By the summer of 2014, it appeared that the North Fork Rancheria
of Mono Indians of California had finally made it over the last
hurdle to begin construction of a Class III casino with 2,000 slot
machines and 40 gaming tables in Madera County, California. But a
successful anti-gaming ballot initiative reversed the Tribe's
Class III gaming compact in November, and the Tribe is now suing to
regain its lost ground.
The Tribe had pursued its goal for more than 10 years, executing a
memorandum of understanding with Madera County in 2004. In 2011,
the Tribe won a "two-part" gaming eligibility
determination for its newly acquired off-reservation casino site
under the Indian Gaming Regulatory Act ("IGRA"). The
determination was based on conclusions by the Secretary of the
Interior that a gaming facility was in the best interests of the
Tribe and not detrimental to the surrounding area, with the
concurrence of the governor.
The Tribe negotiated a gaming compact with Governor Jerry Brown,
which was signed by the governor in August 2012. In February 2013,
the Tribe successfully placed a 305-acre parcel in trust status for
the project, 36 miles from its Rancheria. On October 22, 2013, the
Secretary of the Interior published notice that the compact was
federally approved. California requires that Class III gaming
compacts be legislatively ratified, and on June 27, 2014, the
legislature ratified the Tribe's compact. Governor Brown signed
the compact ratification bill on July 3.
The Tribe received a devastating blow when, immediately after the
legislative ratification, Stand Up for California!, a
gaming watchdog group opposed to what it calls "reservation
shopping" by California Indian tribes, began the process of
gathering signatures to refer the North Fork compact, along with a
second off-reservation gaming compact, to the voters. The group
successfully placed the referendum on the November 2014 general
election ballot and commenced an $18.5 million campaign to defeat
the compacts, reportedly outspending supporters of the project by
45-1. Almost all of the opposition funding came from other Indian
gaming tribes and their investors. The Picayune Rancheria of
Chukchansi Indians claimed the North Fork project would reduce
revenues at their own casino by as much as a third (the Chukchansi
casino is currently closed due to a tribal leadership
dispute).
Stand Up! had previously sued the State, the governor and
other officials in California state court seeking to prevent the
governor from even executing the North Fork compact. After
Stand Up! began the referendum process, the Tribe
intervened in that litigation and filed a counterclaim challenging
the validity of the referendum. The Tribe claimed that (1) the
ratification could not be undone by referendum under California
law, and (2) IGRA's requirement that states negotiate compacts
"in good faith" preempted such a referendum to the
electorate. On June 26, the state court allowed the referendum to
proceed, ruling that the compact ratification was subject to
referendum under California law as a "legislative act"
and not an exempt "administrative act." The Court further
held that California's referendum process could be read in
harmony with IGRA and was not preempted by the federal law.
The Tribe has strong support within Madera County and the City of
Madera for the gaming project due to expectations that the project
would create 1,400 local jobs and millions of dollars in mitigation
payments to local governments. However, the California voters
reversed the legislative ratification in the November 4, 2014,
general election, leaving the Tribe without a Class III
compact.
IGRA requires states to negotiate gaming compacts and allows tribes
to sue for an order that the state conduct negotiations in good
faith. If the Tribe and State fail to reach a compact within 60
days of such an order, IGRA states that each party must submit a
proposed compact to a mediator to select the compact which
"best comports with" IGRA and the findings of the Court.
If the State fails to consent to that compact within a further 60
days, the Secretary of the Interior prescribes procedures
"consistent with the proposed compact selected by the
mediator," IGRA, and "relevant provisions of the laws of
the State." The Tribe may then conduct Class III gaming under
the imposed "Secretarial procedures."
A 1996 Supreme Court opinion limited the application of Secretarial
procedures to states that waive their Eleventh Amendment immunity
to tribal suits under IGRA. In Seminole Tribe v. Florida, the State
of Florida challenged the Tribe's lawsuit against it as
unconstitutional. Florida argued that, because the Eleventh
Amendment shielded it from such lawsuits without its consent, the
Seminole Tribe could not obtain the court's finding of bad
faith and order, which IGRA requires before proceeding to the
imposition of Secretarial procedures, because the State had not
waived its immunity to be sued. The Supreme Court agreed that
Congress could not breach states' Eleventh Amendment immunity
through legislation. However, California's laws enabling Indian
gaming expressly waived the State's sovereign immunity to
tribal suits for failure to negotiate compacts pursuant to IGRA,
opening the door for North Fork to press its claims.
In January 2015, the Tribe requested that the State reopen compact
negotiations. In a January 16, 2015, letter to the Tribe's
attorney, Joginder Dhillon, Senior Advisor for Tribal Negotiations
to Governor Brown, wrote: "Given that the people have spoken,
entering into negotiations for a new compact for gaming on the
Madera parcel would be futile."
Dhillon's letter was exactly what the Tribe needed to
demonstrate that the State had refused to negotiate. On March 17,
the Tribe filed a federal lawsuit against the State of California
in federal district court alleging that the referendum overturning
the compact ratification and the renewed refusal to enter new
negotiations violated IGRA. The Tribe asked the court for a
declaration that the State had failed to negotiate a Class III
gaming compact "in good faith" in violation of IGRA and
for an order requiring the State to resume negotiations.
The State has yet to file an answer, but California's waiver of
its Eleventh Amendment immunity to the Tribe's bad-faith suit
means that the Tribe will likely prevail and win the right to
conduct Class III gaming at the site. In the meantime, nothing
prevents the Tribe from conducting Class II gaming on the site, as
Class II gaming does not require a compact.
Dickinson Wright attorneys represented Madera County in
negotiations for an intergovernmental agreement with North Fork and
currently represent the County in a dispute related to the Picayune
Rancheria of Chukchansi Indians.
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