Club One Casino, Inc. v. U.S. Dep't of the Interior
This text of 328 F. Supp. 3d 1033 (Club One Casino, Inc. v. U.S. Dep't of the Interior) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT
(Doc. 36)
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
(Doc. 37)
ORDER CLOSING THE CASE
Anthony W. Ishii, SENIOR DISTRICT JUDGE
*1036I. Introduction
Plaintiffs Club One Casino and The Deuce Lounge (collectively "Plaintiffs" or "Club One") bring the instant Administrative Procedures Act ("APA") challenge to the issuance of Secretarial Procedures by the United States Department of the Interior, the Secretary of the Interior, and the Assistant Secretary for Indian Affairs (collectively "DOI" or "Federal Defendants") permitting the North Fork Rancheria of Mono Indians ("North Fork") to conduct tribal gaming on a 305.49 acre parcel of land in Madera County, California (the "Madera Site"). Complaint, Doc. 1 ("Compl.") at ¶ 1. The substance of the APA challenge is directed at whether the Federal Defendants adequately considered whether North Fork had jurisdiction over the Madera Site for purposes of the Indian Gaming Regulatory Act ("IGRA"),
The parties have filed cross motions for summary judgment. Plaintiffs' argument is twofold. First they contend that "the Secretarial Procedures [offend the APA] because defendants ... never considered ... whether the North Fork Tribe actually possesses territorial jurisdiction over the proposed casino site." Doc. 36-1 at 12. The Federal Defendants respond that North Fork necessarily has jurisdiction over the proposed gaming site as a result of the fee-to-trust determination conducted pursuant to the Indian Reorganization Act ("IRA"), taking that land into trust for the Tribe. Second, Plaintiffs argue, assuming that the fee-to-trust determination does shift some jurisdiction from the state to the Tribe, the IRA violates of the Tenth Amendment.
For the following reasons, Plaintiffs' motion will be denied and the Federal Defendants' motion will be granted.
II. Background
Although the background surrounding the proposed gaming facility at the Madera Site is extensive, the Court limits this section to the information relevant to, or addressed in, Plaintiffs' challenge to the Secretary's issuance of Secretarial Procedures.
A. Plaintiffs - Club One Casino and The Deuce Lounge
Club One Casino and The Deuce Lounge are both cardrooms licensed by the State of California. Declaration of Kyle Kirkland, Doc. 36-3 ("Kirkland Decl.") at ¶¶ 2, 6. Club One operates in Fresno, California and is licensed by the City of Fresno. Id at ¶ 2. The Deuce Lounge is located in Goshen, California and licensed by the County of Tulare. Id . at ¶ 6. Both Club One and The Deuce Lounge are limited in the kinds *1037of games that they may offer. For instance, both operate poker, baccarat, and blackjack games but neither is permitted to operate slot machines or banking card games where the player bets against the house.
The Madera Site is roughly 25 miles from Club One and 65 miles from The Deuce Lounge. Kirkland Decl. at ¶¶ 3, 7. The Secretarial Procedures permit North Fork to operate slot machines and banking card games that Plaintiffs cannot operate. See Administrative Record ("AR") at AR00002202 (North Fork is permitted under the Secretarial Procedures to operate "Gaming Devices," i.e., slot machines, and "banking or percentage card games," among other things.) Both Club One and The Deuce Lounge contend that their businesses will suffer if North Fork is permitted to conduct Class III gaming at the Madera Site. Kirkland Decl. at ¶¶ 5, 9.
B. The North Fork Rancheria of Mono Indians
The North Fork is a federally recognized Indian tribe. AR00000241; see generally Stand Up for California! v. United States Department of the Interior ,
The United States also holds in trust for the Tribe a 61.5-acre tract of land " 'located on a steep hillside ... in ... North Fork.' " Stand Up for California! ,
C. The Madera Site Acquisition
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ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT
(Doc. 36)
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
(Doc. 37)
ORDER CLOSING THE CASE
Anthony W. Ishii, SENIOR DISTRICT JUDGE
*1036I. Introduction
Plaintiffs Club One Casino and The Deuce Lounge (collectively "Plaintiffs" or "Club One") bring the instant Administrative Procedures Act ("APA") challenge to the issuance of Secretarial Procedures by the United States Department of the Interior, the Secretary of the Interior, and the Assistant Secretary for Indian Affairs (collectively "DOI" or "Federal Defendants") permitting the North Fork Rancheria of Mono Indians ("North Fork") to conduct tribal gaming on a 305.49 acre parcel of land in Madera County, California (the "Madera Site"). Complaint, Doc. 1 ("Compl.") at ¶ 1. The substance of the APA challenge is directed at whether the Federal Defendants adequately considered whether North Fork had jurisdiction over the Madera Site for purposes of the Indian Gaming Regulatory Act ("IGRA"),
The parties have filed cross motions for summary judgment. Plaintiffs' argument is twofold. First they contend that "the Secretarial Procedures [offend the APA] because defendants ... never considered ... whether the North Fork Tribe actually possesses territorial jurisdiction over the proposed casino site." Doc. 36-1 at 12. The Federal Defendants respond that North Fork necessarily has jurisdiction over the proposed gaming site as a result of the fee-to-trust determination conducted pursuant to the Indian Reorganization Act ("IRA"), taking that land into trust for the Tribe. Second, Plaintiffs argue, assuming that the fee-to-trust determination does shift some jurisdiction from the state to the Tribe, the IRA violates of the Tenth Amendment.
For the following reasons, Plaintiffs' motion will be denied and the Federal Defendants' motion will be granted.
II. Background
Although the background surrounding the proposed gaming facility at the Madera Site is extensive, the Court limits this section to the information relevant to, or addressed in, Plaintiffs' challenge to the Secretary's issuance of Secretarial Procedures.
A. Plaintiffs - Club One Casino and The Deuce Lounge
Club One Casino and The Deuce Lounge are both cardrooms licensed by the State of California. Declaration of Kyle Kirkland, Doc. 36-3 ("Kirkland Decl.") at ¶¶ 2, 6. Club One operates in Fresno, California and is licensed by the City of Fresno. Id at ¶ 2. The Deuce Lounge is located in Goshen, California and licensed by the County of Tulare. Id . at ¶ 6. Both Club One and The Deuce Lounge are limited in the kinds *1037of games that they may offer. For instance, both operate poker, baccarat, and blackjack games but neither is permitted to operate slot machines or banking card games where the player bets against the house.
The Madera Site is roughly 25 miles from Club One and 65 miles from The Deuce Lounge. Kirkland Decl. at ¶¶ 3, 7. The Secretarial Procedures permit North Fork to operate slot machines and banking card games that Plaintiffs cannot operate. See Administrative Record ("AR") at AR00002202 (North Fork is permitted under the Secretarial Procedures to operate "Gaming Devices," i.e., slot machines, and "banking or percentage card games," among other things.) Both Club One and The Deuce Lounge contend that their businesses will suffer if North Fork is permitted to conduct Class III gaming at the Madera Site. Kirkland Decl. at ¶¶ 5, 9.
B. The North Fork Rancheria of Mono Indians
The North Fork is a federally recognized Indian tribe. AR00000241; see generally Stand Up for California! v. United States Department of the Interior ,
The United States also holds in trust for the Tribe a 61.5-acre tract of land " 'located on a steep hillside ... in ... North Fork.' " Stand Up for California! ,
C. The Madera Site Acquisition
The Madera Site is a 305.49-acre plot of land in Madera County, California, approximately *103815 miles north of the city limits of the City of Fresno on Avenue 17, just west of the intersection with State Route 99. AR00002299-00002300; Doc. 37-2 at 3. The Madera Site is about 38 miles from North Fork's Rancheria lands and about 36 miles from its 61.5 acre tract which is used for housing. AR00000245; Stand Up for California ,
In March of 2005, North Fork submitted an application to the Bureau of Indian Affairs ("BIA") to have the Madera Site taken into trust for the purpose of operating a Class III gaming facility ("fee-to-trust application"). Doc. 37-2 at 5; AR00000240. In the same month, North Fork also requested that the Secretary make the two-part after-acquired lands determination2 pursuant to
On November 26, 2012, the Assistant Secretary-Indian Affairs issued a Record of Decision approving the fee-to-trust application ("the IRA ROD"). Doc. 37-2 at 7; AR00000159-00000227. The Madera Site was acquired in trust by the United States for the benefit of North Fork in 2013. North Fork Rancheria of Mono Indians of California v. State of California ,
D. Tribal-State Compact Negotiation History
On August 31, 2012, the Governor concluded a compact with North Fork to conduct Class III gaming at the Madera Site. Doc. 37-2 at 7; AR00000320-00000438. That compact was concluded on the same date as the Governor's concurrence with the Secretary's two-part determination and before the IRA ROD issued or the land was taken into trust for North Fork. The Governor's office then forwarded the compact to the California Legislature for ratification. Doc. 37-2 at 7; North Fork v. California ,
Notice of the completed compact was published in the Federal Register on October 22, 2013, stating that the compact was "approved" and was taking effect to "the extent it was consistent with IGRA." 78 Fed.Reg. 62649-01 (Oct. 22, 2013). On November 20, 2013, the Secretary of State informed the Secretary of the Interior that a veto referendum on AR 277 qualified for the ballot ("Proposition 48") and that the measure would go before voters at the November 3, 2014 general election. AR00000455. Sixty one percent of California voters voted against the legislative ratification of the compact. Doc. 37-2 at 8.4
On January 2, 2015, North Fork requested that the State of California enter into negotiations for a new compact for Class III gaming on the Madera Site. Doc. 37-2 at 8-9; North Fork v. California ,
E. The Good Faith Litigation, the Remedial Process, and Issuance of Secretarial Procedures
On March 17, 2015, North Fork filed suit against California pursuant to
North Fork and California did not conclude a compact within the 60-day period allowed. Doc. 37-2 at 9. On January 25, 2016, the Court appointed a mediator and directed North Fork and California to submit their last best offers. Doc. 37-2 at 9; see
On July 29, 2016, the Secretary issued Secretarial Procedures permitting the Tribe to conduct Class III gaming without *1040a Tribal-State compact. AR00002186-00002325. In issuing those procedures, the Secretary did not make any express finding regarding whether North Fork had jurisdiction over the Madera Site or whether it was Indian land. Doc. 37-2 at 10; AR00002186-00002325.
The administrative record contains no evidence that any governmental entity had affirmatively concluded that North Fork had territorial jurisdiction over the Madera Site. Doc. 37-2 at 10-11. However, in resolving the cross-motions for judgment on the pleadings in North Fork v. California ,
F. North Fork Tribal Council Action With Respect to the Madera Site 6
On October 16, 2015, the North Fork Tribal Council passed Resolution No. 15-58 approving a general policy for permitting of Indian agricultural lands and a conservation plan for the Madera Site. Declaration of Steven Miskinis, Doc. 37-3 ("Miskinis Decl.") at 1-6.
G. This Court's Decision Denying Supplementation of the Administrative Record
Club One filed a motion, seeking to supplement the administrative record compiled by the Secretary. Doc. 22. Club One argued that consideration of the ownership history of the Madera Site is relevant to whether North Fork had jurisdiction over that land. Id. at 5-6, 8-10. Therefore, Club One argued, supplementation of the record was necessary to determine whether the Secretary had considered all factors relevant to the prescribing of Secretarial Procedures for Class III gaming. Id. at 5.
In order to determine whether to permit supplementation of the administrative record, it was "necessary [for the Court] to determine" what it means for "an Indian tribe [to] exercise jurisdiction over land" for purposes of IGRA. Doc. 33 at 6.7 To that end, the Court permitted the parties to submit supplemental briefing on that issue. Doc. 30 at 8. Mirroring their present positions, Club One argued that a State must cede jurisdiction over land to a tribe or the United States in order for a tribe to have jurisdiction over that land for purposes of IGRA; whereas, the Secretary argued that jurisdiction over land, for purposes of IGRA, is conferred to a tribe when the land is taken into trust by the United States for the benefit of that tribe.
The Court made the following limited determination:
When the Secretary takes land into trust for an Indian tribe, some but not all jurisdiction is transferred from the *1041State to the Indian tribe and the Federal Government. The fee-to-trust determination does not result in the Federal Government or an Indian tribe holding exclusive jurisdiction over the land.[fn] However, IGRA does not require a tribe to exercise exclusive jurisdiction over land.[fn].... [W]hen the Secretary ... takes land into trust for an Indian tribe, that Indian tribe certainly has jurisdiction over that land for purposes of IGRA.
Doc. 33 at 9-10. Because the parties were (and are) in agreement that the Madera Site was held in trust by the United States for North Fork at the time the Secretary prescribed gaming procedures (and Club One is not challenging the fee-to-trust determination), the Court found that the material relating to the ownership history of the Madera Site was irrelevant to the Secretarial determination in question here-the prescribing of gaming procedures.
III. Legal Standard
Summary judgment is an appropriate mechanism for reviewing agency decisions under the APA. Turtle Island Restoration Network v. United States Dept. of Commerce,
The Court's review in resolving an APA challenge to an agency action is circumscribed: the court will only set aside agency action if its " 'findings[ ] and conclusions [are] found to be ... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,' 'in excess of statutory jurisdiction' or 'without observance of procedure required by law." Turtle Island ,
*1042Morongo Band of Mission Indians v. Fed. Aviation Admin. ,
Assuming an error was made, the Court considers whether it was harmless.
IV. Discussion
Plaintiffs' motion indicates that it presents two issues: (1) whether the Secretary violated IGRA when he issued Secretarial Procedures "authorizing North Fork ... to operate a casino on off-reservation land that is still under state jurisdiction?";8 and (2) "[d]oes it violate the Tenth Amendment if the Federal Government unilaterally diminishes a state's territorial jurisdiction and shifts it to an Indian tribe?" Doc. 36-1 at 10. Plaintiffs present a third argument: (3) the Secretarial Procedures "are not consistent with state law" because no compact is in effect and they therefore violate IGRA. Doc. 36-1 at 47.
The Court will resolve the first issue: No, because the land was taken into trust by the United States for North Fork, North Fork had jurisdiction over that land for purposes of IGRA and therefore IGRA was not violated by Secretary prescribing Secretarial Procedures.
Next, the Court will not resolve the second issue because the agency action that purportedly violates the Tenth Amendment-the fee-to-trust determination made pursuant to the IRA-is not challenged in this action therefore the question is not properly before the Court. Insofar as Plaintiffs seek to vindicate the State of California's partial divestment of jurisdiction by operation of the IRA, it is well settled in this Circuit that they lack standing to do so. Oregon v. Legal Servs. Corp. ,
Finally, the court will resolve the third issue: Secretarial Procedures are not inconsistent with California law merely because a compact does not exist.
A. IGRA-Jurisdiction Over Land and Governmental Power Requirements
In the final stage of the IGRA remedial process, the Secretary must prescribe gaming procedures under which Class III gaming may be conducted "on the Indian lands over which the Indian tribe has jurisdiction."
The second requirement, arising from the definition of "Indian land," is that the tribe "exercise governmental power" over the land.
In short, an Indian tribe must exercise governmental power over land held in trust by the United States for the tribe for the land to be Indian land.
B. Having Jurisdiction Over Indian Land
Plaintiffs begin their argument by quoting the portion of this Court's November 29, 2017 order that framed the issue then before the Court: "Legally, the parties are in agreement that, at least in the ordinary case, acquisition of an ownership interest in land by the United States only impacts title to that land; it does not divest the State of jurisdiction over that land. [citation omitted] ... The parties disagree regarding the jurisdictional impact of the Secretary taking the Madera Site into trust for North Fork through the authority delegated to the Secretary by the IRA." Doc. 36-1 at 10 (quoting Doc. 33 at 5). It is not until much later in Plaintiffs' argument that they recognize that the Court resolved that question in its November 29, *10442017 order. See Doc. 36-1 at 44. In the interim, Plaintiffs' argument reiterates (albeit in more depth) the argument submitted in response to this Court's authorization for supplemental briefing in resolving Plaintiffs' motion to supplement the administrative record. Compare Doc. 32 with Doc. 36-1.
In both iterations of Plaintiffs' argument, the reasoning is as follows: IGRA requires "territorial jurisdiction" over any land where Class III gaming is to be conducted; California has territorial jurisdiction over all land within its borders, including the Madera Site; transfer of title to real property does not impact territorial jurisdiction over that real property; in order for an Indian tribe to acquire jurisdiction over land sufficient for purposes of IGRA, the State in which the land lies must expressly cede jurisdiction to the tribe or the United States; no express cession of jurisdiction by California has taken place with respect to the Madera Site and the United States has not expressly accepted jurisdiction of the Madera Site; therefore North Fork does not have jurisdiction over the Madera Site and the Secretary erred in issuing Secretarial Procedures.
To Plaintiffs' motion to supplement and motion for summary judgment, the Secretary has responded that North Fork's jurisdiction over the Madera Site, for purposes of IGRA, arose through the act of placing the land in trust for the tribe. The Court agreed with the Secretary's position in denying Plaintiffs' motion to supplement the administrative record and the Court remains in agreement now.
i. The fee-to-trust determination shifts some jurisdiction from a State to an Indian tribe.
As a starting point, Congress has the power to regulate commerce with the Indian tribes. U.S. Const. art. I, § 8, cl. 3 (conferring upon Congress the power "[t]o regulate commerce ... with the Indian tribes.") The Supreme Court has described Congressional authority under the Indian Commerce Clause as "plenary." Cotton Petroleum Corp. v. New Mexico ,
The United States Supreme Court has been clear that § 5 of the IRA "provides the proper avenue for" an Indian tribe "to reestablish sovereign authority over territory...." City of Sherrill, N.Y. v. Oneida Indian Nation of New York ,
Other circuits share a similar understanding. The Second Circuit held in Upstate Citizens ,
The cases cited by Plaintiffs do not undermine that conclusion.
ii. The shift of jurisdiction to an Indian tribe resulting from a fee-to-trust determination is enough to satisfy the "having jurisdiction over" Indian lands requirement of § 2710(d)(1)(A)(i).
IGRA does not define what it means to have jurisdiction over Indian land. The answers that Courts have given to this *1046question are varied. The Second Circuit has indicated that " '[j]urisdiction,' in this context, means 'tribal jurisdiction'-'a combination of tribal and federal jurisdiction over land,' to the exclusion (with some exceptions) of state jurisdiction." Upstate Citizens ,
" '[L]ands held in trust by the United States for the Tribes are Indian Country within the meaning of § 1151(a).' " U.S. v. Sohappy ,
The First Circuit appears to require a lesser showing that the Second Circuit to prove that a tribe has jurisdiction over land for purposes of IGRA-that a tribe possesses "that portion of jurisdiction they possess by nature of their sovereign existence as a people." Wampanoag Tribe ,
In this Court's estimation, a logical reading of the "having jurisdiction over" language is simply that it is a linkage requirement between the Indian tribe and the Indian land at issue. In other words, that language is included to ensure that an Indian tribe in California, for instance, does not seek authorization to conduct Class III gaming on Indian land under the jurisdiction of some other tribe in New York. When a tribe possesses Indian lands, that tribe necessarily has jurisdiction over those lands. Such a reading is consistent with the language of § 2710(d)(3)(A) :
Any Indian tribe having jurisdiction over the Indian lands upon which a class III gaming activity is being conducted, or is to be conducted, shall request the State in which such lands are located to enter into negotiations for the purpose of entering into a Tribal-State compact governing *1047the conduct of gaming activities. Upon receiving such a request, the State shall negotiate with the Indian tribe in good faith to enter into such a compact.
Regardless of which standard is correct, North Fork has jurisdiction over the Madera Site. Applying the Second Circuit's test from Upstate Citizens , the land acquired in trust by the United States for the benefit of North Fork is Indian country, set apart for the use of the tribe and under federal superintendence. It is therefore under North Fork's tribal jurisdiction. Sohappy ,
C. Exercising Governmental Power
The term "exercising governmental power" is "undefined by IGRA and 'the case law considering the phrase is sparse." Commonwealth v. Wampanoag Tribe of Gay Head ,
That said, the other circuit courts suggests a need for actual use of the jurisdictional authority over the land; some showing of "concrete manifestations of that authority." Wampanoag Tribe ,
The Second Circuit in Wampanoag Tribe and in Narragansett had no problem determining that the Tribes exercised governmental power. The Wampanoag Tribe "established a housing program," "entered into an intergovernmental agreement with the EPA," "operat[ed] a health care clinic," offered social services and public safety services, passed ordinances, and employed a judge. Wampanoag Tribe ,
Even assuming the First and Second Circuits are correct, there is sufficient evidence in the administrative record such that it was not arbitrary or capricious for the Secretary to conclude that North Fork exercised governmental power over the Madera Site.
In this case, the Secretary was procedurally in a different position than in Wampanoag Tribe and Narragansett . Here, a determination had already been made that the Madera Site is Indian land. In North Fork v. California ,
Next, even assuming the Secretary was required to delve beyond the Court's determination, the evidence available to the Secretary in the time before the Secretarial Procedures were issued indicated that North Fork had enacted an ordinance with respect the Madera Site. Miskinis Decl., Doc. 37-2 at 4-6.15 If the Court remanded the action to the Secretary for consideration of whether North Fork exercised governmental power over the Madera Site, the Secretary could only conclude that North Fork exercised governmental power over that site by legislating with respect to it.
D. Consistency with California Law
At the final stage of the remedial process, the Secretary must prescribe gaming procedures "which are consistent with the proposed compact selected by the mediator ..., the provisions of [IGRA], and the relevant provisions of the laws of the State."
As a preliminary matter, Secretarial Procedures cannot be issued if a valid compact governing Class III gaming on an Indian tribe's Indian lands exists. See
*1050[T]he State of California ... submits to the jurisdiction of the courts of the United States in any action brought against the state by any federally recognized California Indian tribe asserting any cause of action arising from the state's refusal to enter into negotiations with that tribe for the purpose of entering into a different Tribal-State compact pursuant to IGRA or to conduct those negotiations in good faith, the state's refusal to enter into negotiations concerning the amendment of a Tribal-State compact to which the state is a party, or to negotiate in good faith concerning that amendment, or the state's violation of the terms of any Tribal-State compact to which the state is or may become a party.
Moreover, there is good reason to treat Secretarial Procedures issued pursuant to § 2710(d)(7)(A)(vii) as equivalent to a Tribal-State compact for purposes of IGRA and therefore also for purposes of the relevant portions of California law designed to mirror IGRA. Section 2710(d)(1) makes clear that "[c]lass III gaming activities shall be lawful on Indian lands only if such activities are," among other things, "conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State under paragraph (3) that is in effect." If Secretarial Procedures prescribed pursuant to section 2710(d)(7)(A)(vii) are not treated as equivalent to a Tribal-State compact for purposes of IGRA, then the remedial process would be meaningless. Secretarial Procedures could never be issued because Secretarial Procedures-necessarily issued in the absence of a compact that is in effect-would always be "[in]consistent with ... the provisions of [IGRA]...."
E. Conclusion
The Secretary's issuance of Secretarial Procedures was not arbitrary, capricious, or otherwise not in accordance with law for any of the reasons identified by Plaintiffs. Again, the Court does not address the alleged unconstitutionality of the jurisdictional shift caused by the fee-to-trust determination as that determination is not properly before this Court, as described above.
III. Order
Based on the foregoing, IT IS HEREBY ORDERED that the Plaintiffs' motion for summary judgment is DENIED and the Federal Defendants' motion for summary judgment is GRANTED.
IT IS SO ORDERED.
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