Gaming has brought not only money and millions of visitors onto Indian lands. It has also brought sometimes unwanted attention to unresolved issues of Indian law.

Yet, the most important Indian gaming case to come before the U.S. Supreme Court in recent years technically did not involve Indian gaming at all.

In 1934, Congress passed the Indian Reorganization Act, which allows the U.S. Bureau of Indian Affairs to take land into trust on behalf of tribes without the approval of the states. The Indian Gaming Regulatory Act, on the other hand, clearly gives state governors veto power over land taken into trust for gaming for tribes that already have reservations.

In 1991, the Narragansett Tribe bought a 31-acre parcel in Charlestown, R.I. In 1998, the secretary of the Interior agreed to take it into trust. Gov. Donald L. Carcieri filed suit opposing the move. At stake was the issue of whether the land should be subject to state law — and the state’s prohibition on casino gambling — or whether it should be governed by tribal and federal law. The Narragansetts said they had no intention of opening a casino.  But tribes have been known to change their minds. A win for the tribe could have inspired expansions in a dozen states.

There were major constitutional issues, but the ultimate legal challenge revolved around a single word: “now”.

The Indian Reorganization Act defines “Indian” as “all persons of Indian descent who are members of any recognized Indian tribe now under Federal jurisdiction.” Did Congress mean what the sentence literally says, that the BIA can take land into trust regardless of state laws only for tribes that were recognized in 1934? It would seem not. But in February, in a potentially landmark decision marking a victory for the states, the justices ruled in Carcieri v. Salazar that the federal government’s authority in the matter applies only to tribes recognized to be under U.S. jurisdiction at the time of the 1934 act. The U.S. government argued that the law allows it to take land into trust for tribes regardless of when they were recognized, but Justice Clarence Thomas said in his majority opinion that the law “unambiguously refers to those tribes that were under the federal jurisdiction” when [the law] was enacted.

FEDERAL RECOGNITION

Only federally recognized tribes fall under the Indian Gaming Regulatory Act, so determinations by the BIA become matters of economic life and death for tribes. The recognition process takes years, and then almost always ends up with the BIA rejecting the application, followed almost always by lawsuits and almost always by courts upholding the BIA’s decision. The view of many courts can be summed up in this quote from former U.S. Rep. Christopher Shays of Connecticut: “Regretfully, Indian recognition is too often not about recognizing true Indian tribes, but it is about Indian gaming and the license to print money.”

SOVEREIGN IMMUNITY

Disputes surrounding tribal sovereignty, particularly sovereign immunity, continue to swirl. Tribes are often losing in federal and state courts, with decisions finding that tribes have accidentally waived their immunity to suits by such acts as agreeing to arbitration. Even when tribes win, courts often indicate they think the tribes should lose. The U.S. Supreme Court has clearly indicated that it thinks tribal sovereign immunity is a mistake and that Congress should eliminate it.

Possibly the most dangerous recent case for tribes operating casinos was a decision this year from the Supreme Court of Oklahoma.  Loyman Cossey, a non-Indian, sued Cherokee Nation Enterprises in state court for personal injuries he received while he was a customer at the Roland Cherokee Casino. Although the tribe had set up this separate company to run the casino, the court first ruled that the tribe itself was a proper party to the suit. It then went on to hold that the case could proceed in state court because the casino patron “had not entered into a consensual relationship with the tribe, and customer’s presence at the casino did not have a direct impact on the tribe’s political integrity.”

The tribe had agreed to a partial waiver of sovereign immunity in its tribal-state compact when it signed onto a provision that tort claims may be heard in a “court of competent jurisdiction”.  The court rejected an affidavit from Gov. Brad Henry that he meant tribal courts, not state courts. Instead, the court held that state courts were the only place the case could be heard because tribal courts do not have the power to hear any case involving a non-Indian casino customer unless the compact expressly says so.

The case will probably go up to the U.S. Supreme Court before a trial is heard on the merits.

‘INDISPENSABLE PARTIES’

The question of tribal sovereign immunity arises not only when a tribe has been sued, but when it has not. Because tribes normally cannot be sued without their consent, they are usually not named as defendants. Non-Indian defendants then move to dismiss, especially in cases involving gaming compacts, on the grounds that the plaintiffs failed to join “indispensable parties,” the tribes.

The trend seems to be for courts to let the lawsuits continue, even when it might have some impact on tribal gaming. For example, trial courts had dismissed suits filed by a few tribes challenging California’s calculation of the state cap on slot machines under the 1999 compacts. The 9th U.S. Circuit Court of Appeals reversed, even though the other tribes that signed those compacts were not parties to the suits. 

On the other hand, the Court of Appeals of the state of Washington has ruled that a private casino that also wanted to put in electronic scratch-ticket games could not even indirectly attack the state’s tribal compacts because the tribes could not be joined as defendants.

SOVEREIGNTY and the LAW

Sometimes federal and state courts are even changing standards that have existed for years. There used to be general agreement that laws did not apply to tribes unless the law contained a clear statement that Congress intended it to apply. But the U.S. Court of Appeals for the District of Columbia has ruled that the National Labor Relations Act applies to tribal casinos because Congress did not specifically exclude tribes.

The case involved a dispute between two unions anxious to capture the workers at the San Manuel Tribe’s casino in California  The federal government ruled that it was unfair for the tribe to help only one union. But the court went further, declaring that, at least for federal labor laws, a tribal casino was merely a casino, and the tribe was entitled to no special treatment.

Other courts are looking at this precedent. States in particular are attempting to apply their laws to tribes. The court in this case based its ruling in part on a case from California which held that a state law dealing with political donations applies to tribes.

REVENUE-SHARING and TAXES

Tribes and states continue to fight about regulations, revenue-sharing and taxes. Michigan’s Bay Mills Resort & Casino, owned by the Bay Mills Indian Community, won an interesting marker-collection case, sure to be a precedent in these tough economic times, when the state Court of Appeals ruled that the state’s administrative rules on check-cashing do not apply.

States and local governments are constantly trying to impose sales and other taxes on suppliers and non-Indian businesses working with tribal casinos. For example, the Mashantucket Pequots have filed suit against the town of Ledyard, Conn., to prevent it from imposing its personal property tax on gaming machines leased from a manufacturer by the tribe’s Foxwoods resort. And the 9th U.S. Circuit Court of Appeals has ruled that California could impose a sales tax on construction materials purchased by a non-Indian electrical subcontractor and delivered to the Barona Tribe’s land for a casino expansion.

CLASS II vs. CLASS III

The issue of Class II versus Class III gaming devices continues to be fought in the courts, with the tribes being nearly universally successful. But it is doubtful the issue will finally be decided by any judge because making law through lawsuits can never keep up with changes in technology.

The states may try again to get Congress to step into this fight. But tribes have become not only politically powerful but more politically sophisticated. Tribes now make the argument that if proposed administrative regulations or legislation that affects states can require that there first be consultations with the 50 sovereign states, then why should there not be similar consultations with the separately sovereign tribes, even if there are hundreds of them?

SCOPE of GAMING

Although disputes over the scope of gaming usually revolve around gaming devices, even card games can become a center of controversy.

The Florida Supreme Court has ruled that Gov. Charlie Crist did not have the power to enter into a compact allowing blackjack and baccarat to the Seminole Tribe’s casinos, but the Seminoles continue to spread the games in their properties. The tribe takes the position that the compact had already been approved by the secretary of Interior and so is binding.

INTERIOR vs. the STATES

The mess in Florida and other states is the direct result of the U.S. Supreme Court’s failure to give guidance to states, tribes and the federal government after it declared part of IGRA unconstitutional in 1996. Courts are struggling with the question of whether the secretary of Interior can make Class III gaming regulations when a state refuses to negotiate in good faith. 

Someday soon either Congress or the Supreme Court is going to have to determine what happens when a tribe has the right to have Class III gaming but the state refuses to enter into a compact.