ASKED & ANSWERED: States, tribes must negotiate new gaming compacts


Attorney: U.S. high court decision could lead to flurry of lawsuits

By Steve Thorpe
Legal News

The U.S. Supreme Court recently heard oral arguments in a case that could have broad implications for Indian-run casinos in Michigan and their claim of tribal sovereign immunity. State government argues that the Bay Mills Indian Community violated state law and its tribal-state compact when it opened a small casino in Vanderbilt, near Gaylord. The tribe counters that property purchased with earnings from a land claim settlement trust becomes a tribal reserve and can be used for a casino. Also, casinos operated by six Native American tribes in Michigan will continue to operate even though the gaming compacts that allow them, originally signed 20 years ago, have expired. The state and the tribes will now negotiate new compacts. Matthew Fletcher is a professor at the Michigan State University College of Law, Director of the Indigenous Law and Policy Center and an acknowledged authority on Indian gaming law.

Thorpe: It was a busy week recently in state gaming law! In your opinion, which is the bigger story: The gaming compacts or the Supreme Court case? And how are they related?

Fletcher: I’d say the Supreme Court case is by far the bigger story, in part because of the concession made by the Michigan Solicitor General John Bursch during the Bay Mills argument. During the argument, Solicitor General Bursch referred to the compacts as including “evergreen clause that allows it to continue while the parties try to negotiate a new compact.” This is the legal position the 1993 compacting tribes have had all along, meaning that the expiration date is not particularly meaningful. Even if the compacts had expired, the Bay Mills case is of far greater importance nationally.

Thorpe: The National Congress of American Indians (NCAI) — the oldest tribal rights group, representing hundreds of tribes — asked the U.S. Department of the Interior to settle the case before the court could hear it. Some tribes have expressed concerns that a Supreme Court decision could leave them open to a flurry of lawsuits over off-reservation activities. Valid concern?

Fletcher: Absolutely yes. Each sovereign, federal, state, and tribal, have enjoyed the legal right to devise when, where, and for what reasons they can be sued. As the Supreme Court has recognized dozens of time, the business of government is impossible if government is forced to defend lawsuits at every stage of government action. If the Court generally abrogates tribal immunity for off-reservation conduct, there will be a flurry of lawsuits from all comers – members, non-members, states, and others – against tribes. Moreover, if the Court adopts a rule that tribal immunity is abrogated for commercial or off-reservation activities, litigation will arise over the scope of the abrogation. One of the most maddening moments, I’m sure, for NCAI during oral argument was the tribe’s counsel’s failure to point out that line-drawing like that in a modern economy is practically impossible.

Thorpe: The Bay Mills tribe bought non-tribal land near Vanderbilt, Mich., with the intent of opening a casino, but was blocked by the state. The tribe, which has pursued casino sites in the Lower Peninsula, argued that the land should be available for tribal gambling because it was purchased through the proceeds of a land settlement. How do you think the Supreme Court will react to that argument?

Fletcher: I doubt the Court would reach that question. In any event, the Department of Interior has concluded that Bay Mills’ legal theories as to the legality of that casino are conclusively wrong. Would that the state and the tribe waive immunity to allow the courts to reach that question, we wouldn’t be in the Supreme Court.

Thorpe: What are the possible impacts of the expiration of the compacts and negotiations on new ones?

Fletcher: That’s unclear. Certainly, what happens here will affect how the next generation of compacts will be renegotiated. One major difference is that the 1993 compacts came about as a result of federal court litigation, with important parts of the state-tribal agreement formalized in a stipulation and consent decree. A better question might be how the more recent compacts, which include important differences on revenue sharing from the 1993 compacts, are affecting the negotiations in the current round. It’s no secret, for example, that the State wants the 1993 compacting tribes to agree to distribute revenue to local units of government through a local revenue sharing board.

Thorpe: There appears to be some question, from a legal standpoint, as to whether the compacts actually expired. Your view?

Fletcher: I’d say no but there is a lot of ambiguity in the compacts. Section 12 (A) includes a 20 year term. But section 12 (B) states: “At least one year prior to the expiration of twenty (20) years after the Compact becomes effective, and thereafter at least one year prior to the expiration of each subsequent five (5) year period, either party may serve written notice on the other of its right to renegotiate this Compact.” Section 12 (C) also states: “If the parties are unable to conclude a successor compact, this Compact shall remain in full force and effect pending exhaustion of the administrative and judicial remedies set forth in IGRA and/or any other applicable federal law.” Either of these clauses may be the clause referred to by Solicitor General Bursch as an “evergreen” clause. Sub-section (C), I believe, is particularly important in that it means to incorporate provisions in the federal gaming act that affirmatively prevent the State from barring tribal gaming going forward. These provisions, substantively gutted by the Supreme Court in Seminole Tribe v. Florida in 1996, allow the tribes to seek a class III compact from the Secretary of the Interior if the state fails to negotiate “in good faith.” Sub (C) resurrects that process.

Thorpe: As long as we’re on the subject of gaming and odds, do you want to venture odds on which side will prevail in the Supreme Court case?

Fletcher: That’s easy if one accounts for past history. In the Roberts Court, tribal interests are one-for-ten. Adding in the results from the Rehnquist Court, tribal interests lose 80 percent of their cases, far more than convicted criminals. If you factor in the fact that the one tribal win in the Roberts Court era was a case of statutory interpretation, where the Court is somewhat bound by statutory language and tribal interests have a fighting chance. But the Bay Mills case has been framed as a common law case where this is no limit on the Court’s discretion, I’d say the odds are even worse. The oral arguments confirms my prediction that the tribe will lose and the Sixth Circuit will be reversed. The only real question is how the Court will craft its opinion. Much of the oral argument involved the other legal tools Michigan has to shut down the Vanderbilt casino if the tribe re-opens.

Those options include interpreting the federal gaming act to allow this kind of suit against the tribe, suing tribal officials under the Ex parte Young legal fiction, negotiating for a tribal waiver of immunity in the compacting process, and even criminal law enforcement action. In short, the majority of oral argument involved discussion of which manner the tribe will lose. Tribal interests nationally can only hope the Court doesn’t see the need to generally abrogate tribal immunity.