No. 08-

IN THE-- ¯ " - L;i- THE- ULERK

Dupreme ourt o{ t[te i tnitel Dtatee

CATSKILL LITIGATION TRUST, CATSKILL DEVELOPMENT,L.L.C., MOHAWK MANAGEMENT, L.L.C., MONTICELLORACEWAY DEVELOPMENT COMPANY, L.L.C., JOSEPHBERNSTEIN, DENNIS VACCO, AND PAUL DEBARY,

Petitioners,V.

HARRAH’S OPERATING COMPANY, INC., ANDPARK PLACE ENTERTAINMENT CORPORATION

Respondents.

On Petition for a Writ of Certiorari to theUnited States Court Of Appeals

for the Second Circuit

PETITION FOR A WRIT OF CERTIORARI

January 16, 2009

DENNIS C. VACCO, ESQ.CRANE PARENTE AND CHERUBIN90 State StreetAlbany, NY 12207(518) 432-8000

JOSEPH E. BERNSTEIN ESQ.Counsel of Record

1045 Fifth AvenueNew York, NY 10028(917) 365-3651

Counsel for Petitioners

WILSON-EPES PRINTING Co., INC. - (202) 789-0096 - WASHINGTON, D. C. 20002

~|a~ eac~e

II.

QUESTIONS PRESENTED

Whether "Indian lands" must presently be heldin trust by the United States for the applica-tion of the Indian Gaming Regulatory Act of1988.

Whether Congress intended to prohibit Indiantribes from entering into precursory agree-ments to seek regulatory approval under theIndian Gaming Regulatory Act of 1988.

(i)

ii

PARTIES TO THE PROCEEDINGS

A number of Petitioners are listed in the caption,because they were appellants in the Court of Appeals.The real parties-in-interest are Petitioner CatskillLitigation Trust and Respondent Harrah’s OperatingCompany, Inc., successor by merger to RespondentPark Place Entertainment Corporation.

The Catskill Litigation Trust is represented by itstrustees: Dennis C. Vacco, formerly Attorney Generalof the State of New York, and Joseph E. Bernstein.The trustees are pursuing the claims of the Trust onbehalf of approximately 15,000 unit holders, includ-ing approximately 13,000 members of the St. RegisMohawk Tribe, whose interests are represented bythe St. Regis Mohawk Tribal Council as the govern-ing authority of the Tribe. The Tribal Council con-trols 50% of the Trust ownership units as Custodianfor tribal members.

Litigation claims against Respondent Park PlaceEntertainment Corporation were initiated in Novem-ber 2000 by Petitioners Catskill Development, LLC,Monticello Raceway Development, LLC, and MohawkManagement, LLC, in the United States DistrictCourt for the Southern District of New York. Theclaims were transferred in January 2004 to Peti-tioner Catskill Litigation Trust, a Delaware trustregistered with the Securities and Exchange Com-mission, in connection with a corporate reorganiza-tion of these entities with Empire Resorts, Inc., apublic company.

iii

RULE 29.6 STATEMENT

No publicly held company owns 10% or more of theownership units of the trust. Empire Resorts, Inc., apublic company, has contractual rights to a prioritydistribution of $10 million as a recovery of prior liti-gation costs.

Blank Page

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ............................... i

PARTIES TO THE PROCEEDINGS .................

RULE 29.6 STATEMENT ................................... iii

TABLE OF AUTHORITIES ................................xiii

DOCKETED CASES ..........................................xiv

STATUTES AND REGULATIONS ....................xiv

OTHER AUTHORITIES .....................................xv

PETITION FOR A WRIT OF CERTIORARI ...... 1

OPINIONS BELOW ............................................ 1

JURISDICTION .................................................. 2

WHY THE WRIT SHOULD BE GRANTED

A. Conflict between the Circuits - PetitionNo. 08-655 ................................................... 2

B. Negative Impacts of Catskill ......................4

STATEMENT ...................................................... 6

A. Introduction ................................................6

B. Derailment of a Tribal EconomicDevelopment Opportunity .........................8

C. Status of Regulatory Review as of April14, 2000 ......................................................13

ARGUMENT I .....................................................16

WHETHER "INDIAN LANDS" MUSTPRESENTLY BE HELD IN TRUST BYTHE UNITED STATES FOR THEAPPLICATION OF THE INDIAN GAM-ING REGULATORY ACT OF 1988 .........

(v)

vi

TABLE OF CONTENTS--Continued

Page

A. Regulatory Framework ..............................16

B. "Indian Lands" ...........................................17

C. "Indian lands" In the Ninth Circuit ..........17

D. "Indian lands" in the Second Circuit .........19

E. "Indian Lands" as a JurisdictionalRequirement ..............................................20

F. DOI and NIGC "Memorandum ofAgreement" .................................................22

G. Case Law Prior to Amendment of §81 .......24

H. Transporting Indian lands "Back fromthe Future" .................................................25

ARGUMENT II ....................................................27

WHETHER CONGRESS INTENDEDTO PROHIBIT INDIAN TRIBES FROMENTERING INTO PRECURSORYAGREEMENTS TO SEEK REGULA-TORY APPROVAL UNDER THEINDIAN GAMING REGULATORY ACTOF 1988 .....................................................27

A. Congressional Policy Favors TribalSelf Determination ..............................27

B. Precursory Agreements under theDCA and MA ........................................ 32

C. Collateral Agreements under IGRA ...33

CONCLUSION ....................................................35

A. "Indian lands" Are Necessary forApplication of IGRA ...................................35

vii

TABLE OF CONTENTS--Continued

Page

B. IGRA Supports Self Determination ..........

APPENDIX

Appendix A

Catskill Development, LLC v. Park PlaceEntertainment Corp., 547 F.3d 115 (2d Cir.2008) ("Catskill") ........ ...................................... la

DeBary v. Harrah’s Operating Company,Inc., 465 F. Supp. 2d 250 (S.D.N.Y. 2006)("Catskill V") .....................................................41a

Catskill Development, LLC v. Park PlaceEntertainment Corp., 217 F. Supp. 2d 423(S.D.N.Y. 2002)("Catskill IIF’) ......................... 79a

Catskill Development, LLC v. Park PlaceEntertainment Corp., 154 F. Supp. 2d 696(S.D.N.Y. 2001)("Catskill II") ..........................125a

Catskill Development, LLC v. Park PlaceEntertainment Corp., 144 F. Supp. 2d 215(S.D.N.Y. 2001)("Catskill I") ............................143a

Appendix B

National Indian Gaming Commission, Letterfrom Acting General Counsel William F.Grant, NIGC Mgmt. Contract ReviewPresident R.C.-St. Regis Mgmt. Co., January9, 2004 (unpub.) ...............................................192a

Appendix C

Guidiville Band of Pomo Indians v. NGVGaming, LTD., ("Guidiville") 531 F.3d 767(9th Cir. 2008) ..................................................197a

viii

TABLE OF CONTENTS--Continued

Page

Appendix I

Testimony of General Counsel (Acting)Penny Coleman, National Indian GamingCommission, before the Senate IndianAffairs Committee, Hearings on OffReservation Indian Gaming, July 27, 2005 ....309a

Appendix D

Murphy, Sean, "Casino Politics - Casino caseraises issue of money, politics." Boston Globe,page A-l, October 30, 2001 ..............................246a

Appendix E

Bagli, Charles, "Mohawks Sign New CasinoDeal, Leaving Catskill Plan in Limbo", NewYork Times, April 22 ........................................254a

Appendix F

United States Department of Interior, LetterRequest for Concurrence by GovernorGeorge E. Pataki, attaching "Two-Part"Determination Letter under 25 U.S.C.§2719(b)(1)(A), April 6, 2000 ...........................259a

Appendix G

Exclusivity Agreement between St. RegisMohawk Tribe and Park Place Entertain-ment Corporation, April 14, 2000 ....................299a

Appendix H

Memorandum of Agreement between Na-tional Indian Gaming Commission andDepartment of Interior, February 26, 2007,National Indian Gaming Commission ............303a

ix

TABLE OF CONTENTS--Continued

Page

Appendix N

National Indian Gaming Commission,Letter regarding Commentson GamingFacility Development andConstructionAgreement and Gaming Facility Manage-ment Agreement, April 19, 2000 .....................321a

Appendix O

National Indian Gaming Commission, Com-ments on Gaming Facility Development andConstruction Agreement and GamingFacility Management Agreement, April 19,2000 ..................................................................323a

Appendix J

Letter by Governor George E. Pataki toSupervisor Anthony Cellini, June 15, 1999 ....314a

Appendix K

Declaration of Senator Alfonse D’Amato,August 13, 2000 ...............................................316a

Appendix L

Definition of "Effective Date", Amended andRestated Gaming Facility Development andConstruction Agreement, Dated as of July31, 1996 ............................................................319a

Appendix M

Definition of "Effective Date", Amended andRestated Gaming Facility ManagementAgreement, Dated as of July 31, 1996 ............320a

X

TABLE OF CONTENTS--Continued

Page

Appendix P

National Indian Gaming Commission, Letterof Chief of Staff Barry Brandon, May 12,2000 ..................................................................333a

Appendix Q

Amended and Restated Gaming LandPurchase Agreement, Dated as of July 31,1996 ..................................................................335a

Appendix R

National Indian Gaming Commission, Letterfrom Deputy General Counsel Penny J.Coleman, to Delaware Tribe of Oklahoma,July 30, 2001 ....................................................377a

Appendix S

Affidavit of John F. O’Mara, Adviser toGovernor George E. Pataki on IndianGaming, May 23, 2002 .....................................380a

Appendix T

Affidavit of Patrick J. Kehoe, SeniorAssistant Counsel to Governor George E.Pataki, May 23, 2002 .......................................383a

Appendix U

National Indian Gaming Commission, Letterfrom General Counsel Kevin K. Washburn, toJames M. Wilson, Reed Smith, April 11,2002 ..................................................................385a

xi

TABLE OF CONTENTS--Continued

Page

Appendix V

Washburn, Kevin K., "The Mechanics ofIndian Gaming Management ContractApproval", 8 Gaming L.Rev. 333 (2004) .......... 389a

Appendix W

National Indian Gaming Commission, Letterof Director of Contracts Fred Stuckwisch,May 24, 2000 ...................................................424a

Appendix X

National Indian Gaming Commission, Letterof Director of Contracts Fred Stuckwisch,June 12, 2000 ...................................................425a

Appendix Y

Relevant Statutory Provisions ........................428a

Appendix Z

S. Rep. No. 106-150 (1999) (Amendment of15 US.C. 81 - Encouraging Indian EconomicDevelopment ....................................................445a

Appendix AA

United States Department of Interior,Comments on Master Amendment, March10, 2000, including Response of St. RegisMohawk Gaming Authority, March 14, 2000. 479a

Appendix BB

Bagli, Charles, "Deal Signed for Casino atOld Catskills Resort", New York Times, May2, 2000 .............................................................. 492a

xiiTABLE OF CONTENTS--Continued

Appendix CC

Bear Stearns & Co. Inc., Equity ResearchReport on Park Place EntertainmentCorporation, April 25, 2000 .............................

Page

495a

xiii

TABLE OF AUTHORITIES

CASES Page

A.K. Mgmt. Co. v. San Manuel Band ofMission Indians ("A.K.") 789 F.2d 785(9th Cir. 1986) .......................................... passim

Artichoke Joe’s v. Norton, 216 F. Supp. 2d1084, 1092 (E.D. Cal. 2002), affld, 353F.3d 712 (9th Cir. 2003), cert. denied,543 U.S. 815, 125 S. Ct. 51, 160 L. Ed.2d 20 (2004) ...............................................16

Catskill Development, LLC v. Park PlaceEntertainment Corp.

547 F.3d 115 (2d Cir. 2008)("Catskill") ...... passim144 F. Supp. 2d 215 (S.D.N.Y. 2001)

("Catskill I") ........................................... 2154 F. Supp. 2d 696 (S.D.N.Y. 2001)

("Catskill II") ......................................... 2217 F. Supp. 2d 423 (S.D.N.Y. 2002)

(Catskill III") ......................................... 2286 F. Supp. 2d 309 (S.D.N.Y. 2003)

("Catskill IV") ........................................ 2DeBary v. Harrah’s Operating Company,

Inc., 465 F. Supp. 2d 250 (S.D.N.Y.2006)("Catskill V") .................................... 2

First American Casino Corp. v. EasternPequot Nation 175 F. Supp. 2d 205(D.Conn. 2000) .......................................... 5

Forrest Assocs. v. Passamaquoddy Tribe,719 A.2d 535 (Me. 1998) ...........................24

Guidiville Band of Pomo Indians v. NGVGaming, LTD., ("Guidiville") 531 F.3d767 (9th Cir. 2008) ................................... passim

Mescalero Apache Tribe v. Jones, 411 U.S.145, 93 S. Ct. 1267, 36 L.Ed.2d114(1973)22

xiv

TABLE OF AUTHORITIES--Continued

Page

Passamaquoddy Tribe v. Maine, 75 F.3d784 (1st Cir. 1996) .....................................21

State of R.I.v. Narragansett Indian Tribe,19 F.3d 685, 702-03 (1st Cir. 1994) ..........21

Sungold Gaming, Inc. v. United Nations ofChippewa Indians of Mich, Inc., No.1:99-CV-181, 1999 WL 33237035 (W.D.Mich, June 7, 1999) ...................................20, 32

Trump Hotels & Casino Resorts Develop-ment Company, LLC v. Roskow, 2004U.S. Dist. LEXIS 5401 (D.Conn. 2004) ....20, 32

Vanadium Corp. of Am. v. Fidelity &Deposit Co. of Md., 159 F.2d 105 (2d Cir.1947) ..................................................... 30, 31, 32

DOCKETED CASES

Harrah’s Operating Company, Inc. v. NGVGaming, Ltd., Petition No. 08-655(November 12, 2008) ................................. 2

STATUTES AND REGULATIONS

The statutes and regulations are included asAppendix Y.

Statutes and regulations from Title 25 maybe cited by "Section --" or "§ --," omittingthe prefatory "25 U.S.C." or "25 C.F.R."

Statutes

1 U.S.C. §1 ...................................................passim18 U.S.C. §1151 ............................................2225 U.S.C. §81(a) ...........................................passim

TABLE

25 U.S.C.25 U.S.C.25 U.S.C.25 U.S.C.25 U.S.C.25 U.S.C.25 U.S.C.25 U.S.C.25 U.S.C.

OF AUTHORITIES--ContinuedPage

§81(b) ...........................................passim,§396a ............................................30§2703(4)(B) ..................................passim,82703(5) ........................................ 5§2710(a) ........................................ 172710(b) ..........................................222710(d) .........................................passim§2711(g) ........................................15, 29§2711(h) .....................................4, 26, 28

25 U.S.C. 82714 ............................................1, 6Regulations

15 C.F.R. Part 151 ........................................12, 1825 C.F.R.§502.5 ............................................29, 3425 C.F.R.§502.15 ..........................................3425 C.F.R.§533.1 ............................................3325 C.F.R.§533.7 ...........................................passim

OTHER AUTHORITIES

Memorandum ofNational Indianand Department

Agreement betweenGaming Commissionof Interior, February

26, 2007, National Indian GamingCommission Website at http://www.nigc.gov/ReadingRoom/IndianLandOpinions/tabid/120/Default.aspx .......................

National Indian Gaming Commission,Letter from General Counsel Kevin K.Washburn, to James M. Wilson, ReedSmith, April 11, 2002 ................................

National Indian Gaming Commission,Letter from Acting General CounselWilliam F. Grant, NIGC Mgmt. ContractReview President R.C.-St. Regis Mgmt.Co., January 9, 2004 (unpub.) ..................

22

15

34

xvi

TABLE OF AUTHORITIES--Continued

Page

National Indian Gaming Commission,Letter from Deputy General CounselPenny J. Coleman, to Delaware Tribe ofOklahoma, July 30, 2001 ..........................36

Restatement (Second) of Torts §245 cmt. A(1981)(Illustration 4) ................................31

Testimony of General Counsel (Acting)Penny Coleman, National IndianGaming Commission, before the SenateIndian Affairs Committee, Hearings onOff Reservation Indian Gaming, July 27,2005 ...........................................................35

S. Rep. No. 106-150 (1999) ......................... passimWashburn, Kevin K., "The Mechanics of

Indian Gaming Management ContractApproval", 8 Gaming L.Rev. 333 (2004)... 34

IN THE

nite tate

No. 08-

CATSKILL LITIGATION TRUST, CATSKILL DEVELOPMENT,L.L.C., MOHAWK MANAGEMENT, L.L.C., MONTICELLORACEWAY DEVELOPMENT COMPANY, L.L.C., JOSEPHBERNSTEIN, DENNIS VACCO, AND PAUL DEBARY,

Petitioners,V.

HARRAH’S OPERATING COMPANY, INC., AND

PARK PLACE ENTERTAINMENT CORPORATIONRespondents.

On Petition for a Writ of Certiorari to theUnited States Court Of Appeals

for the Second Circuit

PETITION FOR A WRIT OF CERTIORARI

Petitioners respectfully petition for a Writ of Cer-tiorari to review the judgment of the United StatesCourt of Appeals for the Second Circuit in CatskillDevelopment, LLC v. Park Place EntertainmentCorp., 547 F.3d 115 (2d Cir. 2008).

OPINIONS BELOW

The decision of the United States Court of Appealswas issued on October 21, 2008, in Catskill Develop-ment, LLC, v. Park Place Entertainment Corporation,

2

547 F.3d 115 (2d Cir. 2008). Summary Judgment infavor of Respondent was granted by the DistrictCourt in DeBary v. Harrah’s Operating Company,Inc., 465 F. Supp. 2d 250 (S.D.N.Y. 2006). Earlieropinions in the litigation include: Catskill Develop-ment, LLC v. Park Place Entertainment Corporation,at 144 F. Supp. 2d 215 (S.D.N.Y. 2001), 154 F. Supp.2d 696 (S.D.N.Y. 2001), 217 F. Supp. 2d 423(S.D.N.Y. 2002), 169 Fed. Appx. 658 (2d Cir. 2006),206 F.R.D. 78 (S.D.N.Y. 2002), 204 F. Supp. 2d 647(S.D.N.Y. 2002), 286 F. Supp. 2d 309 (S.D.N.Y. 2003),and 345 F. Supp. 2d 360 (S.D.N.Y. 2004).

JURISDICTION

The judgment of the court of appeals was enteredon October 21, 2008. This Court has jurisdictionpursuant to 28 U.S.C. § 1254(1). Jurisdiction in theDistrict Court was based on diversity, 28 U.S.C.§ 1332.

WHY THE WRIT SHOULD BE GRANTED

A. Conflict between the Circuits PetitionNo. 08-655

Respondent filed a Petition in Harrah’s OperatingCompany, Inc. v. NGV Gaming, Ltd., No. 08-655,for review of Guidiville Band of Pomo Indians v.NGV Gaming, LTD., 531 F.3d 767 (9th Cir. 2008)("Guidiville") (App. C, at 197a), on the basis of aconflict with the case that is the subject of thisPetition. ("Catskill", App. A, at la)

The Petitions involve claims by unrelated partiesagainst Respondent for tortious interference withagreements relating to gaming ventures in New Yorkand California. The controversy involves enforceabil-ity of agreements with Indian tribes for the purpose

3

of maintaining state tort claims for intentional inter-ference with contractual relations against Respon-dent. The outcome depends on whether the term"Indian lands" under §81 (Contracts and Agreementswith Indian Tribes) and §2703(4)(B) of The IndianGaming Regulatory Act of 1988 ("IGRA") requiresthat title to land be held in trust by the United Statesfor the benefit of a tribe, in order to invoke federaljurisdiction over the agreements and apply the con-tract voiding provisions under the two statutoryregimes; or, in the absence of trust lands, whethertitle may be brought to the United States "back fromthe future" under the Dictionary Act, 1 U.S.C. §1.Where applicable, the Dictionary Act includes thefuture tense whenever the present tense is used in afederal statute (unless the context requires a differ-ent interpretation), such that definitions that includeas "Indian lands" land that "is" held by the UnitedStates in trust may be interpreted to include landthat "will be" so held.

In June, 2008, the Ninth Circuit held in Guidivillethat the Dictionary Act does not apply to expand thedefinition of "Indian lands" under §81. In October,2008, the Second Circuit rejected Guidiville. TheCourt held that the Dictionary Act applied to expandthe "Indian lands" definition under §2703(4)(B) ofIGRA, after holding that "Indian lands" are in anycase not required for a contract to be void under Reg.§533.7. This regulation provides that unapprovedmanagement contracts are void.

The Second Circuit should have followed Guidiville.A trust relationship between the United States and atribe constitutes a jurisdictional nexus under IGRAfor the Chairman of NIGC ("Chairman") to be au-thorized to approve management contracts relating to

4

trust lands. The Chairman received his authority toapprove management contracts under IGRA pursu-ant to §2711(h), when the pre-existing authority ofthe Secretary of the Interior ("Secretary") to approvemanagement contracts under §81 was transferred tothe Chairman upon enactment of IGRA. The trustrelationship remains a jurisdictional foundation withrespect to the residual authority of the Secretaryto approve agreements under §81. As IGRA voidingregulation, Reg. §533.7, was founded under and con-tinues to be based on the purpose underlying theoriginal enactment of §81, to protect tribes fromunscrupulous elements who would take advantage ofthem, the statutes should have been construed in asimilar manner.

We respectfully ask the Court to grant our Petitionand to consider consolidation with Petition No. 08-655. Respondent is before the Court on a similarquestion of law in both cases and has asked theconflict to be resolved by the Court. We agree. Aconsistent ruling is appropriate under these circum-stances. Otherwise, Respondent will be whipsawed,winning one case and losing another on the samelegal issue, and one aggrieved party that filed similarclaims against Respondent will win while the otherwill lose under the same principle of law. In addition,there are a number of negative impacts generated bythe decision of the Second Circuit that warrant areversal.

B. Negative Impacts of Catskill

Catskill’s expanded definition of "Indian lands",incorporating hypothetical trust lands under theDictionary Act, is an anomaly. It would include as"Indian lands" land that may never be held in trustas a basis for creating current jurisdiction in NIGC

5

under IGRA (and DOI under §81) to approve agree-ments with tribes. The decision invites extrapolationto other definitions, such as whether a tribe seekingrecognition is an "Indian tribe" under §2703(5),’

or whether non-reservation lands should be treatedas an "Indian reservation". §2703(4)(B). None ofthese ’futuristic’ interpretations were contemplatedby Congress when it enacted specific and unambi-guous definitions of "Indian lands" under §§81 and2703(4)(B).

The Writ should be granted for the followingreasons:

1. The conflict creates uncertainty as to the statusof tribal agreements nationwide, for gaming andother purposes. Tribes need to be able to provideassurances to promoters, developers, and managers,who typically pay the tribe’s expenses, that theircommitments to seek regulatory approval are valid inorder to secure land positions and initial funding forplacing land into trust and approval of relatedagreements.

2. Catskill violates our nation’s policy to promotetribal self determination. Tribes will find pre-development financing opportunities unavailable orexpensive to obtain, hampering economic opportuni-ties.

3. Catskill contradicts the legislative history, stat-utes, court decisions, and policy of the United StatesDepartment of Interior ("DOI") and NIGC, all ofwhich require an existing government-to-government

1See, e.g., First American Casino Corp v. Eastern PequotNation, 175 F. Supp. 2d 205 (D. Conn. 2000)("Indian tribe" mustbe ’recognized’ under IGRA definition)

6

relationship between the United States and a tribe inorder to activate the trust responsibility of the UnitedStates.

4. Catskill increases the breadth of review thatNIGC and DOI must now entertain, to include agree-ments relating to non-Indian lands, without alegislative mandate.

5. Catskill will generate unintended consequences.If Indian lands are deemed to exist when title isactually held by non-Indians, or in fee simple by atribe, existing mortgages, leases and other agree-ments may become unenforceable as a result of theDictionary Act.

6. Catskill is inconsistent with guidance specific tothe instant case by NIGC, that it would not be appro-priate for the Chairman to approve the managementcontract before the land was held in trust.

7. Catskill also raises the question of whether Con-gress intended to prohibit a tribe from entering into aprecursory agreement under which the tribe wouldagree to seek approval of a management contract.Forbidding tribes from entering into such agree-ments, or, in the alternative, requiring that they seekapproval for precursory agreements, is the antithesisof self determination.

For the foregoing reasons, and discussion below, weurge the Court to grant this Petition.

STATEMENT

A. Introduction

In the past decade of the vast expansion of Indiangaming, Respondents Harrah’s Operating Company,Inc. ("ttarrah’s") and Park Place Entertainment

7

Corporation ("Park Place"), the largest casinocompanies in the world, became prolific interlopers inIndian Country. (Park Place merged into Harrah’s in2005. Harrah’s and Park Place are collectivelyreferred to as "Respondent".)

In seeking to share in the growth of Indian gaming,Respondent developed a strategy to become involvedin ventures that had already entered the regulatoryapproval stage, often substituting itself in place of acompetitor as the developer or operator. At the sametime, Respondent devised a legal defense strategy toinsulate itself from liability for breaking up contrac-tual relationships of competitors with tribes.

Respondent’s interference arises during the ap-proval stage. Incentives are given to induce a tribalcouncil to terminate existing agreements with projectpartners and start a relationship with Respondent.An indemnity against future claims relating to theexecution of a new agreement with Respondent isincluded to ease the concern of the tribal council. Alawsuit follows.

In the ensuing litigation, Respondent invokes as ashield against contract interference claims statutoryprotections intended by Congress to insulate tribesfrom unscrupulous elements that would take advan-tage of them (such as Respondent). Although notwithin the "zone of interests" intended to be protectedby federal Indian law, Respondent argues that itscompetitors’ agreements are unenforceable undervoiding statutes relating to agreements with tribes,§81(b) and IGRA, barring a claim for interferencewith contractual relations under state law for want ofan enforceable agreement.

8

This is exactly what happened in the instant case.Respondent was able to use laws Congress intendedto protect tribes to take advantage of an Indiannation that would have been Respondent’s majorcompetitor. Respondent robbed the tribe of a uniqueeconomic opportunity, sanctioned under federal lawand by the State of New York that would havesustained 13,000 tribe members for the indefinitefuture.

B. Derailment of a Tribal Economic Develop-merit Opportunity

This case involves the courtship of a tribe planningto develop a casino in the Catskills, 90 miles fromManhattan, by a competitor that operated casinos inAtlantic City. It involves a scheme crafted by a casinomagnate in the summer of 1999 to derail a projectthat had the potential of becoming his company’sbiggest competitor within a few years. The tribe isthe St. Regis Mohawk Tribe ("Tribe"). The executiveis Arthur Goldberg, then Chairman and CEO of ParkPlace.

Over a period of six months, Goldberg succeeded inbefriending the Chiefs, ostensibly to assist with theiron-reservation casino and to develop a second Mohawkcasino in the Catskills. Ultimately, as the Chiefshad trouble meeting payroll at the existing casino,Goldberg was able to demand an exclusive agreementfor the entire State of New York. In exchange,Goldberg provided $3 million. All along, Goldberghad only one objective.

2 Murphy, Sean, "Casino Politics - Casino case raises issue ofmoney, politics." Boston Globe., Oct. 30, 2001, at A-1 (App. D, at246a).

9

Unbeknownst to the Chiefs, Goldberg secretly en-gaged Ivan Kaufman and Gary Melius (the Tribe’scasino manager and building contractor), as hisagents to secure a casino venture with the Tribe inthe Monticello area. To induce Kaufman to do hisbidding, Goldberg promised Kaufman an interestin the new project. Goldberg promised Melius$10,000,000 for the same effort.3 But it was Kaufmanwho would eventually "squeeze" the Chiefs by inten-tionally withholding payroll, causing the Chiefs torun to Goldberg as their "Savior".4

In audio tapes withheld by Park Place andKaufman during discovery, Kaufman reminds CliveCummis, General Counsel of Park Place, that heshould "remember" the pressure Kaufman wasexerting:

KAUFMAN: ... But you got to remember thepressure on them with how we’re squeezing themin Akwesasne is huge. I mean they--you know, Ihave kind of delayed their payrolls and--

CUMMIS: Yeah.

KAUFMAN:--slowed it down so badly that, youknow, they’re looking at Arthur as the savior [i.e.,Arthur Goldberg].

CUMMIS: Yep, they are.

3See, Declaration of Senator Alfonse D’Amato, August 13,2000 App. K, at 316a.

4 Cummis was simultaneously misinforming the Chiefs that

the Governor said that he would concur only if Park Placeparticipated in the Project, a claim refuted by the Governor’sAdviser on Indian gaming and Counsel. See, Affidavits of JohnF. O’Mara and Patrick Lo Kehoe, May 23, 2002 (App. S, at 380a;App. T, at383a)o Cummis also misrepresented that a new projectwould be approved within four months.

10

KAUFMAN: And it is great. I mean I neverwould have thought that you would have gottenwhere you have gotten, but I guess Arthur is agenius.

CUMMIS: He’s pretty good. I’m not bad. He’spretty good.

KAUFMAN: You must be a hell of a team.

CUMMIS: Yeah.

KAUFMAN: I mean I have been around a littlebit, but not as much as you guys. But to take asituation like this--remember we started with ourletter of intent and they said never would theygive an exclusive.

CUMMIS: Yeah.

KAUFMAN: But you guys can maneuver. I’mimpressed.

CUMMIS: They’ve given it to us now. Now, wehad better get together about the financialsituation.***

Catskill, App. A, at 25a-36a (Emphasis supplied.)

Goldberg thus succeeded in inducing the Chiefs toabandon development of the Tribe’s $500,000,000project (the "Project").

The derailment occurred one week after the mostimportant federal approval - the "two-part" deter-mination, was issued by the Secretary. Ironically,there was no contractual prohibition restricting theTribe from opening any number of gaming facilitiesin the Catskills. But Goldberg was not interested. Hewanted this one stopped.

11

The Project was to be located on a 29-acre sitewithin the 230-acre Monticello Raceway. The Tribehad been working on the two-part determination forfour years with its local partners ("Catskill Group"),who had funded over $10 million for the Tribe toachieve its objectives. It was a significant achieve-ment. Since IGRA was enacted in 1988, only two suchdeterminations had been issued by the Secretary.

The Project was a joint initiative of five gov-ernments: The Tribe, State of New York, SullivanCounty, Town of Thompson, and Village of Monticello.It was a mega development that would have revital-ized the Catskills and sustained the Mohawk peoplefor the indefinite future. State and local governmentswould have received hundreds of millions of dollars ayear.

This was going to be a "class III" casino. As NewYork’s Constitution provided charitable organizationsthe right to operate "Las Vegas nights", the Tribewould be entitled to operate a wide variety of gamesthat would compete with Park Place. By Goldberg’sown account, Park Place stood to lose 15% of itsAtlantic City revenues, i.e., hundreds of millions ofdollars each year, if a casino were to open one hourcloser to the New York Metro Area. Park Placecontrolled 30% of the Atlantic City market, with theCaesars Palace, Bally’s, Grand and Hilton casinos,and 40% of its customers were from the New Yorkarea.

In order to develop a gaming facility on non-reservation land, the Tribe had to comply with§2719(b), the "two-part" determination, under whichthe Secretary must determine that (1) the Project isin the best interest of the Tribe, and (2) not detri-mental to the surrounding community. After the Gov-

12

ernor concurs, title is transferred to the UnitedStates, in accordance with DOI regulations. 25 C.F.R.Part 151.

On April 6, 2000, the Secretary issued the deter-mination and asked the Governor to concur. Thiswould be the last significant hurdle for the Project.(App. F, at 259a) The Governor was ready to concur.(App. J, at 314a; App. S, at 380a; App. T, at 383a)

Goldberg was concerned. Before the Governor couldact, he flew to the Reservation to induce the Chiefs togrant Park Place an exclusive right to manage theTribe’s casinos for the entire state of New York,effectively killing the Project. Goldberg provided $3million and an indemnity. He knew the Chiefs’"Achilles heel" was an upcoming tribal election andthat the Chiefs had to meet payroll.

The "Exclusivity Agreement" was signed on April14. The indemnity section described the shield ParkPlace would use in this action (App. G, 299a):

"Both parties understand that there exists be-tween the Tribe and Mohawk Management, LLCa purported Gaming Facility Management Agree-ment signed on July 31, 1996. Both the Tribe and[Park Place] believe such agreement is unen-forceable and of no force and effect for, amongother reasons, (1) it is subject to the approvalof the NIGC, which approval has not beengranted...[Park Place] also understands theTribe’s legal position with respect to the unen-forceable agreement and agrees that it willindemnify the Tribe against any litigation result-ing from the Tribe entering into this Agreementwith [Park Place] in substitution with the Tribe’sprior understanding with the developers of a

13

proposed casino at the Monticello Race Track."App. G, at 301a.

The New York Times broke the story on April 22.~

In the week that followed, Goldberg attempted toextract the Raceway at a distress price. Havingsevered the Tribe from the Project, Goldberg knew hehad blocked the Catskill Group’s ability to moveforward. Goldberg prematurely informed a leadinggaming analyst that he would be acquiring theRaceway. 6

On May 1, the Governor informed the Secretarythat he would suspend action pending clarification ofthe situation. (App. F, at 297a; App. S, at 380a; App.T, at 383a)

C. Status of Regulatory Review as of April 14,2000

Around the time of the breach, the parties weredeeply involved with the Bureau of Indian Affairs("BIA") and NIGC. On March 10, the BIA providedcomments to the Tribe’s application to transfer theland into trust and the Tribe responded on March 14.(App. AA, at 479a) By March 22, 2000, the partieshad incorporated the comments in a Master Amend-ment. The revisions were coordinated with NIGC andled to issuance of the two-part determination.

The Master Amendment dealt with a proposeddevelopment and construction agreement ("Gaming

~ See, Bagli, Charles, "Mohawks Sign New Casino Deal, LeavingCastkill Plan in Limbo", New York Time~, April 22, 2000 (App. E,at 254a), and "Deal Signed for Casino at Old Catskills Resort",New York Times, May 2, 2000 (App. BB, at 492a).

6 Bear Stearns & Co. Inc., Equity Research Report on Park Place

Entertainment Corporation, April 25, 2000. (App. CC, at 495a).

14

Facility Development and Construction Agreement,"or "DCA"), a proposed management contract for thegaming operations ("Gaming Facility ManagementAgreement", or "MA"), and ancillary agreements thatwould be implemented with the closing and financingof the real estate transaction ("Shared Facilities Agree-ment"; "Leasehold Mortgage Agreement")7 under aLand Purchase Agreement. ("LPA") (App. Q, at 335a)BIA did seek to approve or request an amendment tothe LPA, the contract under which the Tribe wouldacquire the 29-acre Project site. The LPA was abinding agreement for the Tribe to acquire the land(App. Q, at 346a, §§5.03 and 6.03) once the approvalshad been obtained, with the Tribe having the right tospecific performance. (App. Q, at 357(a), §12.02) TheTribe’s main obligation was to submit the LPA to theBIA, not for its approval,8 but so that the BIA wouldapprove the trust conveyance and all related agree-ments necessary to effectuate the transfer. (App. Q,at 350a, §§ 8.01 and 8.02)

The parties also reached an advanced stage atNIGC. By letter of April 19, NIGC decided that theDCA and MA, taken together, constituted a manage-ment contract. There was no reference to the LPA.NIGC comments were limited to the DCA and MA.(App. N, at 321a; App. O. at 323a) The LPA, as acontract to sell land governed by state law, was not

7 These two agreements were not before the Court of Appeals.

~The LPA and DCA did have the standard "Section 81Compliance Certificate" attached, which was the practice withall submissions. See, note 21, infra. As of April 14, afteramendment of §81, the statute no longer applied to the DCA. Itnever applied to the LPA, as it was the agreement under whichIndian lands were to be established to begin with.

15

subject to approval under either §81 or IGRA. Cf.,§2711(g)("No management contract ...shall transfer,or in any other manner, convey, any interest in landor other real property, unless specific statutory au-thority exists...").

As described by NIGC General Counsel KevinWashburn by letter dated April 11, 2002 (App U, at385a), at the time the Tribe abandoned the Project,NIGC staff had not completed its review and no finaldeterminations had been made regarding the "man-agement contract"."

"As you are aware, no decision was made on themanagement contract at issue. The Chairman,who makes such decisions, was never asked tomake a decision in this case because the manage-ment contract review process was not completed.Indeed, discussion in any forum on the questionof whether or not the contract might or mightnot have been approved would involve only rawspeculation...It is not unusual for managementcontracts to have deficiencies, especially whenfirst submitted. Indeed, Commission staff is un-aware of any contract in recent memory in whicha management contract was sufficient uponsubmission. The review of a management con-tract is an iterative process in which the staffidentifies deficiencies and requests submissionsof additional information or material from theparties. It is only when the staff reaches thepoint that all available information has beenreceived (or the parties have refused to makeadditional submissions) and the parties haveaddressed all of the issues identified by the staff(or have refused to address such issues) that acontract is submitted to the Chairman for his

16

action. The absence of action by the Chairmanon the contract at issue in this case is a clearindicator that the staff had not completed itswork." Id., at 387a (Emphasis supplied.) 9

ARGUMENT I

WHETHER "INDIAN LANDS" MUSTPRESENTLY BE HELD IN TRUST BYTHE UNITED STATES FOR THEAPPLICATION OF THE INDIAN GAMINGREGULATORY ACT OF 1988

A. Regulatory Framework

IGRA was enacted to balance competing interestsof the federal and state governments and tribes, bygiving each a role in the regulatory scheme.1° Itprovides for various classes of gaming, the mostlucrative being class III, the "most heavily regulatedand most controversial form of gambling". 11 Class IIIgaming is lawful only if: (1) the governing body of thetribe having jurisdiction over the "Indian land" on

9 The letter contradicts the statement in Catskill that, "NIGC

had denied Catskill Group’s application several times." It clari-ties there had been no final determination as to a purportedexcessive land price or hidden management fees. While NIGCasked questions, as it should, it made no final determinations.The Court made the findings for the first time on appeal. Therewas no final agency action that could have been challengedunder §2714 (Judicial Review). NIGC was still waiting for aresponse to its April 19 comments as of May 24, 2000 (App. W),and closed the file on June 12, after learning the Tribe hadabandoned the Project. (App. X, at 426a)

1°Artichoke Joe’s v. Norton, 216 F. Supp. 2d 1084, 1092 (E.D.

Cal. 2002), affld, 353 F.3d 712 (9th Cir. 2003), cert. denied, 543U.S. 815, 125 S. Ct. 51, 160 Lo Ed. 2d 20 (2004).

11 Artichoke Joe’s Cal. Grand Casino v. Norton, 353 F.3d 712,

715 (9th Cir. 2003).

17

which gaming is to take place authorizes class IIIgaming by adopting an "ordinance" or resolution thatis then approved by the Chairman; (2) the gaming islocated in a state that permits such gaming; and (3)the gaming is conducted in conformance with a"tribal-state compact" that regulates such gaming. Id.§2710(d)(1).

B. "Indian Lands"

The consistent and overarching requirement com-mon to each class of gaming activity is that it be sitedon land within the tribe’s jurisdiction and over whichthe tribe "exercises governmental power." §2710(a)(1),(b)(1),(d)(1)(A)(i) and (d)(2)(A).

For purposes of IGRA, "Indian lands" include-

(A) all lands within the limit of any Indianreservation; and

(B) any lands title to which is either held in trustby the United States for the benefit of any Indiantribe or individual or held by any Indian tribeor individual subject to restriction by the UnitedStates against alienation and over which anIndian tribe exercises governmental power. Id.§2703(4) (Emphasis supplied).

C. "Indian lands" In the Ninth Circuit

Respondent’s modus operandi of seeking protectionunder an Indian statutory shield served it well untilGuidiville. The decision involved interference claimsagainst Respondent with respect to agreements en-tered into by NGV Gaming, Ltd. ("NGV") with theGuidiville Band of Pomo Indians. The agreementswere subject to approval under §81. In June 2008, theCourt appropriately held that §81 does not invalidatean agreement otherwise subject to approval under

18

the statute, where no present trust relationshipexists between the United States and the tribe. Astitle to land was not so held, §81 did not apply to voidthe agreements. Guidiville did not address the issueas it relates to IGRA. Respondent’s focus was theDictionary Act.

§81(a)(1) defines "Indian lands" as-

"... lands the title to which is held by the UnitedStates in trust for an Indian tribe or lands thetitle to which is held by an Indian tribe subject toa restriction by the United States againstalienation." (Emphasis supplied)

Under § 81(b)--

"No agreement or contract with an Indian tribethat encumbers Indian lands for a period of 7 ormore years shall be valid unless that agreementor contract bears the approval of the Secretary ofthe Interior or a designee of the Secretary."

The Court concluded that the Word "is" means justthat (in the most basic, present-tense sense of theword) and that §81 applies only to contracts thataffect land already held in trust. The Court ad-dressed the concern of the dissent that §81 would besubject to abuse by having agreements executed justbefore the land is placed in trust. The majorityconcluded that this was not a serious concern giventhe protections under procedures for taking land intotrust 15 C.F.R. Part 151. This is correct because, asonce the land is in trust, unapproved contracts arevoid. §81(b); Reg. §533.7.

19

D. "Indian lands" in the Second Circuit

Guidiville manifests a thorough command of a com-plex area of Indian law by the Ninth Circuit, but thethree-judge panel in Catskill was not persuaded. TheCourt did not have the benefit of a District Courtopinion as the term "Indian lands" was interpretedon appeal for the first time. Since the proceedingsbegan in 2000, this argument had been repeatedlyignored by the District Court, without explanation.

The Second Circuit ruled that Indian lands are notrequired for the IGRA contract approval statutes orvoiding regulations to apply, §§2710(d)(9), 2711, Reg.§533.7, because these subsections, in contrast toothers, did not use the term "Indian lands". TheCourt failed to undertake a legal analysis regardingthe intent of Congress, the position of NIGC as to therole of Indian lands under IGRA, or the embodimentof the term "Indian lands" within the definition ofother terms in the relevant statutes, e.g., "class IIIgaming activity" and "management contract", thatonly bear relevance in relation to activities on’"Indian lands". The Court did not understand that"Indian lands" are a jurisdictional requirement forapplication of IGRA. 12 Indeed, approval by NIGC of a

12The Catskill panel failed to comprehend an importantargument that state law would fill the IGRA regulatory gapuntil "Indian lands" were in place. The Court incorrectly under-stood the argument to relate to the state’s role in the gamingcompact process under §2710(d)(3)("Federal approval issigned to ensure that the contracts tribes enter into are fair andreasonable. State compacts, however, are designed to protectthe state’s taxing authority and police powers over gaming andare not designed to protect tribal interests." (App. A, at 18a)However, Petitioners were not discussing the compact process~Petitioners meant that as long as the land remained under thejurisdiction of the state, because title had not vested in the

20

management contract with respect to which no Indianlands have attached would be a nullity.

E. "Indian Lands" as a JurisdictionalRequirement

Congress intended "Indian lands’ to be the juris-dictional foundation for application of IGRA, includ-ing the Chairman’s contract approval authority. Insetting forth the policy for enactment in §2702,Congress declared that IGRA would establish a fed-eral regulatory authority, federal standards, and aNational Indian Gaming Commission for "gaming onIndian lands":

"Declaration of Policy...(3) to declare that theestablishment of independent Federal regulatoryauthority for gaming on Indian lands, the estab-lishment of Federal standards for gaming onIndian lands, and the establishment of a Na-tional Indian Gaming Commission are necessaryto meet congressional concerns regarding gamingand to protect such gaming as a means ofgenerating tribal revenue." (Emphasis supplied.)

§2710(d)(2)(A) requires that a tribe submit a resolu-tion for approval of the Chairman relating to anyproposed management contractor for a class IIIgaming activity. It supports the intent of Congress in§2702, that "Indian lands" must be in existence for aproposed management contract to be submitted forapproval by the Chairman, and that the tribe "exer-cises governmental power" over the land, pursuant to§2703(4)(B).

federal government, state law would apply to the contractualrelationship between the parties. See, e.g., Sungold Gaming,and Trump Hotels & Casino Resorts Development Company,note 24, infra.

21

§2710(d)(2)(A) provides:

"If any Indian tribe proposes to engage in, or toauthorize any person or entity to engage in, aclass III gaming activity on Indian lands ofthe Indian tribe, the governing body of theIndian tribe shall adopt and submit to the Chair-man an ordinance or resolution that meets therequirements of subsection (b)." (Emphasis sup-plied.)

The statute has one meaning - that upon decidingto propose a management contractor to NIGC, a tribemust be in control of Indian lands. The statutecontradicts the determination that Indian lands arenot relevant in the contract approval stage, by addinga hurdle, not present under §81, that the "Indianlands" also be "of the Indian tribe". This is thoroughlyconsistent with the definition of Indian lands under§2703(4)(B), under which it is not sufficient that landbe held in trust. The tribe must also "exercise gov-ernmental power" over the land.

In Catskill, even had the land been placed in trustfor the Tribe, including, arguendo, under the Diction-ary Act, if the Tribe did not currently "exercisegovernmental power", the land could not meet thedefinition.13 Without Indian lands, IGRA is not trig-gered and NIGC has no jurisdiction to approvemanagement contracts. 14

13 Catskill fails to even mention the exercise of governmental

power requirement.14 See, State of R.I. v. Narragansett Indian Tribe, 19 F.3d 685,

702-03 (lst Cir. 1994) ("a tribe must exercise governmentalpower [over Indian lands] in order to trigger the Gaming Act");Passamaquoddy Tribe v. Maine, 75 F.3d 784 (1st Cir. 1996)("Gaming Act has no application to tribes...that do not exercise

22

F. DOI and NIGC "Memorandum ofAgreement"

In 2007, DOI and NIGC executed an agreementconfirming Indian lands are jurisdictional--"Memo-randum of Agreement between the NationalIndian Gaming Commission and Department ofInterior" February 26, 2007 ("MOA"), (App. H, at303a), and must exist before a management contractcay be approved. Under the MOA, "Indian lands" areviewed as a prerequisite to the application of IGRAand the exercise of power by the Chairman.1~ Theposition of the United States Government is consis-tent with Petitioners’ arguments in the SecondCircuit.16

The MOA provides, in pertinent part:

"2. The DOI agrees that deciding whether gam-ing is being conducted on Indian lands is a basicand essential jurisdictional requirement forthe NIGC under the [IGRA].

"15. It is the position of the Secretary not toapprove compacts for gaming on Indian landsthat have not been acquired into trust.

jurisdiction over their territories, see id. [25 U.S.C.] §2710(b)(1)& (d)(3)(A)"); 56 FR 56278 (1991) ("This definition [of "Indianlands"] clarifies the language of IGRA...The significance of thedefinition is that the IGRA applies only to gaming conducted onIndian lands")

15 The Indian Commerce Clause’s grant of authority to the

federal government, and preemption of state authority, extendsonly to activities occurring in "Indian country," i.e., Indianlands within, the territory of the United States. See 18 U.S.C.§1151; Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148-49,93 S.Ct. 1267, 36 L.Ed.2d 114 (1973).

l~The MOU is published at--http://www.nigc.gov/ReadingRoom/IndianLandOpinions/tabicY120/Default.aspx

23

"16. It is the position of the Chairman not toapprove tribal ordinances or managementcontracts that are site specific when theycall for gaming on Indian lands that havenot been acquired into trust. The Chairmanmay continue to approve or disapprove ordi-nances and management contracts that areotherwise site specific." (Emphasis supplied.)

On May 12, 2000, NIGC Chief of Staff BarryBrandon responded to an inquiry by a member of theCatskill Group who had requested clarification thatNIGC had not made any decision regarding thesuitability of Alpha Hospitality, Inc. Particularlyinstructive is the language that sets forth the officialposition of NIGC on the status of the Tribe’sapplication ("NIGC Indian Lands Letter", App. P,at 333a):

"Before the Chairman can approve a gamingmanagement contract [,] the Chairman must besatisfied with the terms of the contract and thesuitability of the persons and entities which willparticipate in the contract. In the case of themanagement contract between the St. RegisMohawk Tribe and Mohawk Management, LLC.,there can be no approval before the land on whichthe facility is sited is taken into trust and the[S]tate of New York has entered into a compactwith the St. Regis Mohawk Tribe for the conductof class III gaming. Until those events occur, it isnot appropriate for the Chairman to make adecision. Therefore, I do not believe that anyonewho represents the National Indian GamingCommission, which is to say anyone familiarwith the status of our review of this contract,would have made a statement indicating we had

24

determined that Alpha Hospitality was unsuit-able."

Petitioners find curious the recitation in Catskillthat "NIGC denied Catskill Group’s application sev-eral times." (App. A, at 5a) Clearly, no such deter-mination had been made, at any time.

G. Case Law Prior to Amendment of §81

The MOA and NIGC Indian Lands Letter are con-sistent with case law. In Forrest Associates v.Passamaquoddy Tribe, 719 A.2d 535 (Me. 1998), §81was found not applicable where a tribe that ownedland in fee simple had applied to have the landplaced in trust:

"Examination of the ordinary meaning of theterm ’Indian lands,’ relevant case law, and thehistoric relationship between the federal govern-ment and Indian tribes, demonstrates thatsection 81 does not govern a contract concerningland not held in trust by the U.S. government atthe time the contract is formed." Id. at 537.

The current definition of "Indian lands" was en-acted shortly after Forrest. Had Congress intended toinclude non-trust lands, it surely could have done soin the face of a decision that only recently addressedthe issue. Indeed, the opposite was true, as thelegislative history points out:

"Subsection (a) provides definitions for the terms’Indian lands,’ ’Indian tribe,’ and ’Secretary.’Perhaps a definition for Indian lands is intendedto circumscribe the scope of this statute to thosel~nds where title is held in trust for a tribe or arestraint on alienation exists as a result of theprinciple, dating from the Revolutionary War

25

Era, that the federal government must hold titleto Indian lands in furtherance of the federal-tribal trust relationship. ,17

H. Transporting Indian lands "Back from theFuture"

Perhaps not feeling completely comfortable witha pioneering decision that Indian lands are irrelevantto the management contract approval process, theCatskill panel added an alternate holding. The Courtapplied the Dictionary Act to establish Indian landswhere none existed. The Court ruled that even ifIndian lands were ’otherwise’ required for applicationof IGRA approval process, a solution would be foundin the Dictionary Act--by including future trustlands. In so holding, the Court rejected Guidivilleand turned the IGRA definition on its head.18

17 Senate Report No. 106-150, Sept, 8, 1999, p. 8 (App. Z, at

459a) (Emphasis supplied.)18 The Dictionary act will generate unintended consequences

to non-Indians. Consider a tribe that acquires an existing casinooperated under state law on state land, with a managementcontract already in place. Should the management contract (oran existing long-term mortgage on the property) become voidonce the tribe applies for a transfer of the land into trust?Catskill did not provide guidance as to when land first becomesIndian lands under the Dictionary Act. Is it--

When a tribe decides to buy a particular parcel of land toserve as future trust land?

When a tribe enters into a contract to acquire the land?

When the tribe files an application with the Secretary ofInterior?

When a "two-part" determination has been granted?

When the Secretary approves a tribe’s application?

When the land is ready to be transferred under DOIregulations?

26

The Court found Guidiville distinguishable becauseit involved §81, and the land had not been identified.In contrast, Catskill involved an identified site andthe applicable definition of "Indian lands" was underIGRA. To the extent these differences were notmaterial to the majority opinion, the Court said itnevertheless agreed with the Guidiville dissent.

The Catskill panel ignored Petitioners’ argumentsthat IGRA was founded on the basis of the Congres-sional intent, statutory provisions, and decisional lawunderlying §81 and that the policy and purpose of thestatutes were similar. Under §2711(h), the authorityof the Secretary to approve management contractsunder §81 was "transferred" to the Chairman. Priorto IGRA, courts held that the Secretary was author-ized to approve management contracts under §81,because they qualified as service agreements relativeto tribal lands. Under IGRA, Congress removed thatauthority and transferred it to the Chairman. As aresult, there is no distinction between the twostatutes in relation to their underlying policies andthe basis for their application founded on the exis-tence of a government-to-government relationshiprelating to trust lands. They are the same/

§2711(h) is incorporated by reference under§2710(d)(9), the provision that requires managementcontracts to be approved by the Chairman:

"An Indian tribe may enter into a managementcontract for the operation of a class III gamingactivity if such contract has been submitted to,and approved by, the Chairman. The Chairman’sreview and approval of such contract shall be

And, what if title is never actually transferred to theUnited States?

27

governed by the provisions of subsections (b), (c),(d), (f), (g), and (h) of section 12 [25 USCS2~L~_~(b)-(d), (f)-(h)]."

In the twenty years since its enactment, no courthas interpreted the term "Indian lands" under IGRAto include land that may be transferred into trustat some future date. There is certainly no purposeserved by a precise statutory definition if land heldby non-Indians, as in Catskill, qualifies as "Indianlands"; or, land that, hypothetically, might one day beheld in trust is included. The new definition does justthat, including land that may never be placed intrust. It renders meaningless the intent of Congressin drafting the definition.

ARGUMENT II

WHETHER CONGRESS INTENDED TOPROHIBIT INDIAN TRIBES FROM EN-TERING INTO PRECURSORY AGREE-MENTS TO SEEK REGULATORY AP-PROVAL UNDER THE INDIAN GAMINGREGULATORY ACT OF 1988

A. Congressional Policy Favors TribalSelf Determination

The second question presented by the Petition re-lates to the policy of the United States with respect totribal self determination in relation to IGRA. Thegeneral policy was set forth by Congress in thelegislative history of the amendment of §81 withrespect to agreements covered under that section. Itsprinciples apply with equal force to IGRA. 19

Catskill is a remnant of paternalism. The Courteffectively ruled that a tribe is prohibited from enter-

Senate Report S. Rep. No. 106-150 (1999) (App. Z, at 445a).

28

ing into a precursory agreement to submit and seekapproval of a proposed management contract, if theprecursory obligation is contained within the "fourcorners" of the management contract. It is an all ornothing proposition. Any such agreement would beconsidered void.

The Court relied on A.K. Management Co. v. SanManuel Band, 789 F.2d 785 (9th Cir. 1986)("A.K."),decided under the predecessor of §81. In 1988, how-ever, §2711(h) removed management contracts fromthe application of §81 and transferred the authorityof the Secretary to approve such contracts to theChairman. As a result, A.K. has no further relevanceto contracts regulated under §81 or its "offspring",IGRA, which did not adopt the "relative to" triballands language of §81 under which A.K. was decided.

The court that decided A.K. rejected it inGuidiville:

"Even less (if indeed any) weight is to be ascribedto the comparable language employed in [A.K.],also sought to be relied on by appellees. [A.K.].involved an earlier and substantively differentversion of Section 81--one that did not speak of"encumber[ing] Indian lands," but rather ofagreements made with Indians that were "rela-tive to their lands" (see 25 U.S.C. §81 as itexisted until the year 2000). Moreover, [A.K.].involved a dispute over land that was alreadyheld in trust by the United States for an Indiantribe. For more than one reason, then, that casedoes not at all influence today’s outcome.’’2°

~o Guidiville, at note 15 (App. C, at 220a). Under the "relativeto" language, any agreement relating to any matter affectingtribal land would literally be void, including a good faith

29

A.K. predated the enactment of IGRA, which nowprovides a specific definition for the term "manage-ment contract" that did not exist under §81. TheIGRA definition specifically excludes from theterm "management contract" any "collateralagreement" that does not provide for "manage-ment of a gaming operation." This is a majordistinction, particularly since under IGRA there is norequirement that a collateral agreement be sited in aseparate instrument. A collateral agreement may beoral or written, Reg. §502.5, and there is no prohibi-tion for it to be included as part of any other agree-ment, including a management contract. See, e.g.,prohibiting in §2711(g) (management contract maynot involve real estate transactions).

The underlying policy under §81 took a dramaticturn when §81 was amended on March 14, 2000.21The amendment brought with it a fresh approach tothe relationship of the United States and tribes, asCongress announced it favored tribal self determina-

obligation to seek approvals. IGRA, on the other hand, containsno similar language. This is one of the reasons §81 wasamended. S. Rep. No. 106-150, at 7 (1999) (App. Z, at 457a; Cf.,461a)

21 In the era when the BIA regulated gaming agreements (pre-IGRA), every agreement would be submitted for approval.Because the former Section 81 was "susceptible to the inter-.pretation that any contract that ’touches or concerns’ Indianlands must be approved," and, "because of the ’draconian’ natureof the penalty for non-compliance," parties such as Catskill andthe Tribe "frequently ’erred on the side of caution’ by submittingany contract with a tribe to the BIA for approval." SenateReport 106-150 (App. Z, at 457a, 461a). Even the LPA was sub-mitted for Secretarial review, although the only approval neededwas for the Permitted Exceptions to the real estate transfer.(App. Q, at 341a and 366a).

30

tion in the context of the review and approval ofcontracts with Indians under §81. In so doing, Con-gress criticized A.K., describing A.K. as prescribing a"draconian remedy * * * [that] might cause moreharm than good." S. Rep. No. 106-150, at 7 (1999)(App. Z, at 457a; Cf., 461a), and that "[i]t seems likelythat tribes may be hurt rather than protected by thedisruption of their successful business relationships".Id. The Senate Report rejects the notion that tribeslack competence to incur binding precursory obliga-tions, explaining that "it]here is no justification forsuch an assumption to provide the basis for federalpolicy in this era of tribal self-determination." S. Rep.No. 106-150, at 8 (App.Z, at 445a, 459a) Plainly,Congress viewed federal pre-approval of the opera-tional portion of a management contract (and theinvalidity of that portion pending approval) as all the"paternalistic" protection tribes require.

This legislative policy furnishes additional justi-fication, were any necessary, for adherence to thedecision in Vanadium Corp. of Am. v. Fidelity &Deposit Co. of Md., 159 F.2d 105 (2d Cir. 1947). Thestatute in Vanadium, 25 U.S.C. §396a, closely resem-bles §§81 and 2710(d)(9). The parties executed acontract assigning mineral rights on Indian lands.The contract expressly required approval by theSecretary. Cf., Reg. §533.7 (Chairman’s approvalrequired for assignment of management contract).22

Soon thereafter, the assignee refused to cooperate inseeking approval (which consequently was denied).The Second Circuit held that, notwithstanding the

~2 Under §533.7, an assignment by a management contractoris treated in the same manner as an execution of the initialagreement. Both require the approval of the Chairman to beeffective. Otherwise, they are void.

31

federal statute requiring Secretarial approval (andInterior’s gloss declaring unapproved contracts "void")(id. at 108 (internal citations omitted)):

"lAin obligation to attempt in good faith to securethe prerequisite of the Secretary’s approvalwould appear to rest upon both parties. * * * Itwas surely not the intent of the parties whenthey made an apparently binding assignmentthat the plaintiff should have the power toinvalidate the assignment by not filing it forapproval. On the contrary, it must have beenassumed that plaintiff would reasonably file itand in good faith seek its approval...And plainlyplaintiff was obligated to refrain from positiveactions to prevent approval by the Secretary."

In other words, the impact of the statute requiringapproval of the assignment was to void only imple-mentation of the assignment (i.e., actual commence-ment of mining operations) pending approval, not tovoid the precursory obligation to seek approval.23

As a practical matter, precursory agreements arevital to tribes to be able to secure initial predevelop-

23 Vanadium is included as an illustration in Restatement

(Second) of Torts §245 cmt. A (1981)(Illustration 4):

"A contracts to sell and B to buy A’s rights as one of threelessees under a mining lease in Indian lands. The contractstates that it is "subject only to approval by the Secretaryof the Interior," which is required by statute. B files arequest for approval but A fails to support B’s request bygiving necessary cooperation. Approval is denied and Acannot convey his rights. B has a claim against A for totalbreach of contract. A’s breach of his duty of good faith andfair dealing contributed materially to the non-occurrence ofthe condition, approval by the Secretary of the Interior,excusing it."

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ment funding and to pursue the planning and ap-proval process.24 Contrary to Vanadium, Catskill tookthe view that an obligation of good faith and fairdealing, contained within the four corners of aproposed management contract, was void along withthe underlying contract for which approval wassought, elevating form over substance. A precursoryobligation should not be void for such a technicalreason. So long as the contract is not operative beforeit is approved, there is no abuse of the statute orability to take advantage of a tribe by interlopers,and no need to be overly concerned from a pater-nalistic viewpoint.

B. Precursory Agreements under theDCA and MA

There were two "Precursory Agreements" involvedin this case (and perhaps a third under the LPAassuming, arguendo, that the LPA is a managementcontract). These were the initial promises exchangedby the parties to use commercially reasonable effortsto seek approval of the DCA and the MA. Identicalpromises were made in the definition section of eachagreement, under the term "Effective Date."

The DCA provided:

"Effective Date" shall mean the date on whichthe Secretary of the Interior grants writtenapproval of this Agreement. The parties agreeto cooperate and to use their commerciallyreasonable efforts to satisfy the above condi-

U See, e.g., Sungold Gaming, Inc. v. United Nations ofChippewa Indians of Mich, Inc., No. 1:99-CV-181, 1999 WL33237035 (W.D. Mich, June 7, 1999), and Trump Hotels &Casino Resorts Development Company, LLC v. Roskow, 2004U.S. Dist. LEXIS 5401 (D.Conn. 2004).

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t̄ion at the earliest possible date." (Emphasissupplied) (App. L, at 319a)25

The MA provided:

"Effective Date" shall mean the date on whichthe Chairman of the NIGC grants writtenapproval of this Agreement. The parties agreeto cooperate and to use their commerciallyreasonable efforts to satisfy the above condi-tion at the earliest possible date." (Emphasissupplied) (App. M, at 320a)

C. Collateral Agreements under IGRA

IGRA provides that, "An Indian tribe may enterinto a management contract for the operation of aclass III gaming activity if such contract has beensubmitted to, and approved by, the Chairman."§2710(d)(9). "Such contract shall become effectiveupon approval by the Chairman." Reg. §533.1. "Man-agement contracts and changes in persons with afinancial interest in or management responsibility fora management contract, that have not been approvedby the ...Chairman in accordance with the require-ments of this part, are void." Reg. §533.7.

~ When amended in December 1999, the DCA was subject toapproval by the Secretary as a service agreement relative totribal lands. The land would have been in trust before the DCAbecame effective and the Secretary would not grant an approvalbefore the land was actually held in trust. When the amend-ment of §81 was adopted in March 2000, the DCA no longerrequired Secretarial approval, because it did not "encumber"any land. The Court misunderstood these circumstances indetermining the DCA was viewed by the parties as requiringregulatory approval of NIGC.

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IGRA regulations define a "management contract"as-

"... any contract, subcontract, or collateralagreement between an Indian tribe and acontractor ... if such contract or agreement pro-vides for the management of all or part ofthe gaming operation."). (Emphasis supplied).Reg. §502.15.

IGRA regulations further define a "collateralagreement" as--

"...any contract, whether or not in writing, thatis related, either directly or indirectly, to amanagement contract, or to any rights, duties orobligations created between the tribe (or any ofits members, entities, or organizations) and amanagement contractor or subcontractor (or anyperson related to a management contractor orsubcontractor)." Reg. §502.5.

The Precursory Agreements are protected underthe foregoing ’safe haven’ for collateral agreementsthat carry no management responsibilities. This alsoapplies to the LPA, as the LPA was no more than aland sale contract. The fact that a collateral agree-ment is purported to have excess compensationdoes not make it a management contract. NIGC maychoose not to approve the management contract ifchanges it requests are not made, but there is noauthority to disapprove a collateral agreement thathas no active management functions.26

~ See, Washburn, ’~e Mechanics of Indian Gaming Manage-ment Contract Approval" 8 Gaming L.R. 333, at 344-346 (App.V, at 389a, 418a-423a (discussion of collateral agreement reviewand approval process)), and National Indian Gaming Commission,Letter from Acting General Counsel William F. Grant, NIGC

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Since its enactment, IGRA has permitted collateralagreements to co-exist with management contracts.Had the Precursory Agreements in this case beenexecuted as separate documents, they would havebeen characterized as "collateral agreements" that donot meet the definition of a "management contract".Such a distinction is not one Congress, or this Court,should favor in an era of tribal self determination. Itis an elevation of form over substance in the extreme.

CONCLUSION

A. "Indian lands" Are Necessary for Applica-tion of IGRA

We have explained that "Indian lands" constitutethe jurisdictional underpinning on which applicationof IGRA and exercise of jurisdiction by the Chairmanover management contracts are based. The legislativehistory, statutes, decisions and agency pronounce-ments relating to IGRA are consistent. We havesimilarly pointed out that Catskill is an anomaly in avast field of persuasive authority.

As Penny Coleman, Acting General Counsel ofNIGC, aptly explained to the Senate Indian AffairsCommittee in July 2005 (App. I, at 309a):

"Indian land is the foundation upon whichIndian gaming is built .... [It] limits the Na-

Mgmt. Contract Review President R.C.-St. Regis Mgmt. Co.,January 9, 2004 (unpub.)(App. B, at 192a) (NIGC contract re-view and approval procedures; collateral agreement subject toapproval if actual management role). Under the opinion, neitherthe DCA nor LPA would be subject to approval as a manage-ment contract, irrespective of whether the development fee orland price was purported to be excessive, because they had noactive management role. Had NIGC made any such final deter-ruination, NIGC would have asked for voluntary revisions by theparties for the collateral terms in order to approve the manage-meat agreement.

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tional Indian Gaming Commission’s regulatoryauthority to gaming that takes place on IndianLands .... Indian lands are central to many ofthe Commission’s functions .... The Commissionis... required to decide whether a specific parcel isIndian lands when a management contract or asite-specific tribal ordinance has been submittedto the Commission for approval; such determina-tions are part of our final agency actions onmanagement contracts and tribal ordinances."(Emphasis supplied.) 27

In the 20-year history of IGRA, no court has lookedinto the future to find Indian lands exist todaybecause they might exist later in time. The federalrelationship with Indians demands an existing foun-dation on which the government-to-government rela-tionship relating to Indian gaming is based, andconsistently applied. The conflict generated byCatskill, along with its negative impacts, call for aresolution by this Court.

B. IGRA Supports Self Determination

IGRA does not prohibit tribes from entering intoprecursory or other collateral agreements related totheir gaming establishments, provided the agree-ments do not provide for the management of agaming operation. The drafters of IGRA, perhaps asa result of the ’draconian’ result in A.K. at the time,created a category of collateral agreements at IGRA’sinception that would not require approval, but merelyreview. From a regulatory perspective, this is per-fectly reasonable.

27 See also, National Iadian Gaming Commission, Letter fromDeputy General Counsel Penny J. Coleman, to Delaware Tribeof Oklahoma, July 30, 2001. (App. R, at 377a)

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The Precursory Agreements in this case were col-lateral agreements sanctioned by IGRA, to seekregulatory approval, whether sited in a managementcontract or in a separate instrument. They allowedthe Tribe to commit to pursue approval of the DCAand MA as the "consideration" for the CatskillGroup’s agreement to permit the Tribe to "lock up"the land under the LPA and start the regulatoryapproval process. The Tribe’s ability to enter into abinding agreement to acquire the land and pursuethe Project, without undue regulatory restrictions, isthe essence of tribal self determination.

The Petition Should Be Granted

Based on the foregoing, Petitioners respectfully askthe Court to grant the Petition.

Respectfully submitted,

January 16, 2009

DENNIS C. VACCO, ESQ.CRANE PARENTE AND CHERUBIN90 State StreetAlbany, NY 12207(518) 432-8000

JOSEPH E. BERNSTEIN, ESQCounsel of Record

1045 Fifth AvenueNew York, NY 10028(917) 365-3651

Counsel for Petitioners

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