Recent Decisions of Importance to California Tribes
Tribal Taxation Cases
Winnebago Tribe of Nebraska v. Kline, Kansas Supreme Court, No. 94, 781
Plaintiffs brought the question of whether the Kansas motor-fuel tax law imposes a fuel tax collection or payment responsibility upon nonresident tribal corporation, Ho-Chunk Inc., a corporation established by the Winnebago Tribe, that imports fuel from outside Kansas and delivers the fuel to gas stations on Indian reservations within the state of Kansas without any physical place of business or physical storage in Kansas.
The court held that the tribe was not a distributor but an importer and did not have to pay the tax as the importer – instead the retail gas stations, the distributors of the gas, are responsible for paying the tax.
The Kansas motor-fuel tax law, K.S.A. 79-3401 et seq., imposes a tax per gallon on the use, sale or delivery of all motor vehicle fuels or special fuels which are used, sold or delivered in this state for any purpose whatsoever." K.S.A. 2005 Supp. 79-3408(a). "Unless otherwise specified in the Statute, the incidence of this tax is imposed on the distributor of the first receipt of the motor fuel and such taxes shall be paid but once."
The defendant, Kansas Department of Revenue, previously ruled that the state fuel tax at issue is imposed on a distributor when such fuel is first received in the State of Kansas at its business and in this case when the Winnebago trucks crossed into Kansas and they “received” the gas into the state.
The Court, using both legislative history and plain language interpretation of the statute, reasoned that the Winnebago Tribe cannot fall under the statue because the fuel never comes to rest or storage in Kansas, at the point of crossing the state line there is no transfer of possession of the fuel, the statue specifically and plainly excludes persons who import motor fuel into the state by truck, and even KDR acknowledged in its licensing process that HCI was an importer and not a distributor.
Therefore, the Court concluded that HCI is not a distributor and it did not receive the motor fuel in Kansas, thus should not be taxed for the gas.
Wagnon (formerly Richards) v. PBP (Prairie Band Potawatomi Nation) Nation (04-631)
On December 6, 2005, the United States Supreme Court issued a negative decision in Wagnon v. Prairie Band Potawatomi Nation. In the underlying case the Tenth Circuit had held that state taxation of motor fuel is not allowed where the Tribe charges a tax equal to the state tax and builds and maintains the roads on its reservation. The Tenth Circuit found that the Prairie Band is not “marketing a tax exemption” but instead the tax revenues from the gas station are “reservation generated value.”
In the majority opinion (7-2) written by Justice Thomas, the Supreme Court reversed the Tenth Circuit ruling and held that because the Kansas tax is a non-discriminatory tax imposed on the motor fuel received by a non-Indian fuel distributor off the reservation, the tax does not implicate tribal sovereignty and is a valid tax. Justice Thomas began his analysis by noting that “under our Indian tax immunity cases, the ‘who’ and the ‘where’ of the challenged tax have significant consequences.” The decision upheld the Kansas tax because the state law places the duty to pay the tax on the fuel distributor, a non-Indian located off-reservation, and because the tax was imposed on the distributor’s receipt of fuel off the reservation.
The Court rejected the argument that it should apply the White Mountain v. Bracker balancing test, because it found that the tax was a purely off-reservation tax that does not implicate tribal sovereignty. The Court also rejected the argument that the tax was discriminatory because fuel delivered to other sovereigns (including States and foreign countries) was exempt from taxation, concluding that Kansas provides roads services to the Nation that it does not provide to those other sovereigns.
The impact of this decision is likely to be limited to motor fuel and tobacco taxes because they are generally taxed early in the distribution chain, rather than at the point of sale. Many tribes and states have entered into tax agreements or other arrangements on these taxes, so the effects may not be widely felt outside Kansas. However, there is the possibility that some states will read the decision as new authority to impose taxes on reservations.
Dark-Eyes v. Conn. Commissioner of Revenue Services (05-1464)
On October 2, 2006, the Supreme Court denied review of a case involving taxation on private settlement lands owned by a tribe. Dark Eyes is an enrolled member of the Mashantucket Pequot Indian Tribal Nation, and earned her income from the Tribe as a tribal council member. Dark Eyes did not pay her state income taxes from 1996-1998 and claimed an exemption because she lived in Indian Country. She argued that the Pequot Indian Tribal Nation was authorized to acquire land under the Private Settlement Lands Act of 1983 within a designated 800 acres with settlement funds. This Act allowed the tribe to purchase the land that Dark Eyes lived on from willing land owners and then file for lands to be held in trust. However, the land that Dark Eyes lived on was not purchased by settlement funds but was purchased by the tribe with non-settlement funds. The lower court held that she could not claim an exemption from state taxation for certain years because the settlement lands were not Indian Country until the trust application was completed in Aug, 1998.
Labor Relations
Solis v. Matheson
On April 20, 2009, the 9th Circuit Court of Appeals ruled that overtime provisions of the Fair Labor Standards Act (“FLSA”) apply to a retail cigarette business, owned by a Tribal member and located on trust land within an Indian reservation.
The 9th Circuit rejected the Puyallup tribal business owner’s argument that FLSA is inapplicable under the intramural affairs and treaty rights exemptions set forth in Donovan v. Coeur d’Alene, 751 F.2d 1113.1116 (9th Cir. 1985). The Tribal self-government exception is designed to except intramural matters such as conditions of tribal membership, inheritance rules, and domestic relations from the general rule that otherwise applicable to federal statutes apply to Indian tribes. The tribe in Coeur d’Alene argued that under their rights to self-government and to exclude non-Indians, they could exclude the Occupational Safety and Health Act (“OSHA”) inspectors as part of their fundamental right of tribal sovereignty.
Similarly, in the Solis case, owner Paul Matheson disputed the government’s jurisdiction, citing the Indian nature of his business. Matheson argued that the Treaty of Medicine Creek addressed employment rights and payment of overtime because the “tribes and bands agree to free all slaves now held by them, and not to purchase or acquire others hereafter.” Furthermore, Matheson argued that Indian tribes are not mentioned in the FLSA.
The 9th Circuit acknowledged that Congress did not expressly make the FLSA applicable to Indian tribes, and explained that Indian tribes are subject to federal statutes of general applicability that are silent as to applicability to Indians, unless the statute implicates one of the three Donovan exceptions: (1) the law touches exclusive rights of self-governance in purely intramural matters; (2) the application of the law to a tribe would abrogate rights guaranteed by Indian treaties; or (3) there is legislative history or some other proof that Congress intended the law to be inapplicable to Indians on their reservations. The Court explained that Indians and Indian tribes “are equally subject to statutes of general applicability, just as any other United States citizen.” The court further explained that, the retail cigarette business, Baby Zack’s Smoke Shop, “is purely a commercial enterprise engaged in interstate commerce selling out-of-state goods to non-Indians and employing non-Indians.” The Court added, “Here, there is nothing in the Medicine Creek Treaty directly on point discussing employment or wages and hours.”
Having rejected the argument that the FLSA was inapplicable to the Puyallup cigarette retailer based on the intramural and treaty rights exceptions, the Court in the Solis case held the FLSA applicable to the business and found that the business owed $31,354.87 in overtime wages to current and former employees.
Perhaps of even more consequence to Indian country, the 9th Circuit further ruled that the Secretary has the authority to enter lands and buildings on a reservation that is not subject to a Donovan exception, in order to inspect a tribal enterprise’s books and records and thereby enforce the FLSA.
San Manuel v. NLRB (DC Circuit)
On September 30, 2005, the National Labor Relations Board (NLRB) issued a decision finalizing its earlier May 2004 ruling that held that the National Labor Relations Act (NLRA) applies to tribal businesses on tribal lands. The NLRA generally exempts governmental employers from the provisions of the NLRA on collective bargaining. The Board departed from longstanding precedent and created a new doctrine not found in the statute -- that tribal government "commercial" activities are subject to the NLRA, while "traditional" governmental activities are not.
The San Manuel Band of Mission Indians filed a petition for review in the U.S. Court of Appeals for the D.C. Circuit on October 6, 2005. On February 9, 2007 the Court issued their ruling upholding the NLRB decision. The Court held that the NLRB may apply the NLRA to employment at the San Manuel casino. On appeal two issues existed: 1) whether the Tribe's gaming activity was an essential government function and if NLRA regulation conflicted with tribal sovereignty, and 2) whether the term "employer" in the NLRA encompasses Indian tribal governments operating commercial enterprises.
First, the Court held that when tribes conduct commercial activities such as gaming, they do so subject to the NLRA, as long as such application would not interfere with reservation self-government or impair rights granted or reserved by federal law. San Manuel argued that the term "employer" in the NLRA encompasses Indian tribal governments operating commercial enterprises, but that they fall under an exemption for public subdivisions. The Court held that there is no congressional intent to indicate whether or not Congress meant to specifically include tribes in the catergorical exemption. The Court applied "Chevron" deference to the NLRB's application of employer in the NLRA and said tribal governments are not exempt because it is reasonable to conclude that Congress intended them to be included.
On June 13, 2007, the D.C. Circuit Court of Appeals denied San Manuel's petition to reconsider the case. The Tribe has not yet announced whether or not they will take their case to the Supreme Court.
Campaign Contribution/Tribal Sovereign Immunity
Cook v. Avi Casino Enterprises (“ACE”), 548 F.3d 718 (9th Cir. 2008)
At the end of 2008, the 9th Circuit issued its opinion in a potentially significant case involving sovereign immunity. A patron of Avi Casino, operated by the Fort Mojave Indian Tribe in Nevada, brought a dramshop and negligence action against ACE, the Tribally-owned corporation that operates the casino and its employees. The 9th Circuit upheld the district court’s finding of diversity jurisdiction on the basis that the plaintiff was a California resident and ACE was a Nevada citizen because its principle place of business, the casino, was there (the court rejected the district court’s finding that ACE was also a California citizen because it was incorporated under tribal law and the Tribe;s seat of government is in California). But the court dismissed the case for lack of subject matter jurisdiction, holding that ACE enjoyed the Tribe’s immunity from suit because it, like the casino, functions as an arm of the Tribe. Moreover, the individual ACE employees shared in theis immunity because they were sued in their official capacity, and the court, citing 9th Circuit law extending federal sovereign immunity to federal employees, held that tribal employees acting in their official capacity enjoy sovereign immunity.
Petition for certiorari in Cook v. Avi Casino Enterprises was filed on January 22, 2009, and is an appeal from the 9th Circuit. The 9th Circuit held that the federal courts had jurisdiction over ACE because there was a diversity of citizenship. However, it affirmed the district court’s dismissal because of tribal sovereign immunity and affirmed the dismissal of individual defendants. The questions presented by Cook are: (1) Does the tribal sovereign immunity doctrine bar a dram-shop lawsuit against the tribal corporation and its employee?; (2) Did Arizona courts erroneously hold that there was no general personal jurisdiction?; and, (3) Did Arizona courts erroneously hold that there was no specific personal jurisdiction?
United States v. Lowry, 512 F.3d 1194 (9th Cir. 2008)
In a case involving individual aboriginal title, and who bears the burden of demonstrating it exists when it is asserted as an affirmative defense in a criminal action, the 9th Circuit Court of Appeals in United States v. Lowry, upheld the district court’s conviction of a Karuk woman who was living on her family’s ancestral land within what in now the Klamath National Forest. Whereas the district court found that the government had to prove that aboriginal title did not exist in order to convict a defendant for unauthorized occupation of National Forest land, the 9th Circuit held that an occupant claiming individual aboriginal title bears the burden of demonstrating this title as an affirmative defense.
Ameriloan v. Superior Court, 169 Cal.App.4th 81 (2d Dist. 2009)
Sovereign immunity was also an issue in California state law cases. In Ameriloan v. Superior Court, a case involving the California Department of Corporations’ action to enforce various provisions of California’s Deferred Deposit Transaction Law against payday loan operation owned by the Miami Tribe in Oklahoma. The three companies were trade names used by the Miami Nation Enterprise, an economic subdivision of the Tribe, in the case advance business in California; they offered short-term loans to California residents over the internet. The appeals court held that the trial court erred in concluding that tribal sovereign immunity did not apply to off-reservation activity, and in ruling that to uphold tribal sovereign immunity would intrude on California’s exercise of its reserved powers under the 10th Amendment. The appeals court also rejected the State agency’s arguments that a waiver existed by virtue of the “sue or be sued” clause in the tribal resolution establishing Miami Nation Enterprise, or by virtue of the arbitration provision contained in each of the payday loan companies’ loan agreements with consumers. The court found that a factual issue existed as to whether companies were acting on behalf of the Miami Tribe, and the case was remanded for a determination of whether the companies operate as “arms of the tribe” for purposes tribal sovereign immunity.
Agua Caliente Band of Cahuilla Indians v. Superior Court (S123832)
The California Supreme Court has allowed the state's Fair Political Practices Commission to sue tribes in state court for violating state election campaign reporting laws. This decision is contrary to federal law guaranteeing tribes immunity from lawsuits without their consent, as well as language in the U.S. Constitution committing Indian affairs to the federal government, not the states.
The underlying lawsuit brought by the Fair Political Practices Commission two years ago (“FPPC”) alleged that the Agua Caliente tribe was late in disclosing more than $8 million in donations to candidates and causes between 1998 and 2002 in violation of the 1974 Political Reform Act (“PRA”). The lawsuit claimed that by filing required campaign reports late, the tribe deprived voters information to make informed decisions about candidates and propositions. Under the PRA, the commission can impose a fine for the amount improperly reported.
The Fair Political Practices Commission brought suit against Agua Caliente for failing to comply with disclosure rules. The Tribe maintained that as a sovereign government, it is immune from most state intervention, including lawsuits to enforce state laws. The Tribe argued that only Congress or the tribe itself can waive tribal sovereign immunity and subject the tribe to state lawsuits or laws.
The 3rd District Court of Appeal in Sacramento disagreed, ruling 2-1 that "the constitutional right of the state to sue to preserve its republican form of government trumps the common law doctrine of tribal immunity." Agua Caliente appealed the 3rd District Court of Appeal’s ruling to the State Supreme Court. The tribe asserted it could not be sued to comply with disclosure rules because it was immune from suit by the FPPC.
The Supreme Court ruled 4-3 that Indian tribes are bound by campaign-finance disclosure rules. The justices upheld the lower court decision that said tribes were subject to campaign-finance enforcement lawsuits from the FPPC, the state agency that oversees elections. Justice Ming Chin said the majority reached its decision based on the "significant importance of the state's ability to provide a transparent election process with rules that apply equally to all parties who enter the electoral fray."
The three-justice minority said it was up to Congress or the tribes themselves to authorize such enforcement actions against an Indian tribe. Justice Carlos Moreno noted the U.S. Supreme Court has said Oklahoma could not sue tribes in that state over the collection of cigarette taxes, and said the California Legislature should petition Congress to allow campaign disclosure enforcement actions.
Impact of the Decision on California Tribes
The impact of the decision is uncertain until the judgment is made final. On January 5, 2007, the Agua Caliente Tribe filed a petition for rehearing on the 4-3 ruling. The Court has until January 22 to act on the petition, or it will be deemed denied. Even if the Court denies the Tribe’s petition, this step is necessary in order for the Tribe to appeal the final decision to the United States Supreme Court.
If rehearing is granted, then the case is taken up again by the Court. If rehearing is denied, then Agua Caliente must decide whether to appeal the decision to the United States Supreme Court or let the decision stand.
Sacred Site Protection/NEPA
Navajo Nation, et. al v. U.S. Forest Service, et. al
On June 8, 2009, the U.S. Supreme Court justices, without comment, declined to accept the Navajo Nation v. U.S. Forest Service case, which the Tribe supported in the NARF Amicus Brief.
In 2006, the Navajo Nation, the Hopi Tribe, the White Mountain Apache Tribe, the Yavapai-Apache Tribe, the Havasupai Tribe, the Hualapai Tribe, and others filed a petition with the 9th Circuit U.S. Court of Appeals regarding its recent district court decision which held that the U.S. Forest Service’s approval of a permit allowing the spraying of recycled sewage water (in the form of artificial snow) for a ski resort on the San Francisco Peaks, a sacred site for many tribes, does not violate the Religious Freedom Restoration Act. In 2008, the 9th Circuit upheld the district court’s decision. In a vote of 8-3, the dissenting judges said the majority had effectively excluded American Indians from the Religious Freedom Restoration Act. The majority said the tribes failed to show how their rights are being violated under the Religious Freedom Restoration Act.
After being turned away from the U.S. Supreme Court, the tribes are now trying to figure out what their next step will be in protecting the sacred San Francisco Peaks of Arizona. The tribes may ask Congress to amend the Religious Freedom Restoration Act to protect their rights or ask President Obama to intervene with this issue.
Quechan Indian Tribe v. United States, 535 F. Supp. 2d 1072 (S.D. Cal. 2008)
The Quechan Indian Tribe v. United States is a tort action brought by the Quechan Indian Tribe against federal government agencies that caused damages to tribal cultural sites on reservation lands owed in fee by the United States as a right-of-way for an electric transmission line. The court held that, because the U.S. owned the lands in fee, Quechan tribal law gave the Tribe no proprietary interest in cultural resources located on non-Tribal fee land within the exterior reservation boundaries. But the court also held that the U.S.’s fee ownership of the land was not fatal to the Tribe’s negligence claims – since negligence claims do not depend on land ownership – and it allowed the Tribe’s claims to go forward finding that the Western Area Power Administration breached a duty to the Tribe under California not to damage cultural sites, and that the agency’s actions caused severe and irreparable harm to a cultural site as required in a claim of negligence per se in California law. The court further found that the agency’s activities negatively impacted sites outside of the federal government’s right-of-way, and it allowed the Tribe’s California law claim for trespass to go forward as to sites on these non-right-of-way lands.
Pit River Tribe; Native Coalition for Medicine Lake Highlands Defense; Mount Shasta Bioregional Ecology Center, Plaintiffs-Appellants v. United States Forest Service; Advisory Council on Historic Preservation; United States Bureau of Land Management; CalPine Corporation, Defendants-Appellees (CV-02-01314-DFL)
The Pit River Tribe, the Native Coalition for Medicine Lake Highlands Defense and the Mount Shasa Bioregional Ecology Center (collectively “Pit River”) appealed from the district court’s summary judgment on their claims against the BLM, the United States Forest Service and the Department of Interior. Pit River alleged that the procedures followed by the agencies in extending certain leases in the Medicine Lake Highlands and the subsequent approval of a geothermal plant to be built there, violated the National Environmental Protection Act (NEPA), the National Historic Preservation Act (NHPA), the National Forest Management Act (NFMA), and the Administrative Procedures Act (APA). Pit River also contended that the agencies violated their fiduciary duty to the Tribe in making a final decision on the lease extension.
The 9th Circuit Court of Appeal agreed with the Tribe in finding that the agencies did not take a “hard look” at the environmental consequences of the 1998 lease extensions and never adequately considered a “no action” alternative in light of the fact that Medicine Lake and the surrounding highlands are considered sacred sites among the Pit River people and neighboring tribes. The agencies filed a motion for rehearing by the 9th Circuit in February, but the Court denied the motion on April 18.
Tribal Jurisdiction
Elliot v. White Mountain Apache Tribe
On May 14, 2009, the 9th Circuit Court of Appeals ruled that a non-Indian woman who was charged by the White Mountain Apache Tribe (the “Tribe”) for contributing to the largest fire in Arizona must exhaust her remedies in tribal court.
Valina Jo Elliot was lost on the Fort Apache Reservation when she started a signal fire which grew into a forest fire (Chediski fire) that merged with a smaller fire (Rodeo fire), and was called the Rodeo-Chediski fire. The Rodeo-Chediski fire burned more than 400,000 acres of land and caused millions of dollars in damage.
The Tribe charged Elliot with violating tribal laws and regulations, and sought civil penalties and an order of restitution. Elliot sought to have the case dismissed, arguing that, as a non-Indian, the Tribe lacked jurisdiction over her.
While the 9th Circuit acknowledged that tribal jurisdiction over non-Indians is “limited,” the Court explained that Elliot has to give tribal courts a chance to decide her case on the merits before she can go to federal court because while “tribal court jurisdiction is plausible, principles of comity require [the Court] to give tribal courts a full opportunity to determine their own jurisdiction in the first instance.”
Plains Commerce Bank v. Long Family Land and Cattle Company, Inc.
This past summer, the Court decided Plains Commerce Bank v. Long Family Land and Cattle Company, Inc., holding that tribal courts do not have subject-matter jurisdiction to adjudicate civil tort claims as “other means” of regulating the conduct of nonmember bank owning fee-land on a reservation that entered into a private commercial agreement with a member-owned corporation, the majority of which is owned by tribal members, under the exceptions to the rule stated in Montana v. United States. The 8th Circuit had upheld the lower court’s determination that the Cheyenne River Sioux Tribal Court had jurisdiction over a discrimination claim brought by tribal members against a nonmember bank. While this case will undoubtedly provoke much scholarly attention, the Court’s holding appeared premised on the motion that the conduct in question did not involve tribal members, but instead was an action by tribal members to undo a transaction between a state-chartered bank and non-Indian purchasers of land.
Morris v. Tanner (05-1285)
In U.S. v. Lara, the U.S. Supreme Court upheld tribal criminal jurisdiction over nonmember Indians, holding that the “Duro” amendment is an affirmation of tribal inherent authority. However, the Lara Court expressly declined to answer the question of whether the tribal criminal prosecution of a nonmember Indian would violate the Due Process and Equal Protection clauses of the Fifth Amendment of the U.S. Constitution.
On October 1, 2006, a petition for certiorari was denied in Morris v. Tanner, which sought review of the Ninth Circuit’s unpublished memorandum opinion affirming summary judgment in favor of the Confederated Salish & Kootenai Tribes and its courts based on its published decision in Means v. Navajo Nation. In Means, the Ninth Circuit held that under the 1990 amendments to the Indian Civil Rights Act (the “Duro” amendments), the Navajo Nation may exercise misdemeanor criminal jurisdiction over a person who is not a member of the tribe, but who is an enrolled member of another Indian tribe. First, relying on Morton v. Mancari, the court concluded that “the weight of established law requires us to reject Means’s equal protection claim” on the basis that Indian tribal identity is political rather than racial. Second, the court found that Means’s “ due process challenge has no force” in light of the fact that the Indian Civil Rights Act confers all the protections Means would receive under the U.S. Constitution except the right to grand jury indictment (which is not available in a misdemeanor prosecution) and the right to appointed counsel (which is provided in the Navajo Bill of Rights).
Smith v. Salish Kootenai (05-10357)
On July 19, 2006, a petition for writ of certiorari was denied in Smith v. Salish Kootenai College which seeks review of a decision issued by the Ninth Circuit. The Ninth Circuit held that under the Montana test, the tribal court has civil jurisdiction over a tort action that arose as a result of a traffic accident on a public highway within the Reservation which involved a non-member Indian who was a student at the tribal college and who was driving the vehicle as part of a vocational program at the college.
Salinas v. Lamere (05-1189)
On May 22, 2006, the Supreme Court denied review of a decision by the California Court of Appeals which held that Public Law 280 does not grant state courts jurisdiction in civil suits that implicate an Indian tribe’s sovereignty. Former members of the Temecula Band of Luiseno Mission Indians of the Pechanga Reservation (Pechanga Band) had been seeking an injunction in state court to prevent them from being disenrolled from the Tribe.
Doe v. Mann (05-815)
On May 1, 2006, the Supreme Court denied review of the Ninth Circuit decision granting state jurisdiction over a child custody decision involving an Indian child within the boundaries of an Indian reservation in California. The Ninth Circuit opinion holds that under the Indian Child Welfare Act, tribes that fall under Public Law 280 do not have the “exclusive jurisdiction” provided by ICWA Section 1911(a).
Ford Motor Co. v. Todecheene (No. 02-17048)
On January 11, 2006, the Ninth Circuit issued its decision in a case involving the scope of tribal civil jurisdiction over a products liability action arising out of an accident on the Navajo Reservation on a road wholly owned by the Nation. The Todecheene family filed a wrongful death action in Navajo tribal court, and Ford filed a complaint in U.S. District Court challenging the Navajo court’s jurisdiction. In an expansion of Strate v. A-1 Contractors, the 9th Circuit ruled that the Montana analysis applies even when on Indian land and ruled against tribal jurisdiction. On February 10, 2006, the Navajo Nation filed a petition for rehearing or rehearing en banc. On February 15, 2006, the court issued an order directing Ford Motor Company to file a response to the petition for rehearing. The case has been fully briefed and awaits a decision from the Ninth Circuit on the petition for rehearing.
Land Into Trust
Carcieri v. Kempthorne
On February 25, 2008, the Supreme Court granted cert in Carcieri v. Kempthorne. The 1st Circuit sitting en banc affirmed the lower court’s determination that the Secretary of the Interior could take land into trust for the benefit of the Narragansett Indian Tribe of Rhode Island. The Court reviewed, at the State of Rhode Island’s request: (1) whether the 1934 Indian Reorganization Act (IRA) empowers the Secretary to take land into trust for Indian tribes that were not federally recognized and under federal jurisdiction in 1934; and (2) whether an act of Congress that extinguishes aboriginal title and all claims based on Indian rights and interests in land precludes the Secretary from creating Indian country there. The Supreme Court reversed. Without addressing the second question, the Court concluded that the IRA only authorizes the Secretary of the Interior to place land into trust for tribes that were under federal jurisdiction when the statute was enacted in 1934. This interpretation of “Indian tribe” rested upon the use of the word “now” in the definition of “Indian” contained in the IRA.
South Dakota, et al. v. Department of the Interior, et al. (05-1428)
On October 2, 2006, a petition for certiorari was denied in an appeal of an Eighth Circuit decision that upheld the Secretary of the Interior’s authority to take land into trust on behalf of Indians and Indian tribes. The Eighth Circuit held that 25 U.S.C. § 465 is not an unconstitutional delegation of legislative authority when viewed in the light of statutory goals and the legislative history of the Indian Reorganization Act.
Utah v. Shivwits Band of Paiute Indians (05-1160)
On October 2, 2006, the Supreme Court denied review of another decision that upheld the Secretary of the Interior’s authority to take land into trust on behalf of Indians and Indian tribes, pursuant to 25 U.S.C. § 465 (§ 5 of the Indian Reorganization Act). The lower court had rejected the state’s argument that § 5 is an unconstitutional delegation of the legislative power. At present, three Circuits have rejected this argument by various states.
Tribal Gaming
Cachil Dehe Band v. California
The Cachil DeHe Band of Wintun Indians of the Colusa Indian Community (“Colusa”) and the Picayune Rancheria of the Chukchansi Indians (“Picayune” and collectively “Plaintiffs”) filed suit against the State of California and the California Gambling Control Commission (“Defendants”).
Plaintiff Colusa and Plaintiff-Intervenor Picayune are federally recognized Indian tribes. Both Colusa and Picayune entered into Class III Gaming Compacts with the State of California in 1999. The Compact sets forth various provisions relating to the number of Class III Gaming Devices a Compact Tribe may operate and set the total number each individual tribe may operate at 2,000.
The Compact also set a State-wide maximum on the number of Gaming Devices that all Compact tribes may license in the aggregate. The Statewide maximum is determined by a formula set forth in the Compact. In this case, the Plaintiffs allege that the Commission breached its Gaming Compact with the State of California by miscalculating the total number of licenses in the Gaming Device license pool.
Colusa and Picayune argued that the Compact authorizes more licenses than the number determined by the Defendants. The parties disagreed on the interpretation of the equation in the Compact used to calculate the number of authorized Gaming Device licenses. The Court affirmed that “general principles of contract interpretation apply to Tribal-State compacts,” and concluded that the State-wide license pool authorizes 42,700 Gaming Devices, as Colusa and Picayune argued. The Court denied the Defendant’s motion for summary judgment on that issue.
Colusa alleged that under the Compact, a multi-station game is to be counted as a single Gaming Device. However, the Court denied Colusa’s motion for summary judgment and granted the defendants’ motion for judgment on the pleadings. The Court held that under the “unambiguous terms of the Compact, each terminal of a multi-terminal game is to be counted as a separate Gaming Device for licensing purposes.”
The parties agree that nothing in the Compact explicitly provides any party or entity with the authority to conduct the draw process. Colusa contended that because the Compact lacks any express provision conferring authority upon the State or the Commission to exercise exclusive control over the calculation or distribution of licenses, the Commission cannot vest itself with such authority. The Defendants argued that the provision of the Compact that expressly names the Commission as the Trustee of the Revenue Sharing Trust Fund (“RSTF”) implicitly grants the Commission the authority to administer the State-wide license pool. The Court held that the Commission’s appointment as the Trustee of the RSTF carries with it the authority to administer the draw process. The Court further held that because the Commission must have accurate information on the number of licenses issued and to whom in order to properly account for the money that should be deposited in the RTSF, they must assume responsibility over the distribution of the licenses and the accompanying collection of fees. The Court concluded that Colusa’s argument was without merit and held that the Commission did have the authority to administer the draw process.
Colusa also challenged its placement in the draw process to receive Gaming Device licenses. Colusa contended that under the tier system, it should have been allowed to stay in tier three until it had drawn 750 licenses from that tier. However, Defendants placed Colusa in the fifth tier before it had drawn 750 licenses. In the fifth tier, Colusa did not receive any of the licenses it requested. The Court held that the Defendant’s interpretation of the licensing system “does not serve the purposes set forth by other provisions in the Compact.” Instead, the Court determined that Colusa’s interpretation of how the tier system would work “creates a lawful, operative, definite, and reasonable implementation off the contract language.” The Court adopted Colusa’s interpretation. The Court denied the Defendants’ motion for judgment on the pleadings and granted Colusa’s motion for summary judgment regarding Colusa’s priority in the Gaming Device license draw process.
Rincon Band v. Schwarzenegger, Fed.Appx. 60, 2008 WL 3822538 (9th Cir. 2008)
In a case involving negotiations over compact amendments, the 9th Circuit upheld the district court’s finding that other tribes were not necessary parties to the Rincon Band’s claim for declaratory relief regarding California’s negotiating position in compact talks with the Tribe. Although the 9th Circuit held that the 11th Amendment barred the Tribe’s claim against the state for reliance damages, it upheld the district court’s finding that California had negotiated in bad faith on the issue of revenue sharing. The district court found that California had not offered meaningful concessions to Rincon in exchange for the fees that the Sate was asking from the Tribe, and it concluded that the fees demanded by California, both in amount and type, constituted an attempt to impose a tax violation of IGRA section 2710(d)(4).
Schwarzenegger v. Rincon Band of Luiseno Mission Indians
On February 11, 2009, petition for certiorari was filed in Schwarzenegger v. Rincon Band of Luiseno Mission Indians from the 9th Circuit. The Rincon Band brought this action against the California Governor (“the State”) seeking, inter alia, reliance damages, and a declaratory judgment regarding the aggregate maximum number of slot machine licenses available to Indian tribes in California who were parties to approximately 60 essentially identical Indian Gaming Compacts between those tribes and the State. The Court of Appeals held: (1) other tribes were not necessary parties to the claim for declaratory relief; and (2) the 11th Amendment barred a claim against the State of California for reliance damages.
Guidiville Band of Pomo Indians v. NGV Gaming, Ltd., 531 5.3d 767 (9th Cir. 2008)
In a dispute between two casino developers that was consolidated with a tribe’s suit against one of them, the 9th Circuit in Guidiville Band of Pomo Indians v. NGV Gaming, Ltd., held that 25 U.S.C. § 81 requires secretarial approval only for contracts that encumber lands already held in trust; thus, the contract at issue remained valid without secretarial approval because it implicated lands that were not yet in trust. NGV Gaming had sued Harrah’s Entertainment Inc., alleging that Harrah’s interfered with NGV’s contract with the Tribe, and Harrah’s and the Tribe argued that there was no interference because there was no valid contract between NGV and the Tribe. After the 9th Circuit allowed NGV’s suit to go forward on the basis that there was a valid contract and remanded the case, the district court, citing a possible circuit split following the 2nd Circuit’s decision in Catskill Development, LLC v. Park Place Entertainment Corp., 547 F.3d 115 (2d Cir. 2008), stayed the proceedings while Harrah’s petition to certiorari was pending. The Supreme Court denied the petition for certiorari on January 26, 2009.
Cachil Dehe Band of Wintun Indians v. California, 547 F.3d 962 (9th Cir. 2008)
This case involves a dispute between the Tribe and the State of California under the 1999 Tribal-State Gaming Compact. In Cachil Dehe Band of Wintun Indians v. California, the 9th Circuit affirmed the district court’s dismissal of the Tribe’s claim against California for failure to negotiate in good faith (a requirement adopted into California law by voter initiative, thus avoiding 11th Amendment sovereign immunity issues), holding that freedom from competition is not legally-protected interest for purposes of determining whether other tribes that signed the 1999 Compact were required parties under Federal Rule of Procedure 19 (a). But the 9th Circuit reversed the district court’s reversal of the Tribe’s other claims regarding California’s limit on the number of slot machine licenses, the Tribe’s placement in the draw for licenses, and the State’s formula and procedure for allocating licenses. These claims were remanded to the district court. On January 22, 2009, the State of California filed a petition for writ of certiorari to the Supreme Court. In a related action, the court in Cachil Band v. California, 2008 WL 205604 (E.D. Cal. 2008), found that because California law delegated the authority to negotiate gaming compacts with tribes to the Governor, a tribe seeking a declaration that the state was not negotiating in good faith over compact amendments must include the Governor as a named defendant (and the court granted the Tribe leave to amend its complaint to so include the Governor.
California v. Cachil Dehe Band of Wintun Indians of Colusa Indian Community
On January 22, 2009, petition for certiorari was filed in California v. Cachil Dehe Band of Wintun Indians of Colusa Indian Community from the 9th Circuit. The Tribe brought an action against the State, its Governor, and the California Gambling Control Commission (“CGCC”) for declaratory and injunctive relief challenging the CGCC’s interpretation of the compact and the Commission’s assumption of authority to administer unilaterally the licensing of electronic gaming devices. The district court dismissed the case because it concluded that the other tribes had signed identical gaming compacts, as well as non-gaming tribes, were required parties to the action and, because of tribal sovereign immunity, they could not be joined. The 9th Circuit reversed and remanded upon finding that the other tribes were not necessary parties.
San Pasqual Band of Mission Indians v. California, 295 Fed.Appx. 880, 2008 WL 4472608 (9th Cir. 2008)
Based on its decision in the Cachil Dehe Band case, the 9th Circuit in San Pasqual Band of Mission Indians v. California, reversed the district court’s dismissal of an action brought by San Pasqual seeking a judicial determination of the correct number of slot machine licenses authorized by the formula found in its gaming compact, which was materially identical to the 1999 Compact signed by over 60 other tribes. The district court had dismissed the Tribe’s complaint on grounds that San Pasqual failed to join these tribes, whom the court said were required parties because San Pasqual challenged the interpretation and application of a formula common to all their compacts.
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