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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT [Case No.: 1:19-CV-00024-AWI-SKO]

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LESTER J. MARSTON California State Bar No. 081030 RAPPORT AND MARSTON 405 West Perkins Street Ukiah, California 95482 Telephone: 707-462-6846 Facsimile: 707-462-4235 Email: [email protected] Attorney for Plaintiffs Chemehuevi Indian Tribe, Chicken Ranch Rancheria, Hopland Band of Pomo Indians, and Robinson Rancheria DAVID B. DEHNERT California State Bar No. 214243 DEHNERT LAW, PC 475 Washington Blvd. Marina Del Rey, California 90292 Telephone: 310-822-3222 Facsimile: 310-577-5277 Email: [email protected] Attorney for Plaintiff Blue Lake Rancheria

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

CHICKEN RANCH RANCHERIA OF

ME-WUK INDIANS, BLUE LAKE

RANCHERIA, CHEMEHUEVI

INDIAN TRIBE, HOPLAND BAND

OF POMO INDIANS, and ROBINSON

RANCHERIA,

Plaintiffs,

v.

GAVIN NEWSOM, Governor of

California, and STATE OF

CALIFORNIA,

Defendants.

Case No.: 1:19-CV-00024-AWI-SKO

MEMORANDUM OF POINTS

AND AUTHORITIES IN

SUPPORT OF PLAINTIFFS’

MOTION FOR SUMMARY

JUDGMENT

[25 U.S.C. § 2710(d)(7)(A)(i)]

DATE: December 9, 2019 TIME: 1:30 p.m. LOCATION: Courtroom 2, 8th Floor JUDGE: The Honorable Anthony W. Ishii

Case 1:19-cv-00024-AWI-SKO Document 35-1 Filed 11/08/19 of 50

i MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’

MOTION FOR SUMMARY JUDGMENT [Case No.: 1:19-CV-00024-AWI-SKO]

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TABLE OF CONTENTS

INTRODUCTION ..................................................................................................... 1

STATEMENT OF FACTS ........................................................................................ 2

LEGAL STANDARD ................................................................................................ 2

ARGUMENT ............................................................................................................. 2

I. THE INDIAN GAMING REGULATORY ACT REQUIRES STATES TO

NEGOTIATE GAMING COMPACTS IN GOOD FAITH. .................................. 2

II. THE STATE FAILED TO NEGOTIATE WITH THE TRIBES IN GOOD

FAITH. .................................................................................................................... 8

A. The State Demanded that the Tribes Include Compact Provisions that are

not Proper Subjects of Negotiation Under the IGRA. ..................................... 8

1. State Tort Laws. ................................................................................ 8

2. State Environmental Laws. .............................................................12

3. Subjecting the Tribes to the Jurisdiction of Local Governments. ...16

4. Recognition and Enforcement of State Spousal and Child Support

Orders. .................................................................................................20

5. State Minimum Wage Laws. ...........................................................22

6. Anti-Discrimination Laws. ..............................................................23

7. Labor Laws. .....................................................................................24

B. The State Did not Negotiate with the Tribes in Good Faith when it

Demanded that the Tribes Include a Provision in Their Compacts Requiring

the Payment of a Tax Prohibited by the IGRA..............................................26

1. The State Failed to Negotiate in Good Faith when it Demanded the

Payment of a Tax and Did not Offer a Meaningful Concession in

Exchange. ............................................................................................30

IV. THE STATE CANNOT, AS A MATTER OF LAW, OFFER A

MEANINGFUL CONCESSION IN EXCHANGE FOR COMPACT

PROVISIONS THAT EXCEED THE SCOPE PERMITTED BY THE IGRA. .32

V. THE DEEMED APPROVED LETTERS ISSUED BY THE SECRETARY

OF THE INTERIOR PROVIDE FURTHER SUPPORT FOR THE

CONCLUSION THAT THE STATE HAS NOT NEGOTIATED IN GOOD

FAITH. ..................................................................................................................36

A. The Deemed Approved Letters Reveal that the State is Using the

Compact Negotiation Process to Improperly Expand its Regulatory

Authority Over the Tribes’ On-Reservation Activities. ................................38


ii MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’


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B. The Deemed Approved Letters Support the Conclusion that the

Meaningful Concession Analysis only Applies to Revenue Sharing

Provisions. .....................................................................................................42

CONCLUSION ........................................................................................................ 44


iii MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’


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TABLE OF AUTHORITIES

Federal Cases

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) .............................................. 2

Big Lagoon Rancheria v. California, 2010 U.S. Dist. LEXIS 69144, *15 (N.D. Cal.

2010) ....................................................................................................................... 6

Big Lagoon Rancheria v. California, 759 F. Supp. 2d 1149

(N.D. Cal. 2010) .................................................................................. 7, 15, 16, 33

California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987)..................... 2

Casino Pauma v. NLRB, 888 F.3d 1006 (9th Cir. 2017) .................................. 25, 26

Celotex Corp. v. Catrett, 477 U.S. 317 (1986) .......................................................... 2

Chemehuevi Indian Tribe v. Newsom, 919 F.3d 1148 (9th Cir. 2018) ....................35

Coyote Valley Band of Pomo Indians v. Cal., 331 F.3d 1094

(9th Cir. 2003) .............................................................................................. passim

Estom Yumeka Maidu Tribe of Enter. Rancheria v. California, 163 F. Supp. 3d 769

(E.D. Cal. 2016) ............................................................................................. 5, 6, 7

First National Bank of Arizona v. Cities Service Co., 391 U.S. 253 (1968) ............. 2

Fort Indep. Indian Cmty. v. California, 679 F. Supp. 2d 1159

(E.D. Cal. 2009) ..................................................................................................4, 6

Mashantucket Pequot Tribe v. Connecticut, 913 F.2d 1024 (2d Cir. 1990) ........6, 33

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) ................ 2

McClanahan v. Ariz. State Tax Comm’n, 411 U.S. 164 (1973) ................................ 3

Michigan v. Bay Mills Indian Cmty., 572 U.S. 782 (2014) ...................................3, 8

Nance v. Envtl. Prot. Agency, 645 F.2d 701 (9th Cir. 1981) ...................................16

Navajo Nation v. Dalley, 896 F.3d 1196 (10th Cir. 2018) ..................... 8, 10, 11, 12

North Fork Rancheria of Mono Indians v. California, No. 1:15-cv-00419-AWI-

SAB, 2015 U.S. Dist. LEXIS 154729 fn. 19 at *31 (E.D. Cal. Nov. 13,

2015) .............................................................................................................. 33, 35

Pueblo of Sandia v. Babbitt, 47 F. Supp. 2d 49 (D.D.C. 1999) ...............................45

Pueblo of Santa Ana v. Nash, 972 F. Supp. 2d 1254 (D.N.M. 2013) ......................10


iv MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’


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Rincon Band of Luiseño Mission Indians of Rincon Reservation v.

Schwarzenegger, 602 F.3d 1019 (9th Cir. 2010) ......................................... passim

Santa Rosa Band of Indians v. Kings Cty., 532 F.2d 655 (9th Cir. 1975) ...............20

Scott v. Harris, 550 U.S. 372 (2007) ......................................................................... 2

Seminole Tribe v. Florida, 517 U.S. 44 (1996) .......................................................37

Wash., Dep’t of Ecology v. United States EPA, 752 F.2d 1465 (9th Cir. 1985) .3, 16

United States Codes

25 U.S.C. § 2701 ........................................................................................................ 1

25 U.S.C. § 2702 ........................................................................................................ 3

25 U.S.C. § 2703 ....................................................................................................3, 5

25 U.S.C. § 2710 .............................................................................................. passim

29 U.S.C. § 151 ........................................................................................................25

42 U.S.C. § 12111 ....................................................................................................24

42 U.S.C. § 2000 ......................................................................................................24

Other Authorities

Cal. Gov. Code § 12019.40 ......................................................................................29

California Environmental Quality Act, Public Resources Code §

21000, et seq. ................................................................................................ passim

Fed. R. Civ. P. 56(a)................................................................................................... 2

Pauma Casino and United HERE International Union, 363 NLRB No. 60 at *4

(2015) ....................................................................................................................26

S. REP. NO. 100-446 (1988) ...................................................................... 3, 6, 19, 42

Tribal Child Support Enforcement Programs, 69 Fed. Reg. 16 (Mar. 30, 2004) ....22


1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’


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INTRODUCTION

For over four years, the Blue Lake Rancheria, the Chemehuevi Indian Tribe,

the Chicken Ranch Rancheria of Me-Wuk Indians, the Hopland Band of Pomo

Indians, and the Robinson Rancheria (collectively, the “Tribes”) negotiated with

the State of California, through the Office of the Governor (collectively, the

“State”), in an attempt to reach agreement on a class III tribal-state gaming

compact intended to replace the Tribes’ existing compacts. Throughout the

negotiations, the State insisted that the Tribes negotiate over, and agree to include

in the replacement compacts, provisions that do not fall within the permitted

subjects of compact negotiation set forth in the Indian Gaming Regulatory Act, 25

U.S.C. § 2701, et seq. (“IGRA”). The State also insisted on compact provisions

that constitute a tax on the Tribes to engage in class III gaming, which is prohibited

by the IGRA.

In June of 2018, the State advised the Tribes that, unless they agreed to a

replacement compact that contained the provisions objected to by the Tribes, a

compact could not be presented to the State Legislature for ratification during the

2018 legislative term. Shortly thereafter, in August of 2018, the State notified the

Tribes that it would not engage in further compact negotiations until the governor

to be elected on November 6, 2018 agreed to renew compact negotiations with the

Tribes. The State also advised that it could not guarantee that the new governor

would agree to be bound by those provisions of the replacement compact

previously agreed upon by the Tribes and representatives of then Governor

Edmund G. Brown.

Faced with the State’s take it or leave it offer, which included improper

subjects of negotiation and an illegal tax, the Tribes concluded that the State was

not negotiating in good faith and filed this lawsuit. The Tribes request that the

Court declare that the State’s demand that the Tribes include the improper

provisions and the illegal tax in their replacement compacts was not made in good




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faith and violated the IGRA. The Tribes additionally seek a court order requiring

that the State conclude a replacement compact with the Tribes within 60 days from

the issuance of the court order, as required by the IGRA’s remedial procedures.

STATEMENT OF FACTS

The relevant facts of this case are set forth in Plaintiffs’ Statement of

Undisputed Facts (“SUF”), the Record of Negotiations (“RON”), and the

Declarations of Jason Ramos, Glenn H. Lodge, Lloyd Mathiesen, Alice Becerra,

and Jaime Campanero filed in support of the Tribes’ motion for summary

judgment. The Tribes will not repeat those facts here, but, rather, incorporate them

by this reference as if set forth here in full.

LEGAL STANDARD

A court shall grant a motion for summary judgment when there is no

genuine dispute as to any material fact and the moving party is entitled to a

judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 247-48 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

“Where the record taken as a whole could not lead a rational trier of fact to find for

the nonmoving party, there is no ‘genuine issue for trial.’” Matsushita Elec. Indus.

Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986), quoting First National Bank

of Arizona v. Cities Service Co., 391 U.S. 253, 289 (1968). In ruling on a motion

for summary judgment, a court construes the evidence in the light most favorable

to the non-moving party. Scott v. Harris, 550 U.S. 372, 378-380 (2007).

ARGUMENT

I. THE INDIAN GAMING REGULATORY ACT

REQUIRES STATES TO NEGOTIATE GAMING

COMPACTS IN GOOD FAITH.

“Congress adopted IGRA in response to [the Supreme] Court’s decision in

California v. Cabazon Band of Mission Indians, 480 U.S. 202, 221-222 (1987),

which held that states lacked any regulatory authority over gaming on Indian




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lands.” Michigan v. Bay Mills Indian Cmty., 572 U.S. 782, 794 (2014). Congress’s

primary purpose in enacting the IGRA was “to provide a statutory basis for the

operation of gaming by Indian tribes as a means of promoting tribal economic

development, self-sufficiency, and strong tribal governments.” 25 U.S.C. § 2702

(1). To achieve these purposes, Congress established three classes of gaming that

may be conducted on Indian lands: class I (ceremonial and social games); class II

(bingo, games similar to bingo, and non-banking card games if not prohibited by

state law); and class III (all other forms of gaming that are not class I or class II

gaming, including slot machines of any kind). 25 U.S.C. § 2703 (6)-(8). The

Tribes’ claims in this case concern class III gaming.

Congress gave states a limited role in regulating class III gaming to protect

their interest in preventing the infiltration of organized crime into Indian gaming

and to ensure that games are played fairly1 through tribal-state compacts. “The

mechanism for facilitating the unusual relationship in which a tribe might

affirmatively seek the extension of State jurisdiction and the application of state

laws to activities conducted on Indian land is a tribal-State compact. In no instance,

does S. 555 contemplate the extension of State jurisdiction or the application of

State laws for any other purpose.” S. REP. NO. 100-446, at 6 (1988), reprinted in

1988 U.S.C.C.A.N. 3071, 3076. See also S. REP. NO. 100-446, at 14

(1988), reprinted in 1988 U.S.C.C.A.N. 3071, 3084 (Congress specifically

intended to prevent compacts from being used as subterfuge for imposing state

jurisdiction on tribes concerning issues unrelated to gaming).2

1 25 U.S.C. §§ 2702 (1)-(2).

2 The limited nature of this extension of state jurisdiction is consistent with the historical

jurisdictional relationship between states and Indian tribes. “Respect for the long tradition of

tribal sovereignty and self-government also underlies the rule that state jurisdiction over Indians

in Indian country will not be easily implied.” Wash., Dep’t of Ecology v. United States EPA, 752

F.2d 1465, 1470 (9th Cir. 1985) (citations omitted). See also McClanahan v. Ariz. State Tax

Comm’n, 411 U.S. 164, 170-171 (1973), citing U.S. Dept. of the Interior, Federal Indian Law




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In order to accomplish this legislative intent, the IGRA limits tribal-state

compact negotiations to seven enumerated subjects. 25 U.S.C. § 2710 (d)(3)(C);

Rincon Band of Luiseño Mission Indians of Rincon Reservation v.

Schwarzenegger, 602 F.3d 1019, 1027-28 (9th Cir. 2010). Those subjects are:

(i) the application of the criminal and civil laws and regulations of the Indian tribe or the State that are directly related to, and necessary for, the licensing and regulation of such activity;

(ii) the allocation of criminal and civil jurisdiction

between the State and the Indian tribe necessary for the enforcement of such laws and regulations;

(iii) the assessment by the State of such activities in

such amounts as are necessary to defray the costs of regulating such activity;

(iv) taxation by the Indian tribe of such activity in

amounts comparable to amounts assessed by the State for comparable activities;

(v) remedies for breach of contract; (vi) standards for the operation of such activity and

maintenance of the gaming facility, including licensing; and

(vii) any other subjects that are directly related to the

operation of gaming activities.

25 U.S.C. § 2710 (d)(3)(C). This Court has held “that topics other than those

enumerated by section 2710(d)(3)(C) are prohibited topics of negotiation.” Fort

Indep. Indian Cmty. v. California, 679 F. Supp. 2d 1159, 1171 (E.D. Cal. 2009).

The IGRA also precludes states from imposing “any tax, fee, charge, or

other assessment upon an Indian tribe or upon any other person or entity authorized

by an Indian tribe to engage in a class III activity.” 25 U.S.C. § 2710(d)(4).

Because tribes are prohibited from engaging in class III gaming activities

unless they conclude a compact with the state in which their Indian lands are

845 (1958) (“State laws generally are not applicable to tribal Indians on an Indian reservation

except where Congress has expressly provided that State laws shall apply”).




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located, Congress mandated that “the State shall negotiate with the Indian tribe in

good faith to enter into such a compact,” 25 U.S.C. § 2710(d)(3)(A), and provided

tribes with remedial procedures to compel states to negotiate in good faith. 25

U.S.C. §§ 2710(d)(7)(A)(i) and 2710(d)(7)(B)(i). The IGRA grants to the federal

district courts jurisdiction over bad faith suits filed by tribes. 25 U.S.C. § 2710

(d)(7)(A)(i).

The IGRA enumerates five conditions that must exist before a tribe may

initiate a cause of action against a state for its failure to negotiate compact

provisions in good faith: (1) the tribe must be federally recognized, 25 U.S.C. §

2703(5); (2) the tribe must possess “Indian lands,” 25 U.S.C.§§ 2703(4) and

2710(d)(3)(A); (3) the tribe must have requested negotiations with the state, 25

U.S.C. § 2710(d)(3)(A); (4) more than 180 days must have elapsed since the tribe

requested that the state engage in compact negotiations. 25 U.S.C. §

2710(d)(7)(B)(i); and (5) the State did not conduct such negotiations in good faith.

25 U.S.C. § 2710(d)(7)(B)(i) and (ii).3

The IGRA incorporates a specific burden shifting process for claims that a

state failed to negotiate in good faith. The plaintiff tribe first carries the burden to

introduce evidence to show a tribal-state compact has not been entered into

and that the state did not respond to the tribe’s request to negotiate in good

faith. Estom Yumeka Maidu Tribe of Enter. Rancheria v. California, 163 F. Supp.

3d 769, 774 (E.D. Cal. 2016); 25 U.S.C. § 2710(d)(7)(B)(ii). If a tribe produces

such evidence, then the burden shifts to the state to prove that it has, in fact,

3 The Record of Negotiations filed in support of this motion for summary judgment reveals that

the conditions for filing a bad faith lawsuit are satisfied. It is undisputed that the Tribes are federally recognized, that they possess “Indian lands,” and that they requested that the State engage in negotiations to renew or replace their existing class III compacts more than 180 days ago. RON pp. 1-3, 159-162, 210-211, 1232-1233, 1478-1480. The Tribes alleged in their Complaint that the State has not conducted its negotiations with the Tribes in good faith but, rather, demanded that the Tribes include compact provisions that violate IGRA. Complaint, ECF, Dkt. 1.




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negotiated with the tribe in good faith to conclude a compact. Estom Yumeka

Maidu Tribe of Enter. Rancheria v. California, 163 F. Supp. 3d at 774, citing 25

U.S.C. § 2710(d)(7)(A) and (B).

“[G]ood faith should be evaluated objectively based on the record of

negotiations, and . . . a state’s subjective belief in the legality of its requests is not

sufficient to rebut the inference of bad faith created by objectively improper

demands.” Rincon Band of Luiseño Mission Indians of Rincon Reservation v.

Schwarzenegger, 602 F.3d at 1041. Accord Mashantucket Pequot Tribe v.

Connecticut, 913 F.2d 1024, 1033 (2d Cir. 1990) (“The statutory terms are clear,

and provide no exception for sincere but erroneous legal analyses.”).

While the question of whether a state negotiated in good faith is evaluated

based on the record of negotiations, Rincon, 602 F.3d at 1041, a court is not

constrained to simply reviewing the back-and-forth negotiation materials. A court

may go outside of the record to consider additional evidence that bears on the

“reasonableness of [the State’s] bargaining positions.” Big Lagoon Rancheria v.

California, 2010 U.S. Dist. LEXIS 69144, *15 (N.D. Cal. 2010). See also Estom

Yumeka, 163 F. Supp. 3d at 784 (looking at the actions of the Legislature in

deciding whether the State negotiated in good faith); S. Rep. No. 100-446 at 14

(1988), as reprinted in 1988 U.S.C.C.A.N. 3071, 3084. An attempt by a state to

negotiate regarding a topic that is not directly related to gaming is “strong, if not

determinative, evidence of bad faith.” Fort Indep. Indian Cmty. v. California, 679

F. Supp. 2d at 1172.

In determining whether a state failed to negotiate in good faith, the court

“may take into account the public interest, public safety, criminality, financial

integrity, and adverse economic impacts on existing gaming activities,” but the

court “shall consider any demand by the state for direct taxation of the Indian tribe

or of any Indian lands as evidence that the state has not negotiated in good




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faith.” 25 U.S.C. §§ 2710(d)(7)(B)(iii)(I)-(II) (emphasis added). See also Rincon,

602 F.3d at 1029.

If the court finds that the state has failed to negotiate in good faith, “the

court shall order the state and the Indian tribe to conclude such a compact within a

60-day period.” 25 U.S.C. § 2710(d)(7)(B)(iii). If, after 60 days, no compact has

been concluded, the parties are required to submit proposed compacts to a court-

appointed mediator and the mediator is required to select the compact that “best

comports with the terms of [the IGRA] and any other applicable Federal law and

with the findings and order of the court.” 25 U.S.C. § 2710(d)(7)(B)(iv). The state

then has 60 additional days to consent to the selected compact. 25 U.S.C. §§

2710(d)(7)(B)(vi)-(vii). If the state does not consent to the selected compact, the

mediator is required to forward the compact to the Secretary of the Interior who, in

consultation with the Indian tribe, prescribes procedures under which class III

gaming may be conducted by the tribe. 25 U.S.C. § 2710(d)(7)(B)(vii); Big Lagoon

Rancheria v. California, 759 F. Supp. 2d 1149, 1153 (N.D. Cal. 2010); Estom

Yumeka, 163 F. Supp. 3d at 775.

There is one court-created exception to the good faith requirement (which is

discussed in more detail in Sections III(B)(1) and IV, below). A state does not

violate IGRA’s good faith standard when it requests that a tribe pay a fee to a state

in exchange for “meaningful concessions” from the state. Coyote Valley Band of

Pomo Indians v. Cal. (In re Indian Gaming Related Cases Chemehuevi Indian

Tribe), 331 F.3d 1094, 1112-15 (9th Cir. 2003) (“Coyote Valley II”). The

meaningful concession exception, however, only applies to a fee request that is:

“(a) for uses ‘directly related to the operation of gaming activities’ in §

2710(d)(3)(C)(vii), (b) consistent with the purposes of IGRA, and (c) not

‘imposed’ because it is bargained for in exchange for a ‘meaningful

concession.’” Rincon, 602 F.3d at 1033.




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II. THE STATE FAILED TO NEGOTIATE WITH THE

TRIBES IN GOOD FAITH.

A. The State Demanded that the Tribes Include Compact

Provisions that are not Proper Subjects of Negotiation

Under the IGRA.

The IGRA limits negotiations to specifically enumerated subjects that are

“directly related to the operation of gaming activities.” 25 U.S.C. § 2710(d)(3)(C).

In Michigan v. Bay Mills Indian Community, 572 U.S. at 792, the Supreme Court

defined the phrase “class III gaming activity” to mean “just what it sounds like—

the stuff involved in playing class III games.” Bay Mills interpreted the IGRA to

limit compact negotiations to topics that are directly related to the playing and

regulating of class III games. Id.

The Court’s analysis in Bay Mills leads us to the clear conclusion that class III gaming activity relates only to activities actually involved in the playing of the games, and not activities accruing in proximity to, but not inextricably intertwined with, the betting of chips, the folding of a hand, or suchlike.

Navajo Nation v. Dalley, 896 F.3d 1196, 1203 (10th Cir. 2018) (emphasis added).

When the Bay Mills decision is applied to the Tribes’ claims here, it is clear

that the State insisted on including improper subjects of negotiation in its proposed

compact. The State did not, therefore, negotiate in good faith.

1. State Tort Laws.

The State, throughout the course of negotiations, has consistently demanded

that the Tribes agree to subject themselves to California tort law.4 Specifically, the

State has sought to include in the replacement compacts the following provisions:5

4 The Tribes were part of a group of twenty-two federally recognized Indian tribes that joined

together to negotiate with the State. The coalition is called the Compact Tribes Steering

Committee (“CTSC”). Any statement made during compact negotiations on behalf of CTSC was

made on behalf of the Tribes. RON, pp. 1-3, 125-128.




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The Tribe shall adopt, and at all times hereinafter shall maintain in continuous force, an ordinance that provides for all of the following: (1) The ordinance shall provide that the Tribe shall adopt as tribal law, provisions that are the same as California tort law to govern all claims of bodily injury, personal injury, or property damage directly arising out of, connected with, or relating to the operation of the Gaming Operation, Gaming Facility, or the Gaming Activities, including but not limited to injuries resulting from entry onto the Tribe’s land for purposes of patronizing the Gaming Facility or providing goods or services to the Gaming Facility, provided that such injury occurs at the Gaming Facility or on a road accessing the Facility exclusively. California law governing punitive damages and attorney’s fees need not be a part of the ordinance. Further, the Tribe may include in the ordinance required by this subdivision a requirement that a person asserting any claim(s) for money damages against the Tribe for bodily injury, personal injury, or property damage file those claims within the time periods applicable for the filing of claims for money damages against public entities under California Government Code section 810 et seq. Under no circumstances shall there be any awards of punitive damages or attorney’s fees or costs. (2) The ordinance shall also expressly provide for waiver of the Tribe’s sovereign immunity and its right to assert sovereign immunity with respect to resolution of such claims in the Tribe’s tribal court system with jurisdiction over the subject matter, or if there is no tribal court system, by a three-member tribal claims commission with jurisdiction over the subject matter, but only up to the ten million dollar ($10,000,000) Policy limit; provided, however, such waiver shall not be deemed to waive or otherwise limit the Tribe’s sovereign immunity for any portion of the claim that exceeds the ten million dollar ($10,000,000) Policy limit, whichever is greater, or for punitive damages or attorneys’ fees. (3) The ordinance shall allow for the claim to be resolved in the Tribe’s tribal court system (Tribal Court), or if there is no Tribal Court with jurisdiction over the subject matter, by the three (3)-member Claims Commission). No member of the Claims Commission

5 The State demanded that the tort claims provisions at issue be included in the compact in its

first full proposed compact, RON, pp. 1587-1590, Section 12.5(b)-(e), and continued to include

those provisions throughout the entire course of negotiations. RON, pp. 9139-9142, Section

12.5(b)-(d).




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may be employed by the Gaming Facility or Gaming Operation. Resolution of the dispute before the Tribal Court or Claims Commission shall be at no cost to the Claimant (excluding Claimant’s own attorney’s fees and expenses). The Tribal Court or Claims Commission must afford the Claimant with a fair dispute resolution process that incorporates the essential elements of due process.

RON, pp. 9139-9140, Section 12(b) (emphasis added).

The State’s insistence on the inclusion of these provisions conflicts with a

number of federal court decisions that have held that a state cannot use the

compacting process to impose state tort law upon tribal gaming operations.

In Pueblo of Santa Ana v. Nash, 972 F. Supp. 2d 1254 (D.N.M. 2013), the

district court addressed the issue of “whether Congress, by way of the IGRA, has

authorized tribes and states to agree to shifting jurisdiction from tribal court to state

court, thereby allowing the state to exercise jurisdiction over tribal defendants in

visitors’ personal injury lawsuits arising on Indian land.” Id. at 1263. There, the

district court concluded that none of the subjects listed in 25 U.S.C. §

2710(d)(3)(C) authorized the negotiation of a compact that shifted jurisdiction over

personal injury suits from tribal court to state court, reasoning:

[25 U.S.C. § 2710(d)(3)(C)(ii)], the only subparagraph in this section of the statute that mentions jurisdiction, permits an allocation of jurisdiction between the State and the Indian tribe, only as necessary for the enforcement of laws and regulations of the State or Indian tribe, that are directly related to, and necessary for, licensing and regulation of class III gaming activities. The Court finds no justification for concluding that the Indian Gaming Regulatory Act (IGRA) intends the extension of state court jurisdiction for any other purpose than resolution of issues involving the licensing and regulation of class III gaming. A personal injury claim arising from the negligent serving of alcohol has no bearing whatsoever on the licensing or regulation of class III gaming activities.

Id. at 1264.

In Navajo Nation v. Dalley, the Court of Appeals for the Tenth Circuit again

considered whether the IGRA authorized compacting parties to shift jurisdiction




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over personal injury suits arising on Indian lands from tribal courts to state courts.

Navajo Nation v. Dalley, 896 F.3d at 1207-1208. The Tenth Circuit concluded that

such jurisdiction shifting was not a proper subject of negotiation under Section

2710(d)(3)(C):

And even assuming that tort law is a form of “regulation” of “the operation of gaming activities,” . . . actions arising in tort in circumstances similar to this one are not “directly related to, and necessary for, the licensing and regulation of such activity,” § 2710(d)(3)(C)(i), because they do not stem from the actual playing of the casino game. Put another way, if individuals are not participating in class III gaming activities on Indian lands – as Bay Mills understands them – when they are allegedly harmed by a tortfeasor, we are hard-pressed to see how tort claims arising from their activities could be “directly related to, and necessary for, the licensing and regulation” of class III gaming activities.

Id.

In this case, the State has insisted on compact provisions, namely Sections

12.5(b)-(e) of its proposed compact, that force the Tribes to adopt California tort

law as tribal law. See, e.g., RON, pp. 1587-1590, 9139-9142. In the State’s

proposed provision, see, e.g., RON, p. 9140, California law cloaked as tribal law

would be have to be applied and enforced by tribal courts or tribal claims

commissions, but this framework does not alter the outcome intended by the State.

The State, by adding Sections 12.5(b)-(e) to the replacement compacts, aims to

extend its regulatory jurisdiction and public policy to torts occurring on Indian

lands. Under Section 12.5, moreover, the Tribes would not only be subject to State

statutory claims, but they would also be compelled to comply with State procedural

requirements, such as Section 1283.05 of the California Code of Civil Procedure

(governing depositions taken and discovery obtained in arbitration proceedings)

and California Government Code Section 810, et seq. (governing claims and

actions against public entities and public employees). RON, p. 9140, Section

12(b)(1).




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The State has additionally demanded that the Tribes apply California tort

law to any injury that is “connected with,” the Gaming Facility. This would include

injuries unrelated to any “gaming activities,” including an accident on any road

leading to the Gaming Facility or any parking lot providing parking to a Gaming

Facility6—regardless of whether the claimant intended to or played a class III

game. RON, p. 9139-9140, Section 12(b)(1). In other words, the compact provision

proposed by the State does not require that an injury subject to the tort law “stem

from the actual playing of a casino game.” Dalley, 896 F.3d at 1207-08. Such a

demand is overly broad, not directly related to the playing of a class III game, and

constitutes a failure by the State to negotiate in good faith.

2. State Environmental Laws.

The demand that the Tribes adopt blanket provisions of California

environmental law is further evidence of the State’s failure to negotiate in good

faith.7 The environmental provisions at issue effectively impose the requirements

of the California Environmental Quality Act, Public Resources Code § 21000, et

seq. (“CEQA”), in their entirety, on the compacting Tribes. RON, pp. 9102-9129.8

From the beginning of Section 11, it is clear that the State has sought to

impose virtually all of the requirements of CEQA on the Tribes and their

reservations:

To the extent any terms in this section 11.0 are not defined in this Compact, they will be interpreted and

6 See, infra, p. 15.

7 The State demanded that the comprehensive environmental regulation provisions be included in

the replacement compact in its first full proposed compact, RON, pp. 1570-1578, Section 11, and

continued to include and expand those provisions throughout the course of negotiations. RON,

pp. 9102-9129, Section 11. 8 The State’s draft compact dated October 15, 2018 proposes 27 pages of compact provisions

relating to environmental impacts arising from a “Project,” as that term is defined in the

compact. Id. Because the State’s proposed environmental impact provisions are lengthy and

extensive, they cannot be quoted in their entirety here. See id. A few examples, however, reveal

the broad overreach of those provisions.




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applied consistent with the policies and purposes of the California Environmental Quality Act, California Public Resources Code section 21000 et seq. (CEQA) and the National Environmental Policy Act of 1969, 42 U.S.C. § 4332 et seq. (NEPA).

RON, p. 9102, Section 11.1(d).

The State’s proposed Section 11.2 also requires that the Tribes enact a

“Tribal Environmental Protection Ordinance” that incorporates CEQA into tribal

law:

The Tribe shall adopt an ordinance incorporating the processes and procedures required under section 11.0 (Tribal Environmental Protection Ordinance). In fashioning the Tribal Environmental Protection Ordinance, the Tribe will incorporate the relevant policies and purposes of NEPA and CEQA consistent with legitimate governmental interests of the Tribe and the State, as reflected in section 11.0.

RON, p. 9103, Section 11.2.9

The imposition of the whole gamut of CEQA regulations on the Tribes

through the State’s proposed Section 11 is compounded by the State’s definitions

9 The compact provisions proposed by the State also includes two appendices to be utilized as

part of the environmental review process—both of which reveal the State’s intention to impose

the requirements of CEQA on the Tribes and their reservations. Appendix B, entitled “Off-

Reservation Environmental Impact Analysis Checklist,” is substantially the same form checklist

for CEQA compliance used by State agencies. RON, pp. 9158-9166. See, e.g.,

https://dot.ca.gov/programs/environmental-analysis/standard-environmental-reference-ser/forms-

templates#ceqa_forms. Appendix C, entitled “List of Categorical Exemptions,” RON, pp. 9167-

9173, is substantially the same list of categorical exemptions from CEQA as that of the State and

includes the following language:

The section references within this Appendix refer to the

regulations promulgated at the California Code of Regulations,

title 14, division 6, chapter 3, sections 15300 through 15333,

Guidelines for Implementation of the California Environmental

Quality Act pursuant to section 21084 of the Public Resources

Code.

RON, p. 9167. The use of these appendices underscores the fact that the environmental

provisions found in Section 11 are intended to impose the requirements of CEQA on the Tribes.




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of “Project” and “Gaming Facility.” Under the definition demanded by the State,

“Project” includes:

(i) the construction of a new Gaming Facility, (ii) a renovation, expansion or modification of an existing Gaming Facility, or (iii) other activity involving a physical change to the reservation environment, provided the principal purpose of which is directly related to the activities of the Gaming Operation, and any one of which may cause a Significant Effect on the Off- Reservation Environment.

RON, p. 9035, Section 2.25 (emphasis added). This definition is impermissibly

broad and implicates activities that are not directly related to gaming.

Likewise, the State’s definition of “Gaming Facility” encompasses facilities

that are unrelated to the conduct of the gaming. Under the definition demanded by

the State, “Gaming Facility” includes:

any building in which Gaming Activities or any Gaming Operations occur, or in which the business records, receipts, or funds of the Gaming Operation are maintained (but excluding off-site facilities primarily dedicated to storage of those records, and financial institutions), which may include parking lots, walkways, rooms, buildings, and areas that provide amenities to Gaming Activity patrons, if and only if, the principal purpose of which is to serve the activities of the Gaming Operation, provided that nothing herein prevents the conduct of class II gaming (as defined under IGRA) therein.

RON, p. 9032, Section 2.13 (emphasis added). Thus, the State has not just

demanded that the Tribes subject themselves to the full range of requirements of

CEQA, it has attempted to impose those requirements on activities that are not

directly related to gaming through the definitions of “Project” and “Gaming

Facility.” This imposition violates the IGRA. See Letter from Larry Echo Hawk,

Assistant Sec’y for Indian Affairs, U.S. Department of the Interior, to the Hon.

Sherry Treppa Bridges, Chairperson, Habematolel Pomo of Upper Lake (Aug. 31,

2011), Request for Judicial Notice (“RJN”), Ex. 2 (“[W]e have significant

concerns about whether Section 11 of the Compact, when coupled with its




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definition of both “Gaming Facility” and “Project,” exceeds the scope of

provisions tribes and states may include in a Class III gaming compact under

IGRA. . . . Nothing in IGRA or its legislative history indicates that Congress

intended to allow gaming compacts to be used to expand state regulatory authority

over tribal activities that are not directly related to the conduct of Class III

gaming.”)

In Big Lagoon v. California, the Big Lagoon Rancheria sued the State

alleging that the State did not engage in good faith negotiations because it

demanded that the Tribe agree to comply with CEQA on the siting and

construction of its proposed casino. Big Lagoon Rancheria v. California, 759 F.

Supp. 2d at 1153. The district court initially observed that, “under IGRA, the State

‘may not impose its environmental and land use regulations on the Tribe absent

authority from Congress.’” Id. at 1153, citing Order of Mar. 18, 2002 at 12-13. The

district court then ruled that Congress had not granted states the authority to

impose their environmental regulations broadly:

[T]he State may not in good faith insist upon a blanket provision in a tribal-state compact with Big Lagoon which requires future compliance with all State environmental and land use laws, or provides the State with unilateral authority to grant or withhold its approval of the gaming facility after the Compact is signed, as it proposed in the side letter agreement.

Id. at 1154, citing Order of Mar. 18, 2002 at 19.

While the Big Lagoon decision suggests that there may be instances in

which the State might be authorized to request that some environmental regulations

be applied to tribal activities, those activities would have to be “directly related to

gaming operations or . . . be considered standards for the operation and

maintenance of the Tribe’s gaming facility.” Id. at 1162. Here, the State has sought

to impose the full range of CEQA regulation on the Tribes, including on-

reservation projects that have nothing to do with the operation and maintenance of




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the Tribes’ gaming facilities. That is precisely what the Big Lagoon court found to

be impermissible.

The Big Lagoon decision, furthermore, required that the application of state

environmental regulations be “consistent with the purposes of IGRA.” Id. The

broad application of CEQA to the Tribes does not further any of the purposes for

which IGRA was enacted. Applying CEQA broadly to a “Project” relating to a

“Gaming Facility” as defined in the State’s proposed replacement compact does

not promote tribal self-government or tribal self-sufficiency. It does the opposite. It

supplants tribal law with state law. Imposing CEQA on the Tribes does not

promote tribal economic development. On the contrary, it would divert tribal

gaming revenues away from the Tribes’ on-reservation activities and redirect those

revenues to State and local governments’ off-reservation activities.

The Tribes’ interest in managing their environmental affairs on their

reservations is “controlling.” Wash., Dep’t of Ecology v. United States EPA, 752

F.2d at 1472. Federal Environmental Protection Agency policies and practices

emphasize the importance of tribal self-regulation in environmental matters. Id. at

1471-1472. See Nance v. Envtl. Prot. Agency, 645 F.2d 701, 714 (9th Cir. 1981)

(tribes can set their own air quality standards on their reservations pursuant to their

inherent sovereignty and are not subject to state authority). The State’s attempt to

impose the requirements of CEQA on the Tribes’ on-reservation activities must,

therefore, be considered a failure to negotiate in good faith.

3. Subjecting the Tribes to the Jurisdiction of

Local Governments.

In addition to insisting that the Tribes comply with CEQA, the State has

attempted to use the environmental impact mitigation process as a mechanism for

subjecting the Tribes’ casino development projects to the decisions of local




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jurisdictions by requiring the Tribes to enter into intergovernmental agreements

with local governments.10

Before the commencement of a Project, and no later than the issuance of the Final TEIR to the County and/or the City, the Tribe shall offer to commence government-to-government negotiations with the County and/or the City, and upon the County’s and/or the City’s acceptance of the Tribe’s offer, the parties shall negotiate on a government-to-government basis and shall enter into enforceable written agreements (hereinafter “intergovernmental agreement”) with the County and/or the City with respect to the matters set forth below: . . .

RON, p. 9125, Section 11.15(a).

Among the matters to be addressed in such agreements are:

The timely mitigation of any Significant Effect on the Off-Reservation Environment (which effects, consistent with the policies and purposes of NEPA and CEQA as described in Appendix B, Off-Reservation Environmental Impact Analysis Checklist), where such effect is attributable, in whole or in part, to the Project, unless the parties agree, based upon the information required by section 11.14, subdivision (e), that the particular mitigation is infeasible, taking into account economic, environmental, social, technological, or other considerations.

RON, p. 9125, Section 11.15(a)(1).

The Tribes are not just compelled to enter into these agreements with local

jurisdictions under the State’s draft compact, they cannot begin construction on a

gaming facility or on any “areas that provide amenities to gaming activity patrons,”

RON, p. 9032, until such agreements are executed.

The Tribe shall not commence a Project until the intergovernmental agreement(s) with the County and the City specified in subdivision (a) and, if applicable the intergovernmental agreement with Caltrans specified in subdivision (b), are executed by the parties or are effectuated pursuant to section 11.16.

10

The State demanded that the intergovernmental agreement provisions be included in the

Compact in its first full proposed compact, RON, pp. 1575-1576, Section 11.7, and continued to

include and expand those provisions throughout the negotiations, see RON, pp. 9125-9127,

Section 11.15.




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RON, p. 9126, Section 11.15(c).

If the Tribe and the local jurisdiction do not successfully negotiate an

intergovernmental agreement, the Tribe would be compelled to engage in binding

arbitration with the local jurisdiction.

To foster good government-to-government relationships and to assure that the Tribe is not unreasonably prevented from commencing a Project and benefiting therefrom, if an intergovernmental agreement with the County, the City, or Caltrans if required by section 11.15, subdivision (b), is not entered within seventy-five (75) days of the submission of the Final TEIR, or such further time as the Tribe and the County, the City, or Caltrans (for purposes of this section the “parties”) may agree in writing, any party may demand binding arbitration before a JAMS arbitrator pursuant to JAMS Comprehensive Arbitration Rules with respect to any remaining disputes arising from, connected with, or related to the negotiation.

RON, p. 9127, Section 11.16.

The State’s draft replacement compact further requires that the Tribes waive

their sovereign immunity with regard to the arbitration.

To effectuate this section, and in the exercise of its sovereignty, the Tribe agrees to expressly waive, and also waive its right to assert, sovereign immunity in connection with the arbitrator’s jurisdiction and in any action to: (i) enforce the other party’s obligation to arbitrate; (ii) enforce or confirm an arbitral award rendered in the arbitration; and (iii) enforce or execute a judgment in state or federal court based upon the award.

RON, p. 9128, Section 11.16(b).

Congress, by enactment of the IGRA, never intended that tribes would be

required to conclude agreements with (or arbitrate disputes with) local

governments in order to engage in gaming. Under the IGRA, a tribe is authorized

to engage in class III gaming if it has met the requirements of Sections

2710(d)(1)(A)-(B) and conducts class III “gaming activities” in “conformance with

a Tribal-State compact entered into by the Indian tribe and the State[.]” 25 U.S.C.

§ 2710(d)(1)(C) (emphasis added). Section 2710(d)(3)(A) provides that, upon

receiving a request from an Indian tribe to enter into compact negotiations, “the




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State shall negotiate with the Indian tribe in good faith to enter into such a

compact.” (emphasis added). The section does not state or otherwise contemplate

that a “city” or a “county” or a “political subdivision” of the State shall negotiate

with the tribe.

Section 2710(d)(3)(A), furthermore, must be read in conjunction with

Section 2710(d)(4), which states that “nothing in this section shall be interpreted as

conferring upon a State or any of its political subdivisions authority to impose any

tax, fee, charge or other assessment upon an Indian tribe . . . to engage in a class III

gaming activity.” (emphasis added). By including the term “political subdivisions”

within Section 2710(d)(4) and not in Section 2710(d)(3)(A), it is clear that

Congress did not intend to include political subdivisions of the State in the

compacting process. If Congress had intended political subdivisions of the State to

have regulatory authority over tribal gaming (or the authority to prevent tribes

from engaging in gaming), it would have done so by expressly referring to political

subdivisions in Section 2710(d)(3)(A).11

This interpretation is consistent with Congress’s intent that the compact

process was to be engaged in only by tribes and states as co-equal sovereigns.

After lengthy hearings, negotiations and discussions, the Committee concluded that the use of compacts between tribes and states is the best mechanism to assure that the interests of both sovereign entities are met with respect to the regulation of complex gaming enterprises such as parimutuel horse and dog racing, casino gaming, jai alai and so forth. . . . The Committee concluded that the compact process is a viable mechanism for setting various matters between two equal sovereigns.

S. REP. 100-446 at 13 (1988), as reprinted in 1988 U.S.C.C.A.N. 3071, 3083

(emphasis added).

11

It important to note that the intergovernmental agreement provision does not include a

requirement that local jurisdictions bargain in good faith.




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The State’s demand that the Tribes negotiate and conclude agreements with

political subdivisions violates the IGRA and is further evidence that the State

refused to negotiate in good faith.12

4. Recognition and Enforcement of State Spousal

and Child Support Orders.

The State has also consistently demanded that the Tribes include a provision

in their compacts that would require the Tribes to recognize and enforce State

spousal and child support orders against all casino employees.13

Specifically, the

State has insisted that:

(d) Under principles of comity, the Tribe shall enact an ordinance granting its tribal court, or if it has no tribal court, a hearing officer appointed by the Tribe, jurisdiction and authority to recognize and enforce tribal or state court child or spousal support judgments entered against any person employed at the Gaming Operation or Gaming Facility (Family Support Ordinance). The failure of the Tribe to comply with the Family Support Ordinance shall not constitute a material breach of this Compact. The Tribe shall promulgate the Family Support Ordinance within sixty (60) days after the effective date of this Compact. The Family Support Ordinance must incorporate the following provisions: (1) At a hearing at which the employee is given personal notice, the tribal court or hearing officer shall recognize and enforce any state court child or spousal order presented to the tribal court or hearing officer,

12

Requiring the Tribes to negotiate with local governments as a precondition to engaging in

gaming also infringes on the Tribes’ sovereignty and constitutes an impermissible interference

with tribal self-government. See, e.g., Santa Rosa Band of Indians v. Kings Cty., 532 F.2d 655,

658-659 (9th Cir. 1975) (holding Congress could not have intended the severe interference with

tribal self-government that would result from imposing detailed local regulations upon Indians

and tribes in Indian country). 13

The State demanded that the spousal and child support order recognition provision be included

in the Compact in its first full proposed compact, RON, pp. 1592, Section 12.6(e), and continued

to include and expand that provision for the entire course of negotiations. See RON, pp. 9144-

9145, Section 12.6(d). Initially, the State demanded that the Tribes include a provision in their

replacement compacts that would have required the Tribes to simply enforce state court child and

spousal support orders. RON, p. 1592, Section 12.6(e). The Tribes later submitted to the State a

counter proposal that would require the Tribes’ tribal courts to recognize these state court orders.

RON, p. 5818-5819, Section 12.6(e). Regardless of the recognition process, enforcement of state

court spousal and child support orders is not a proper subject of negotiation under the IGRA.




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unless the employee can prove by a preponderance of evidence presented, any of the following: (i) that the state court that entered the judgment did not have personal jurisdiction over the employee; (ii) the state court did not have jurisdiction over the subject matter; (iii) the judgment was obtained by fraud that deprived the employee of an adequate opportunity to present his/her case; (iv) the judgment conflicts with another final conclusive judgment of a court of competent jurisdiction; or (v) the state court judge was biased against the employee. (2) The Gaming Facility shall, upon being presented with a tribal court judgment or hearing officer decision that recognizes the state court judgment: (i) withhold from the employee’s work check any amount awarded by the tribal court or hearing officer against the employee and necessary to satisfy all or a portion of the state court judgement recognized by the tribal court or hearing officer, and (ii) remit the amount withheld to the party in whose favor the judgment was entered. The Tribe’s grant of jurisdiction to the tribal court or hearing officer shall include a procedure allowing the employee to apply for a claim of exemption from all or a portion of the judgment to pay for the employee’s necessities of life as defined in the Ordinance.

RON, pp. 9144-9145, Section 12(6)(d).

Just as the imposition of State tort law on tribal gaming operations was not a

permitted topic of negotiations under the IGRA, the recognition and enforcement

of State spousal and child support orders is not related in any way to the operation

of “gaming activities” at the Tribes’ gaming facilities. Similarly, recognition and

enforcement of the orders has nothing to do with the IGRA’s purposes.

Rather, the State’s demand that the Tribes recognize and enforce State

spousal and child support orders is an attempt to again impose a public policy of

California on the Tribes and their reservations. The Tribes’ unwillingness to permit

the State to extend its public policy relating to these non-gaming issues through the

compacting process is not a rejection of the merits of the State’s public policy. The

Tribes’ refusal to agree to the provision is based on the recognition that compact

negotiations are not the appropriate mechanism through which to address that

important public policy. The decision to recognize spousal and child support orders




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from other jurisdictions is an internal decision of each tribe and is recognized by

the federal government as such. See, e.g., Tribal Child Support Enforcement

Programs, 69 Fed. Reg. 16,638, 16,661 (Mar. 30, 2004).

The State’s demand that the Tribes’ compacts include a provision requiring

the Tribes to honor and enforce State spousal and child support orders is further

evidence that the State did not engage in good faith negotiations with the Tribes.

5. State Minimum Wage Laws.

Throughout the negotiations, the State has insisted that the Tribes include in

their replacement compacts a provision that requires the Tribes to comply with the

State minimum wage laws.14

Specifically, the State has insisted that the Tribes:

Adopt and comply with the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., the United States Department of Labor regulations implementing the Fair Labor Standards Act, 29 C.F.R. § 500 et seq., the State’s minimum wage law set forth in California Labor Code section 1182.12 and the State Department of Industrial Relations regulations implementing the State’s minimum wage law, Cal. Code Regs. tit. 8, § 11000 et seq. Notwithstanding the foregoing, only the federal minimum wage laws set forth in the Fair Labor Standards Act, 29 Code of Federal Regulations, part 500 et seq., shall apply to tipped employees.

RON, p. 9137, Section 12.3(j) (emphasis added).

The minimum wage paid to casino employees is not a proper subject of

negotiation under the IGRA. It has nothing to do with the regulation or playing of

class III games within the casino and is not, therefore, “directly related to the

operation of gaming activities.” 25 U.S.C. § 2710(d)(3)(C). Nor does the

imposition of State minimum wage laws on the Tribes fulfill the purposes for

which the IGRA was enacted.

14

The State first demanded that the minimum wage provision be included in the Compact in its

first full proposed compact, RON, p. 1586, Section 12.3(k), and continued to include that

provision throughout the course of negotiations, RON, p. 9137, Section 12.3(j).




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Importantly, under the provision proposed by the State, the State’s minimum

wage law would apply with equal force to all persons employed in the Gaming

Operation, not just to those employees responsible for the playing of class III

games and for the counting and accounting of gaming revenue generated

therefrom. The Tribes would, therefore, be required to pay State minimum wage to

janitors, cooks, food and beverage handlers, heating and cooling technicians,

plumbers, and all other persons employed in the Gaming Facility. It is, again,

another attempt by the State to extend its regulatory authority over the Tribes’

economic development activities, irrespective of whether the development

activities have anything to do with the playing of class-III games.

The State’s unwavering demand that the Tribes include a provision in their

replacement compacts that would subject the Tribes to the State’s minimum wage

law is evidence that the State did not engage in good faith negotiations with the

Tribes.

6. Anti-Discrimination Laws.

Throughout the negotiation process, the State has demanded that the Tribes

adopt ordinances incorporating into tribal law, standards no less stringent than

federal law standards prohibiting discrimination in the Tribes’ gaming facilities.15

Specifically, the State has insisted that Tribes must:

Adopt and comply with tribal law no less stringent than federal laws . . . forbidding employers from discrimination in connection with the employment of persons to work or working for the Gaming Operation or in the Gaming Facility on the basis of race, color, religion, ancestry, national origin, gender, marital status, medical condition, sexual orientation, age, disability, gender identity, genetic information, military or veteran status, and any other protected groups under California law, and forbidding employers from retaliation against

15

The State demanded that the anti-discrimination provisions be included in the Compact in its

first full proposed compact, RON, pp. 1580-1585, Section 12.3(f), and continued to include those

provisions throughout the course of negotiations, see RON, pp. 9130-9137, Section 12.3(f).




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persons who oppose discrimination or participate in employment discrimination proceedings . . . .

RON, pp. 9130-9131, Section 12.3(f).

In addition to attempting to impose federal anti-discrimination laws and

standards on the Tribes, the State has required that the Tribes obtain and maintain

specific insurance coverage and waive their sovereign immunity for discrimination

claims, in addition to other extensive procedural requirements. RON, pp. 9131-

9137, Section 12.3(f)(1)-(9). If the Tribes do not enact an ordinance as required

under the State’s proposed compact, they will be in breach of the compact. RON,

p. 9136, Sec. 12.3(f)(8).

Like the provisions discussed above, the federal discrimination laws the

State insists be included in the replacement compacts are unrelated to the

regulation of class III gaming and do not promote the purposes of the IGRA. The

State’s insistence on the inclusion of the anti-discrimination provision is, again, an

attempt to impose State public policy on the Tribes, which is not permitted under

the IGRA.

The anti-discrimination provisions that the State attempted to impose also

conflict with federal law. Congress has declared that tribes are not “employers”

within the meaning of two federal anti-discrimination statutes: Title VII, Civil

Rights Act of 1964, 42 U.S.C. § 2000(b) and the Americans with Disabilities Act

of 1990, 42 U.S.C. § 12111(5)(B)(i).

The State’s insistence on the inclusion of the anti-discrimination provisions

constitutes a failure of the State to negotiate in good faith.

7. Labor Laws.

The State’s demand that the Tribes include amended labor provisions in their

replacement compacts is yet further evidence that the State did not negotiate with




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the Tribes in good faith.16

Specifically, the State has insisted that Tribes agree to

the following provision:

Notwithstanding any other provision of this Compact, and except as otherwise provided by applicable federal law, this Compact shall be null and void if, on or before its effective date, the Tribe has not confirmed the enactment or continuing effect of the Tribal Labor Relations Ordinance set forth in Appendix G to this Compact, and the Gaming Activities may continue only as long as the Tribe maintains the ordinance. The Tribe shall provide written notice to the State that it has adopted the ordinance, along with a copy of the ordinance as adopted.

RON, pp. 9145-9146, Section 12.10.

The Ninth Circuit held in Coyote Valley II that the labor relations provision

of the 1999 Compact fell within the scope of Section 2710(d)(3)(c)(vii) and,

therefore, the State did not act in bad faith by demanding that those provisions be

included in the tribe’s compact. Coyote Valley II, 331 F.3d at 1115-1116. Coyote

Valley II was decided, however, prior to the Ninth Circuit determination in Casino

Pauma v. NLRB, 888 F.3d 1006 (9th Cir. 2017), that the National Labor Relations

Act, 29 U.S.C. § 151, et seq. (“NLRA”) applies to Indian tribes that operate

casinos under compacts. In holding that the Pauma Band of Luiseño Indians was

an “employer” under the NLRA and subject to the provisions of the National Labor

Relations Board (“NLRB”) the Ninth Circuit stated:

There is no IGRA provision stating an intent to displace the NLRA—or any other federal labor or employment law, for that matter. IGRA’s general allowance that state-tribe compacts “may include provisions relating to . . . the application of . . . civil laws” in no way signifies that compacts must include certain state labor law provisions—or that, if the compacts do, those provisions trump otherwise applicable federal laws. 25 U.S.C. § 2710(d)(3)(C). As the D.C. Circuit put the matter, “IGRA certainly permits tribes and states to regulate gaming activities, but it is a considerable leap from that bare fact

16

The State first demanded that the amended labor provision be included in the Compact in its

first full proposed compact, RON, p. 1593, Section 12.10, and continued to include that

provision for the entire course of negotiations, RON, pp. 9145-9146, Section 12.10.




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to the conclusion that Congress intended federal agencies to have no role in regulating employment issues that arise in the context of tribal gaming.” San Manuel Indian Bingo & Casino v. NLRB, 475 F.3d 1306, 1318, 374 U.S. App. D.C. 435 (D.C. Cir. 2007)[.]

Casino Pauma v. NLRB, 888 F.3d at 1079-1080 (emphasis in original). Accord

Pauma Casino and United HERE International Union, 363 NLRB No. 60 at *4

(2015) (NLRB decision holding that the provisions of the NLRA preempted the

Tribal Labor Relations Ordinance (“TLRO”) set forth in Pauma’s compact).

Thus, the Ninth Circuit has held that the provisions of the NLRA apply to

Indian casinos and control labor relations at the casinos. Despite the NLRA’s

preemption of the TLRO, the State has demanded, throughout the negotiation

process, that the Tribes include a modified version of the TLRO in their compacts.

The Ninth Circuit’s decision makes the inclusion of the TLRO in their compacts

superfluous, unenforceable and needlessly confusing.

Despite the irrelevance of the TLRO, the State’s proposed Section 12.10

provides that “this Compact shall be null and void if, on or before its effective date,

the Tribe has not confirmed the enactment or continuing effect of the Tribal Labor

Relations Ordinance” and “the Gaming Activities may continue only as long as the

Tribe maintains the ordinance.” RON, pp. 9145-9146. The State, despite being

repeatedly informed of the Pauma decisions, see, e.g., RON, pp. 2200-2201, 7205-

7206, demanded that the Tribes include a provision that would prohibit the Tribes

from gaming if they do not enact or maintain in force a superfluous and

unenforceable ordinance that is preempted by federal law.

The State’s insistence that the Tribes include a modified version of the

TLRO in the Tribes’ proposed replacement compacts constitutes a failure on the

part of the State to negotiate in good faith.

B. The State Did not Negotiate with the Tribes in Good

Faith when it Demanded that the Tribes Include a

Provision in Their Compacts Requiring the Payment

of a Tax Prohibited by the IGRA.




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Throughout the compact negotiations, the State insisted that the Tribes pay

a fee to the State to fund a grant program established for non-gaming and limited

gaming tribes located within the State, called the Tribal Nation Grant Fund

(“TNGF”).17

That provision effectively requires the Tribes to pay a tax to the State

in order to engage in gaming. It provides, in part:

The Tribe shall remit quarterly to the State Gaming Agency (i) the payments described in section 4.3, for deposit into the Special Distribution Fund and (ii) the payments described in section 5.2, for deposit into the Revenue Sharing Trust Fund or the Tribal Nation Grant Fund.

RON, p. 9040, Section 4.6(a)(1).

The State’s proposed compact defines the Tribal Nation Grant Fund as

follows:

The “Tribal Nation Grant Fund” is a fund created by the Legislature to make discretionary distribution of funds to Non-Gaming Tribes and Limited-Gaming Tribes upon application of such tribes for purposes related to effective self-governance, self-determined community, and economic development. The fiscal operations of the Tribal Nation Grant Fund are administered by the State Gaming Agency, which acts as a limited trustee, not subject to the duties and liabilities contained in the California Probate Code, similar California or federal statutes, rules or regulations, or under California or federal common law or equitable principles, and with no duties or obligations hereunder except for the receipt, deposit, and distribution of monies paid by gaming tribes for the benefit of Non-Gaming Tribes and Limited-Gaming Tribes, as those payments are directed by a State Designated Agency. The State Gaming Agency shall allocate and disburse the Tribal Nation Grant Fund monies as specified by a State Designated Agency to one (1) or more eligible Non-Gaming Tribe or Limited-Gaming Tribe upon a competitive application basis. The State Gaming Agency shall exercise no discretion or control over, nor bear any responsibility arising from, the

17

The State first raised the issue of the TNGF provision before formal negotiations began, RON,

p. 34, included the TNGF provision in its first draft compact, RON, pp. 1643, Section 4.8(a)(1),

pp. 1648-1649, Section 5.1(b), and continued to insist upon the provision throughout the

negotiations, RON, p. 9040, Section 4.6(a)(1), RON, p. 9046, Section 5.1(b).




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recipient tribes’ use or disbursement of Tribal Nation Grant Fund monies.

RON, p. 9046, Section 5.1(b).

Under the IGRA, a court “shall consider” any demand by the State that a

tribe pay a tax or fee to the state to engage in class III gaming “as evidence that the

State has not negotiated in good faith.” 25 U.S.C. § 2710(d)(7)(B)(iii)(II). In

Coyote Valley II and Rincon, the Ninth Circuit established the criteria for

determining when the inclusion of a tax or fee in a gaming compact is permissible

and when it is not.

In Coyote Valley II, the court found that a provision in the 1999 Compact

requiring payment of a fee into a Revenue Sharing Trust Fund (“RSTF”) and a

Special Distribution Fund (“SDF”) did not constitute a prohibited tax under the

IGRA. Coyote Valley II, 331 F.3d at 1112-1115. The Coyote Valley II court upheld

the RSTF and SDF fees reasoning that: (1) the RSTF provision had “originated in

proposals by the tribes,” (2) the fees were “directly related to the operation of

gaming activities,” (3) the payment of the fees fulfilled the purposes for which the

IGRA was enacted, and (4) the State offered meaningful concessions in return for

its demands. Id.

Later, in Rincon, the Ninth Circuit considered whether the State’s demand

for the payment of a fee into the State’s General Fund in exchange for an increase

in the number of slot machines constituted a prohibited tax or fee under the IGRA.

Rincon, 602 F.3d at 1022. To do so, the court applied the Coyote Valley II test to

determine whether the State acted in bad faith by demanding the revenue sharing

provision. Id. at 1033. The court held that “general fund revenue sharing is not

‘directly related to the operation of gaming activities’ and is thus not an authorized

subject of negotiation under § 2710(d)(3)(C)(vii),’” and, therefore, it was

prohibited by the IGRA. Id. at 1034, quoting 25 U.S.C. § 2710(d)(3)(C)(vii).




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Like Rincon, the State’s demand that the Tribes fund the TNGF fails to meet

the Coyote Valley II criteria. First, the Tribes did not propose the TNGF. On the

contrary, the Tribes opposed the establishment of the TNGF and the payment of a

fee or tax to fund the TNGF from the moment it was first proposed by the State by

excluding it from their initial draft compact. RON, pp. 2134-2136, Section 4.3.2

and Section 4.3.2.1, pp. 2136-2139, Section 5.1 and Section 5.2. The Tribes

objected to the TNGF and clearly communicated their strong opposition to the

State throughout the entire compact negotiations period. See, e.g., RON, p. 3475,

pp. 4689-4690.

Second, TNGF fees, unlike the fees paid into the RSTF and SDF in Coyote

Valley II, are not to be used for purposes that are directly related to gaming. In fact,

the California statute establishing the TNGF expressly prohibits the use of grant

funds for matters that are related to gaming activities. “A grant shall not be used to

pay a per capita distribution to tribal members or an investment in a purpose or

project related to any gaming operation or activity.” Cal. Gov. Code § 12019.40(d).

Instead, the eligible purposes of the TNGF include, but are not limited to:

development of curricula in a tribal language or culture, housing, support for compliance with the federal Indian Child Welfare Act, vocational training, community development, investments in tribal schools and colleges, support of tribal-government institutions and tribal courts, non-gaming economic diversification or investment in public health, information technology, renewable energy, water conservation, cultural preservation or awareness, educational programs, or scholarships.

Cal. Gov. Code § 12019.40(c). While these may be worthy purposes, none is

related to the operation or regulation of class III gaming activities.

Payments into the TNGF also do not further the purposes of the IGRA,

which is “intended to promote tribal development, prevent criminal activity related

to gaming, and ensure that gaming activities are conducted fairly.” Rincon, 602

F.3d at 1034. The TNGF would collect revenue from the Tribes for use by other




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tribes, as determined by the State, thereby reducing tribal self-sufficiency and the

development of strong tribal governments by displacing the direct use of those

funds by tribes on their own reservations for their own purposes. This was not the

intent of the IGRA—to tax and bestow gaming revenues on other tribes through

the states.

Finally, as discussed in greater detail in the next section, the State has not

offered the Tribes any meaningful concession in exchange for the TNGF fee. Thus,

the State’s demand that the Tribes pay the TNGF fee is evidence that the State did

not negotiate with the Tribes in good faith. Id. at 1032.

1. The State Failed to Negotiate in Good Faith

when it Demanded the Payment of a Tax and

Did not Offer a Meaningful Concession in

Exchange.

Assuming that the State’s demand for the payment of a tax or fee into the

TNGF is directly related to class III gaming activities, which it is not, the State’s

conduct nevertheless constitutes a failure to negotiate in good faith because the

State did not offer any meaningful concessions in exchange for its fee demand.

RON, pp. 2950-2951; SUF ¶¶ 73-74.

In Coyote Valley II, the Ninth Circuit held that the State did not negotiate the

1999 Compacts in bad faith by demanding that a tribe pay the State a tax or fee

because the State offered a meaningful concession (i.e., exclusivity) in exchange

for negotiating over the tax. Coyote Valley II, 331 F.3d at 1111. Conversely, in

Rincon, the Ninth Circuit found that the State had offered no meaningful

concessions in exchange for its demand for a tax and, therefore, “a finding of bad

faith [was] the only reasonable conclusion.” Rincon, 602 F.3d at 1036. Under the

standard established in Rincon, for a state to claim that a concession has been

“meaningful” to justify a fee demand, the concession must be “exceptionally

valuable” to the tribes, must be “bargained for,” and must fulfill the purposes for




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which the IGRA was enacted. Id. at 1035-1036. The concession cannot be offered

in exchange for provisions that the State has an obligation to negotiate over or for

exclusivity, which the Tribes already received under Proposition 1A.18

Id. at 1036-

1042.

Under Coyote Valley II, the State could have offered a meaningful

concession in exchange for insisting that the Tribes pay a tax into the TNGF. The

State made no such offer, even though the Tribes repeatedly informed the State

they would not pay the State a prohibited tax under IGRA unless they received a

meaningful concession that they were not otherwise entitled to under State and

federal law. For years, the Tribes negotiated with the State in good faith with the

anticipation that the State would offer the Tribes meaningful concessions. Such an

offer never came. RON, pp. 2950-2951, 7321-7322.

Instead, during the negotiations, the State asserted that it was providing

meaningful concessions that justified the tax. RON, p. 8315. The State claimed that

those concessions were the bundle of benefits the Tribes already received under the

1999 Compact. Id. The State made the same argument in Rincon. In Rincon, the

State argued that the tribe was receiving meaningful concessions in the form of

exclusivity and the bundle of other rights the tribe received under the offered

compact. The Ninth Circuit, however, soundly rejected the State’s argument

because: (1) the tribe already had exclusivity under the California Constitution and,

therefore, exclusivity was not a new concession, Rincon, 602 F.3d at 1037; and (2)

the State does not make “‘meaningful concessions’ whenever it offers a bundle of

rights more valuable than the status quo.” Id. at 1040. Therefore, the State’s

18

Id. at 1037 (“. . . it is clear that the State cannot use exclusivity as new consideration for new

types of revenue sharing since it and the collective tribes already struck a bargain in 1999,

wherein the tribes were exempted from the prohibition on gaming in exchange for their

contributions to the RSTF and SDF.”) (emphasis added).




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position that the 1999 Compact provisions provided the meaningful concession

required by Coyote Valley II fails.

Because a state’s attempt to impose a tax or fee on a tribe in order to engage

in gaming is evidence of bad faith and because the State failed to offer the Tribes

meaningful concessions in exchange for its demands for the payment of a tax to

fund the TNGF, the State failed to negotiate in good faith.

This conclusion is further compelled by the State’s negotiation posture. The

State took more than just a hard line approach with the Tribes—it “never wavered”

from its demands.19

Id. at 1038-1039 (“We hold only that a state may not take a

‘hard line’ position in IGRA negotiations when it results in a ‘take it or leave it

offer’ to the tribe to either accept non-beneficial provisions outside the permissible

scope of §§ 2710(d)(3)(C) and 2710 (d)(4), or go without a compact”) (emphasis in

original).

Consequently, by insisting that the Tribes’ replacement compacts contain the

TNGF provision, the State did not negotiate in good faith. Id. at 1036.

IV. THE STATE CANNOT, AS A MATTER OF LAW, OFFER A

MEANINGFUL CONCESSION IN EXCHANGE FOR COMPACT

PROVISIONS THAT EXCEED THE SCOPE PERMITTED BY THE

IGRA.

The foregoing analysis addressed the conditions under which a meaningful

concession from a state can allow for the inclusion of a revenue sharing provision

in a gaming compact. A meaningful concession cannot, however, be exchanged for

the inclusion of provisions that fall outside of the scope of the seven permissible

compact subjects identified in 25 U.S.C. § 2710(d)(3)(C).20

19

See RON, p. 34, RON, p. 1643, RON pp. 1648-1649, RON, p. 9040, and RON, p. 9046. 20

At the negotiation table, the CTSC tribes took the position that they were willing to negotiate

over topics of negotiation that the tribes contended were improper, based on the belief that the

State would, in the foreseeable future, offer a meaningful concession in exchange therefor

(which it never did). See, e.g., RON, pp. 2950-2951, 7321-7322. The CTSC tribes’ position was

based on a misapprehension that stemmed from language from two district court cases, Big




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As discussed above, the “meaningful concessions” analysis was originally

created by the Ninth Circuit in Coyote Valley II—the words “meaningful

concessions” are not found within the IGRA itself. In Coyote Valley II, the plaintiff

tribe contended that revenue sharing provisions contained in the 1999 compacts

violated 25 U.S.C. § 2710(d)(4), which provides that “nothing in this section shall

be interpreted as conferring upon a State or any of its political subdivisions

authority to impose any tax, fee, charge, or other assessment upon an Indian tribe

or upon any other person or entity authorized by an Indian tribe to engage in a

class III activity.” Coyote Valley II, 331 F.3d at 1112. In rejecting the tribe’s

argument, the Ninth Circuit focused its analysis on the language of Section

2710(d)(4), specifically the phrase “authority to impose.” Id. at 1111-1112. The

court ruled that California’s fee demands did not violate the IGRA because they

were directly related to gaming and the State had not “imposed” the fees:

We do not hold that the State could have, without offering anything in return, taken the position that it would conclude a Tribal-State compact with Coyote Valley only if the tribe agreed to pay into the RSTF. Where, as here, however, a State offers meaningful concessions in return for fee demands, it does not exercise “authority to impose” anything. Instead, it exercises its authority to negotiate, which IGRA clearly permits.

Lagoon, 759 F. Supp. 2d at 1162 and North Fork Rancheria of Mono Indians v. California, No.

1:15-cv-00419-AWI-SAB, 2015 U.S. Dist. LEXIS 154729 fn. 19 at *31 (E.D. Cal. Nov. 13,

2015), that conflicts with the court’s analysis in Rincon. That confusion led the tribes to believe

that improper subjects could, in fact, be exchanged for meaningful concessions. Nevertheless, the

CTSC tribes’ misconstruction of the state of the law does not provide a legal basis for concluding

that the State negotiated in good faith. See Rincon 603 F.3d at 1041 (“We therefore hold that

good faith should be evaluated objectively based on the record of negotiations, and that a state’s

subjective belief in the legality of its requests is not sufficient to rebut the inference of bad faith

created by objectively improper demands.”); Mashantucket Pequot Tribe v. Connecticut, 913

F.2d at 1032-33 (“The State’s protestations that its failure to negotiate resulted from sincerely

held views as to the meaning of the IGRA, and that it declared its willingness to resolve these

legal issues of first impression by litigation, do not alter the outcome. The statutory terms are

clear, and provide no exception for sincere but erroneous legal analyses.”). Moreover, because

the State never offered any meaningful concession in exchange for any provision of the compact,

the CTSC tribes’ misapprehension has no relevance to the claims now before the Court.




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Id. at 1112 (emphasis in original).

The “meaningful concessions” analysis thus applied only where a state had

offered “meaningful concessions in return for fee demands,” id. (emphasis added),

because the state, under 25 U.S.C. § 2710(d)(4), was without “authority to impose

any tax, fee, charge or other assessment upon an Indian tribe.” Id. at 1111

(emphasis in original).

The Coyote Valley II court’s analysis of revenue sharing fee demands under

Section 2710(d)(4) was distinct from its analysis of state demands that tribes

include provisions that fall outside of the permissible topics of negotiation. In the

latter half of the Coyote Valley II decision, after noting that Congress “limit[ed] the

proper topics for compact negotiations to those that bear a direct relationship to the

operation of gaming activities,” id., the Ninth Circuit analyzed whether the State

had failed to negotiate in good faith by requiring the plaintiff tribe to agree to a

labor relations ordinance that the tribe had claimed was impermissible under 25

U.S.C. § 2710(d)(3)(C). Id. at 1115. Ruling against the tribe, the Ninth Circuit

concluded that that the labor relations ordinance fell “within the scope of §

2710(d)(3)(C)(vii)” and negotiation of the provision was not, therefore, bad faith.

Id. The Ninth Circuit did not apply the meaningful concession analysis to the labor

relations ordinance. See id. at 1115-1117.

The conclusion that the State cannot, in good faith, insist that the Tribes

negotiate over subjects that are not contemplated by 25 U.S.C. § 2710(d)(3)(C)—

even in exchange for a meaningful concession—is bolstered by the Ninth Circuit’s

decision in Rincon.

The language and structure of § 2710(d)(3)(C) suggests it is exhaustive. There are seven categories of what “may” be negotiated. Although “may” indicates permissiveness as the dissent explains, to grant permission is not necessarily to grant carte blanche. What is “permitted” is limited. Section 2710(d)(3)(C)(vii) explicitly addresses unenumerated topics, but limits them to those “directly related” to gaming. See Wisconsin v. Ho-Chunk Nation, 512 F.3d 921, 933-34 (7th Cir.




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2008) (reading § 2710(d)(3)(C) as exhaustive for jurisdictional purposes)[.]

Rincon, 602 F.3d at 1028, n.9 (emphasis added).

After acknowledging the narrow range of topics permitted by the IGRA, the

Rincon court did not apply the meaningful concession analysis to provisions falling

outside of the permitted topics and did not hold that a meaningful concession could

grant the State the right to insist upon the inclusion of topics other than those

enumerated in 25 U.S.C. § 2710(d)(3)(C). A state’s insistence on the inclusion of a

provision that does not fall with the listed permissible topic, with or without an

offer of a meaningful concession, thus, is evidence of bad faith.

District courts within the Ninth Circuit have reached the same conclusion.

“An attempt to negotiate (or refusal to negotiate based on) topics not enumerated

in § 2710(d)(3)(C) violates a state’s duty to negotiate in good faith.” North Fork

Rancheria of Mono Indians v. California, No. 1:15-cv-00419-AWI-SAB, 2015

U.S. Dist. LEXIS 154729 at *30. An attempt to negotiate topics outside of §

2710(d)(3)(C) is “strong, if not determinative, evidence of bad faith.” Fort Indep.

Indian Cmty., 679 F. Supp. 2d at 1172.21

The State’s demand that the Tribes negotiate over and accept the compact

provisions that are not included in 25 U.S.C. § 2710(d)(3)(C), therefore, amounts

to per se bad faith. Id.

21

Chemehuevi Indian Tribe v. Newsom, 919 F.3d 1148 (9th Cir. 2018) is not in conflict with these cases. In Chemehuevi the Ninth Circuit held that the term provision in the 1999 Compact was a proper subject of negotiations under the IGRA because § 2710(d)(1)(c) required the compact to be “in effect for [a] class III gaming activity to lawfully occur”, and therefore, when the playing of the games started and stopped was “directly related to the operation of gaming activities.” Id. at 1152. The Court’s statement, however, that “Bay Mills suggested a broad view of negotiable subjects,” Id. at 1153, does not change the fact that the “subjects” must still fall within the enumerated topics of § 2710(d)(3)(c) and be “directly related to the operation of gaming activities.”




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V. THE DEEMED APPROVED LETTERS ISSUED BY THE

SECRETARY OF THE INTERIOR PROVIDE FURTHER

SUPPORT FOR THE CONCLUSION THAT THE STATE

HAS NOT NEGOTIATED IN GOOD FAITH.

A review of the federal government’s treatment of California’s class-III

gaming compacts supports the conclusion that the State has failed to negotiate in

good faith. A tribal-state compact governing the conduct of class III gaming

activities “shall take effect only when notice of approval by the Secretary [of the

Interior] of such compact has been published by the Secretary in the Federal

Register.” 25 U.S.C. § 2710(d)(3)(B). IGRA authorizes the Secretary “to approve

any Tribal-State compact entered into between an Indian tribe and a State

governing gaming on Indian lands of such Indian tribe.” 25 U.S.C. §

2710(d)(8)(A). The Secretary may disapprove a compact if such compact violates

“(i) any provision of [the IGRA], (ii) any other provision of Federal law that does

not relate to jurisdiction over gaming on Indian lands, or (iii) the trust obligations

of the United States to Indians.” 25 U.S.C. § 2710(d)(8)(B). “If the Secretary does

not approve or disapprove a compact . . . before the date that is 45 days after the

date on which the compact is submitted to the Secretary for approval, the compact

shall be considered to have been approved by the Secretary, but only to the extent

the compact is consistent with the provisions of this chapter.” 25 U.S.C. §

2710(d)(8)(C).

Congress, thus, has established a decision-forcing mechanism that requires

the Secretary to approve or disapprove each compact within 45 days of submission.

Id. Through Section 2710(d)(8)(C), Congress gave the Secretary the option to do

nothing and allow compacts to be considered approved by operation of law

(commonly referred to as “deemed-approved” compacts).

The purpose of Section 2710(d)(8)(C) is to prevent decisions on gaming

compacts from languishing. The Secretary, however, has put Section

2710(d)(8)(C) to use in a way that Congress likely did not anticipate.




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In Seminole Tribe v. Florida, 517 U.S. 44 (1996), the Supreme Court

concluded that Congress did not effectively waive Florida’s Eleventh Amendment

sovereign immunity in IGRA to allow tribes to sue states to compel them to engage

in good faith compact negotiations. That decision placed the Secretary in a difficult

situation when deciding whether to approve or disapprove compacts that contain

provisions that the Secretary concludes violate IGRA. On the one hand, if the

Secretary approves a compact providing for the payment of an impermissible tax

or a compact with provisions that are outside of the scope of the permissible

subjects of negotiation, he would be complicit in undermining the requirements of

the IGRA—the Secretary would appear to be lending the Executive Branch’s

support to the assertion that such compact provisions are legal. On the other hand,

if the Secretary disapproves a compact because it provides for revenue sharing

with a state or exceeds the scope of the permissible subjects of negotiation, the

tribe might not be able to compel the state to reengage in negotiations for a

compact that complies with the IGRA, as a result of the Seminole decision.

Without a compact, a tribe is not authorized to conduct class III gaming at all. The

Secretary’s disapproval, thus, could have the unintended effect of preventing a

tribe from conducting class III gaming that it would otherwise have the right to

conduct under the IGRA.

The Secretary has used Section 2710(d)(8)(C) to escape this quandary by

allowing compacts to take effect without affirmatively approving, and thus

legitimizing, illegal compact provisions. The Secretary has declined to issue an

affirmative approval or disapproval on more than 75 occasions. He has

simultaneously issued letters setting forth legal objections to the provisions of the




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compacts that he has concluded are in violation of the IGRA (commonly referred

to as “deemed approved letters”).22

The deemed approved letters are relevant here because they provide further

support for the conclusion that the State has failed to negotiate with the Tribes in

good faith. They reveal that the State has engaged in a concerted effort to use the

compacting process to improperly expand its jurisdictional reach over California

Indian tribes on their reservations and that the State is fully aware that those

provisions are impermissible. The letters also lend further support to the

conclusion that the meaningful concession analysis only applies to revenue sharing

provisions.

A. The Deemed Approved Letters Reveal that the State

is Using the Compact Negotiation Process to

Improperly Expand its Regulatory Authority Over

the Tribes’ On-Reservation Activities.

Since 2005, 50 compacts and compact amendments between the State and

California Indian tribes have been negotiated, executed, and submitted to the

Secretary for approval under Section 2710(d)(8)(A). With only one exception, a

minor amendment to a compact,23

the Secretary has refused to approve any of

those compacts.

In refusing to approve the California compacts, the Secretary issued deemed

approved letters stating that specific provisions in the compacts submitted by

California tribes impermissibly exceed the scope of the proper subjects of

22

The Tribes file herewith a Request for Judicial Notice seeking judicial notice of all of the

deemed approved letters cited to in this memorandum of points and authorities. 23

The only approval (issued with a short, two-paragraph letter) was a technical amendment to a

compact that minimally altered certain revenue sharing obligations. Letter from Kevin

Washburn, Assistant Sec’y for Indian Affairs, U.S. Department of the Interior, to the Hon. Adam

Dalton, Chairperson, Jackson Band of Miwuk Indians (Oct. 16, 2015), RJN, Ex. 3. The letter

only addressed review and approval of the technical amendment to the compact—not the entire

compact. Id.




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negotiation set forth in Section 2710(d)(3)(C). Notwithstanding the Secretary’s

conclusions, most of the provisions that have caused the Secretary to withhold

federal approval were included in the draft replacement compacts that the State

proffered to the Tribes.

The deemed approved letters identify a number of impermissible provisions

in the compacts submitted since 2005. See, e.g., Letter from Larry Echo Hawk,


Sherry Treppa Bridges, Chairperson, Habematolel Pomo of Upper Lake (Aug. 31,

2011), RJN, Ex. 2, pp. 7-8 (“[W]e have significant concerns about whether Section

11 of the Compact, when coupled with its definition of both ‘Gaming Facility’ and

‘Project,’ exceeds the scope of provisions tribes and states may include in a Class

III gaming compact under IGRA. . . . Nothing in IGRA or its legislative history

indicates that Congress intended to allow gaming compacts to be used to expand

state regulatory authority over tribal activities that are not directly related to the

conduct of Class III gaming.”); Letter from Donald E. Laverdure, Acting Assistant

Sec’y for Indian Affairs, U.S. Department of the Interior, to the Hon. Greg Sarris,

Chairman, Federated Indians of Graton Rancheria (Jul. 13, 2012), RJN, Ex. 1, pp.

11-12 (“We have also determined that Section 12.3(a),(b) of the Compact attempts

to regulate activities outside the scope of those prescribed under 25 U.S.C. §

2710(d)(3)(C). . . . While the Tribe’s provision of food, beverages, and drinking

water to its patrons may occur on the same parcel on which it conducts class III

gaming, it does not necessarily follow that such activities are ‘directly related to

the operation of gaming activities’ under IGRA. 25 U.S.C. § 2710(d)(3)(C)(vii). . .

. We cannot approve a tribal-state compact that purports to interfere with tribal

regulation of community planning and land use, for example, or that regulates

certain activities in a manner that only indirectly relates to tribal gaming

operations.”); Letter from Kevin Washburn, Assistant Sec’y for Indian Affairs,

U.S. Department of the Interior, to the Hon. Adam Dalton, Chairperson, Jackson




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Band of Miwuk Indians (Oct. 16, 2015), RJN, Ex. 3 pp. 1, 4 (“[T]he Compact

appears to include provisions involving non-gaming activities that may exceed the

lawful scope of State authority in gaming compacts under IGRA. . . . The clear

purpose of IGRA was to give states an opportunity to negotiate a role to address

potential harms that are unique to gaming activity, not more general affects that

would arise as to any economic activity.”). See also Letter from Kevin Washburn,


Nick Fonseca, Chairman, Shingle Springs Band of Miwok Indians (Jul. 15, 2013),

RJN, Ex. 6, pp. 10-11; Letter from Kevin Washburn, Assistant Sec’y for Indian

Affairs, U.S. Department of the Interior, Hon. Russell Attebery, Chairman, Karuk

Tribe (Nov. 12, 2014), RJN, Ex. 4, p. 4; Letter from Kevin Washburn, Assistant

Sec’y for Indian Affairs, U.S. Department of the Interior, Hon. Anthony R. Pico,

Chairman, Viejas Group of Capitan Grande Band of Mission Indians of the Viejas

Reservation (Dec. 1, 2014), RJN, Ex. 7, p. 1.

In an October 2016 deemed-approved letter, the Principle Deputy Assistant

Secretary–Indian Affairs expressed the Department of the Interior’s “significant

concern” arising from the State’s continuing insistence on including compact

provisions that the State is well aware exceed the scope permitted by IGRA:

We have repeatedly warned the State and other California tribes that the Compact’s definitions of “Gaming Facility” and “Project” cause us significant concern because the Compact could be misconstrued to allow the State to regulate matters that are not directly related to gaming activities. . . . When read together with the provisions of Section 11 that require the Tribe to take certain actions before the commencement of any project, the definitions of “Gaming Facility” and “Project” may encompass an impermissibly expansive range of activities that would not be directly related to gaming.

***

The definitions remain broader than IGRA’s requirement that compacts may regulate only those activities that are “directly related to the operation of gaming activities.” . . . We think that it is important to ensure that states have




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an opportunity to address legitimate gaming regulatory concerns, but our job is to prevent states from using compacts to take more control on Indian reservations than Congress offered.

Letter from Lawrence Roberts, Principle Deputy Assistant Sec’y for Indian

Affairs, U.S. Department of the Interior, Hon. Robert J. Welch, Jr., Chairman,

Viejas (Baron Long) Group of Capitan Grande Band of Mission Indians of the

Viejas Reservation (Oct. 21, 2016), RJN, Ex. 8, p. 4 (emphasis added).

In the same letter, the Department also expressed concern regarding the uses

for which the compact permitted the State to expend revenue sharing monies paid

into the Special Distribution Fund. Id. “We are concerned that the State is funding

units of State government by including them within the Compact without analyzing

whether their inclusion or the activities they actually carry out are justified as

directly related to, and necessary for, the licensing and regulation of tribal

gaming.” Id.

The deemed approved letters issued since 2005, thus, reveal that the State

has intentionally violated IGRA by including in gaming compacts provisions that

extend the State’s regulatory reach over tribal activities far beyond what is

permitted by the IGRA. That same pattern continued throughout the State’s

negotiations with the Tribes here.

The definitions of “Gaming Facility” and “Project” in the draft compacts

submitted to the Tribes are virtually indistinguishable from those in the Shingle

Springs, Viejas Group of Capitan Grande Band, Upper Lake, and Jackson

compacts, as are the environmental mitigation provisions that underlay the

Secretary’s concerns about those definitions. Compare RON, p. 9032, Section 2.13

and p. 9035, Section 2.25 with Shingle Springs Band of Miwok Tribal-State

Compact, RJN, p. 3, Sections 2.10 and 2.20, Viejas Group of Capitan Grande Band

of Mission Indians Tribal-State Compact, RJN, p. 6, Sections 2.9 and 10.8.7(a),

Habematolel Pomo of Upper Lake Tribal-State Compact, RJN, p. 3, Sections 2.10




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and 2.20, Jackson Band of Miwuk Indians Tribal-State Compact, RJN, p. 4,

Sections 2.12 and 2.22. The State’s demand that the Tribes include provisions

imposing California workplace and minimum wage standards and the enforcement

of family support orders in their compacts is a more profound intrusion into tribal

activities than the health and safety standards that the State imposed on Graton

Rancheria’s food and beverage services. Compare RON, pp. 9129-9137, Section

12.3, pp. 9144-9145, Section 12.6(d) with Federated Indians of Graton Rancheria

Tribal-State Compact, RJN, p. 3, Section 12.3. The provisions of the State’s draft

compacts that require the Tribes to participate in the TNGF, like the provisions of

the Viejas Compact that improperly authorized the funding of units of State

government with Special Distribution Fund money, are not directly related to, or

necessary for, the licensing and regulation of tribal gaming. RON, p. 9040, Section

4.6(a)(1), RON, p. 9046, Section 5.1(b); Viejas Band of Kumeyaay Indians Tribal-

State Compact, RJN, p. 7, Section 4.3.1.

The gaming compacts submitted by California tribes since 2005 and the

deemed approved letters addressing those compacts reveal that, over the past 14

years, the State has engaged in a concerted effort to expand its general regulatory

authority over California tribes on their reservations through the tribal-state

compacting process, an outcome Congress specifically prohibited. S. REP. 100-

446 at 13-14 (1988), as reprinted in 1988 U.S.C.C.A.N. 3071, 3083-84.

The State’s practice of including provisions in gaming compacts that it is

aware violate the IGRA is compelling evidence that the State failed to negotiate

with the Tribes in good faith.

B. The Deemed Approved Letters Support the

Conclusion that the Meaningful Concession Analysis

only Applies to Revenue Sharing Provisions.

A review of the deemed-approved letters issued by the Secretary also

provide support for the conclusion that the State can offer meaningful concessions




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only to justify the payment of a tax—not to justify demands for compact provisions

that exceed the scope of 25 U.S.C. § 2710(d)(3)(C). In every deemed-approved

letter issued for a California tribal-state compact since Rincon, the Secretary

distinguished his analysis of whether the revenue sharing compact provisions are

lawful from his analysis of whether other compact provisions are not lawful

because they exceed the scope permitted by the IGRA. The Secretary has not once

applied the meaningful concession analysis when examining whether a particular

compact provision exceeds the proper subjects of negotiation permitted by §

2710(d)(3)(C).

One example of the bifurcated analysis applied by the Secretary is the July

13, 2012 letter from Donald E. Laverdure to Greg Sarris, Chairman, Federated

Indians of Graton Rancheria. RJN, Ex. 1. In Section 1 of the analysis, the Secretary

stated: “We review revenue sharing provisions in gaming compacts with great

scrutiny. Our analysis as to whether such provisions comply with IGRA first

requires us to determine whether the State has offered meaningful concessions to

the Tribe.” Id. at p. 6. That analysis differs from the analysis applied in Section 2.

“Permissible Subjects of Compact Negotiation[.] The Compact contains several

notable provisions that implicate the limitations on compact negotiations

prescribed by Congress in IGRA.” Id. at p. 9. Other examples of the Secretary

distinguishing between revenue sharing provisions and impermissible topics of

negotiation include: Letter from Kevin Washburn, Assistant Secretary–Indian

Affairs, to the Honorable Adam Dalton, Chairperson, Jackson Band of Miwuk

Indians (Oct. 16, 2015), RJN, Ex. 3; Letter from Kevin Washburn, Assistant

Secretary–Indian Affairs, to the Honorable Nick Fonseca, Chairman, Shingle

Springs Band of Miwok Indians (Jul. 15, 2013), RJN, Ex. 6; Letter from Kevin

Washburn, Assistant Secretary–Indian Affairs, to the Honorable Russell Attebery,

Chairman, Karuk Tribe (Nov. 12, 2014), RJN, Ex. 4.




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The deemed approved letters thus reveal that it is the Secretary’s

interpretation that only revenue sharing provisions are subject to the meaningful

concession exception. The State, therefore, failed to negotiate in good faith by

demanding that the Tribes negotiate over, and ultimately accept, provisions that

exceed the scope permitted by 25 U.S.C. § 2710(d)(3)(C).

CONCLUSION

[W]e are . . . keenly aware of our nation’s too-frequent breach of its trust obligations to Native Americans when some of its politically and economically powerful citizens and states have lusted after what little the Native Americans have possessed. In developing IGRA, Congress anticipated that states might abuse their authority over compact negotiations to force tribes to accept burdens on their sovereignty in order to obtain gaming opportunities. . . . That is why the good faith requirement exists[.]

Rincon, 602 F.3d at 1042.

For five years, the State of California has performed a masterful sleight of

hand. The State has done its best to appear “ready and willing to engage in the

good-faith negotiation process under the Indian Gaming Regulatory Act,” and has

emphasized such willingness whenever the Tribes have pushed for an actual

resolution to the negotiations. RON, pp. 10123-10124. But the State’s long game is

to run out the clock on negotiations and force tribes to agree to the State’s demands

under duress in order to avoid the termination of their compacts under the term

provision of the 1999 Compacts.

The record of negotiations reveals that, despite numerous in-person

negotiations and thousands of pages of proposals, the State has never given

substantive ground on any of its demands that provisions that violate the IGRA be

included in the replacement compacts. The State has given no such ground because

it has succeeded in getting tribes to agree to impermissible provisions over and

over again in the past. The fact that the State has been informed by the Secretary of

the Interior for 14 years that its gaming compacts include provisions that are in




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violation of the IGRA—including a number of the provisions that are at issue in

this case—has had and will have no impact on the State. As long as the State

believes that the threat of compact termination will force the Tribes to give up

more and more of their sovereign authority, it will do exactly what it has done

since at least 2005.

The only way that the State will engage in genuine good faith negotiations is

if a court forces the State to do so and “recalibrate[s] a balance that has tipped

drastically in favor of the states at the expense of tribal sovereignty.” Pueblo of

Sandia v. Babbitt, 47 F. Supp. 2d 49, 56-57 (D.D.C. 1999).

The Tribes respectfully request that Court: (1) declare that the State did not

negotiate with the Tribes in good faith by requiring the Tribes to negotiate over the

improper subjects the Tribes have objected to; (2) declare that the State did not

negotiate with the Tribes in good faith by requiring the Tribes to negotiate over a

tax without offering the Tribes a meaningful concession that has value to the

Tribes and that the State has no obligation to negotiate over under the IGRA; and

(3) order the State to conclude a compact with the Tribes within 60 days.

DATED: November 8, 2019 Respectfully Submitted,

RAPPORT AND MARSTON

By: /s/ Lester J. Marston

LESTER J. MARSTON, Attorney for the

Chicken Ranch Rancheria of Me-Wuk

Indians, the Chemehuevi Indian Tribe, the

Hopland Band of Pomo Indians, and the

Robinson Rancheria

DATED: November 8, 2019 DEHNERT LAW, PC

By: /s/ David Dehnert

David Dehnert, Attorney for the

Blue Lake Rancheria


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