544 U.S. 197 (2005); Compl. ¶¶ 12-13. As a result, the OIN applied to the U.S. Secretary of the Interior and the Bureau of Indian Affairs to place land it owns in Oneida and Madison Counties, including the Turning Stone Casino location, into trust for the benefit of the OIN. Compl. ¶¶ 13-14; see 25 U.S.C. § 465. After the Secretary of the Interior approved the OIN's application in part in May 2008, New York State, Madison and Oneida Counties, and the Towns of Verona and Vernon challenged that determination in federal court. Compl. ¶ 16; see New York v. Salazar, No. 08-CV-0644 (N.D.N.Y. filed June 19, 2008); Town of Verona v. Salazar, No. 08-CV-0647 (N.D.N.Y. filed June 19, 2008).

C. The Settlement Agreement

As part of the campaign to neutralize opposition to the legalization of non-Indian casinos, Governor Cuomo initiated negotiations with the OIN in 2013. Compl. ¶ 19. On May 16, 2013, the OIN and Governor Cuomo signed an agreement settling outstanding disputes between New York State, Madison and Oneida Counties, and the OIN. Dkt. No. 1-1, Ex. F ("Agreement"); Compl. ¶ 20. The Agreement contains a number of concessions by the State and the Counties:

• The State agreed to guarantee the OIN's geographic monopoly on casino gambling within a 10-county region in Central New York. Agreement § IV(A); Compl. ¶ 21.
• The State and Counties agreed to withdraw their federal court action challenging the Secretary's decision to take 13, 000 acres of OIN land into trust. Agreement § VI(A)(1)(a); Compl. ¶ 21.
• The Counties agreed to withdraw tax foreclosure proceedings commenced against land owned by the Oneidas that was in tax-delinquent status. Agreement §§ VI(A)(2)-(3); Compl. ¶ 21.
• The State agreed that the Legislature would ratify the 1993 Compact. Agreement § IV(C); Compl. ¶ 21.
• The State agreed that the Legislature would enact legislation incorporating the Agreement. ...

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