In a victory for five California gaming tribes, a federal district court ruled on March 31, 2021, in favor of five Indian tribes who argued that the State of California negotiated gaming compacts in bad faith. Negotiations between the State of California and many of the 74 gaming tribes began in 2014. In 2019, the Chicken Ranch Rancheria of Me-Wuk Indians, Blue Lake Rancheria, Chemehuevi Indian Tribe, Hopland Band of Pomo Indians, and Robinson Rancheria sued the state over the state’s insistence that the tribes include provisions in their new compacts that were improper under federal law.
“The Tribe had a compact with the state that had worked since 1999, so the Tribe was hopeful that a new compact would be negotiated fairly quickly,” said Lloyd Mathiesen, Chairman of Chicken Ranch Rancheria of Me-Wuk Indians. “We tried, but after five years of negotiations it was painfully clear that the state wanted more from the Tribe than it had a right to ask for. The state’s actions threatened our sovereignty. We had no choice but to resist, and litigation became our only option.”
The Indian Gaming Regulatory Act is a federal law that requires an agreement between a tribe and a state, known as a tribal-state gaming compact, before a tribe can operate what is commonly thought of as Nevada-style gambling. Recognizing that the compact requirement infringed on tribal sovereignty, Congress established a limited number of subjects that may be negotiated and that states must negotiate in good faith. Courts have since established that a state may offer a tribe a meaningful concession—something other than basic gaming rights or a right that a tribe already has—to rebut the suggestion of bad faith arising from an improper demand.
“During negotiations, the Tribes took clear positions on what we believed were proper and improper subjects of negotiation, and those positions were based on what the law actually says and how courts have interpreted the law,” said Lester J. Marston, attorney for Plaintiffs Chicken Ranch Rancheria of Mew-Wuk Indians, Chemehuevi Indian Tribe, Robinson Rancheria, and Hopland Band of Pomo Indians. “The state disagreed, but with this order, the federal court confirmed that the Tribes were right.”
The court agreed with the tribes that the state had insisted that the compact negotiations include provisions prohibited by federal law, including state tort and environmental laws, subjecting the tribes to the jurisdiction of non-tribal local governments, contributions to a state grant fund, state minimum wage laws, anti-discrimination laws, labor laws and recognition of state spousal and child support orders.
Beniakem Cromwell, Chairman of the Robinson Rancheria asked, “what does the payment of spousal support have to do with the playing games at the casino or the regulation of gaming activities?”
The court determined that the inclusion of these topics, over the tribes’ objections had nothing to do with the regulation of gaming activities or were topics that were not at the heart of the gaming activity and required the state to provide meaningful concessions in exchange for the Tribes agreeing to be bound by these state laws. The court found that the state refused to offer or identify any meaningful concessions.
“In addition to providing jobs to our members and the local community, our casino is a critical source of revenue for our government and social services,” said Sierra Pencille, Chair of the Chemehuevi Indian Tribe. “After multiple closures this past year as a result of COVID-19, it is an incredible relief that the court granted the Tribe’s motion for summary judgment and we now have one less worry going forward. We just hope that the Governor and state do not appeal this order.”
As the immediate remedy, the court ordered the parties to conclude a compact within 60 days of the order or to provide a proposed stipulation to extend the time for concluding the compact.