case number 15-5162 in the united states court of appeals city of duluth, v… · 2015-11-18 ·...

PROOF BRIEF

ORAL ARGUMENT NOT YET SCHEDULED

Case Number 15-5162

IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

CITY OF DULUTH, Plaintiff-Appellant,

v.

NATIONAL INDIAN GAMING COMMISSION; JONODEV OSCEOLA CHAUDHURI, in his official capacity as chairman of the National

Indian Gaming Commission, Defendants-Appellees.

On Appeal from the United States District Court for the

District of Columbia, Civil Case Number 13-cv-00246-CKK

RESPONSE BRIEF OF THE DEFENDANTS-APPELLEES

JOHN C. CRUDEN Assistant Attorney General Environment & Natural Res. Div. Of Counsel:

KATHERINE ZEBELL JOHN HAY

LAURA L. MAUL MARY GABRIELLE SPRAGUE

National Indian Gaming TAMARA N. ROUNTREE Commission Attorneys Office of General Counsel Environment & Natural Res. Div.

U.S. Department of Justice P.O. Box 7415 Washington, D.C. 20044 (202) 514-1174

USCA Case #15-5162 Document #1584285 Filed: 11/18/2015 of 80

DEFENDANTS-APPELLEES’ CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES

A. Parties and Amicus. – The plaintiff-appellant is the City of

Duluth. The defendants-appellees are: the National Indian Gaming

Commission and Jonodev Osceola Chaudhuri, in his official capacity as

Chairman of the National Indian Gaming Commission.

B. Rulings Under Review. – This appeal is from an order and

opinion entered by the United States District Court for the District of

Columbia (Honorable Colleen Kollar-Kotelly) in City of Duluth v.

National Indian Gaming Commission, Civil Case Number 13-246-CKK,

on March 31, 2015, granting summary judgment in favor of the

defendants on all claims in plaintiff’s complaint.

C. Related Cases. – A related case is pending in the United

States District Court for the District of Columbia (Honorable Colleen

Kollar-Kotelly) in City of Duluth v. S.M.R. Jewell, Civil Case Number 2-

1116-CKK. That matter has been stayed pending resolution of the case

before this Court.

/s/ Tamara N. Rountree TAMARA N. ROUNTREE U.S. Department of Justice


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TABLE OF CONTENTS

PAGE JURISDICTIONAL STATEMENT .......................................................................... 1 NATURE OF THE CASE ........................................................................................ 1 ISSUES PRESENTED ............................................................................................... 2 STATUTES AND REGULATIONS INVOLVED ................................................... 2 STATEMENT OF THE CASE .................................................................................. 3

I. LEGAL BACKGROUND ............................................................................. 3

II. STATEMENT OF FACTS ............................................................................ 6

A. THE 1986 AGREEMENTS FOR THE FOND DU LUTH CASINO .......... 6

B. THE GAMING COMMISSION’S REVIEW OF THE 1986 AGREEMENTS ............................................................................... 7

C. THE 1994 AGREEMENTS, THE GAMING COMMISSION’S REVIEW

OF THOSE AGREEMENTS, AND THE 1994 CONSENT ORDER .......... 8

D. THE BAND’S RENT PAYMENTS UNDER THE 1994 AGREEMENTS ............................................................................. 11

E. THE GAMING COMMISSION’S 2010-2011 REVIEW OF THE 1994

AGREEMENTS AND THE RESULTING 2011 NOTICE OF VIOLATION ................................................................................. 12

F. THE MINNESOTA DISTRICT COURT’S 2011 ORDER GRANTING

THE BAND PARTIAL RELIEF FROM THE CONSENT ORDER .......... 15

G. PROCEEDINGS BELOW ................................................................ 17


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H. THE MINNESOTA DISTRICT COURT’S 2015 ORDER GRANTING

THE BAND RELIEF FROM THE 2009-2011 UNPAID RENTAL

PAYMENTS ................................................................................. 20 STANDARD OF REVIEW ..................................................................................... 21 SUMMARY OF ARGUMENT ............................................................................... 22 ARGUMENT ........................................................................................................... 25

1. THE GAMING COMMISSION HAD THE DISCRETION IN 2011 TO REEXAMINE THE

1994 AGREEMENTS FOR COMPLIANCE WITH IGRA AND TO ISSUE THE NOTICE OF VIOLATION ............................................ 25 A. AS A GENERAL RULE, AN AGENCY MAY REVISIT A PAST

DECISION AND CHANGE ITS POSITION ........................................ 25

B. NO PROVISION OF IGRA PRECLUDED THE GAMING COMMISSION

FROM REEXAMINING THE 1994 AGREEMENTS IN 2011 AT THE

REQUEST OF THE BAND .............................................................. 29

C. THE GAMING COMMISSION PROVIDED A REASONED ANALYSIS

FOR REACHING A DIFFERENT CONCLUSION THAN CHAIRMAN

HOPE DID IN 1994 ...................................................................... 35 II. THE 2011 NOV IS NOT IMPERMISSIBLY RETROACTIVE ........................ 38

III. THE GAMING COMMISSION’S CONCLUSION THAT THE 1994

AGREEMENTS VIOLATED IGRA WAS NOT ARBITRARY OR CAPRICIOUS .......................................................................................... 44

A. THE COMMISSION’S INTERPRETATION OF IGRA IS ENTITLED TO

CHEVRON DEFERENCE ................................................................ 44

B. THE COMMISSION’S ISSUANCE OF THE 2011 NOV WAS PROPER

AND SHOULD BE UPHELD ............................................................ 46


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CONCLUSION ........................................................................................................ 55 CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE STATUTORY ADDENDUM


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TABLE OF AUTHORITIES CASES: *Algonquin Gas Transmission Co. v. FERC, 948 F.2d 1305 (D.C. Cir. 1991) ..................................................................... 26 Am. Tel. & Tel. Co. v. FCC, 454 F.3d 329 (D.C. Cir. 2006) ....................................................................... 39 Am. Wildlands v. Kempthorne, 530 F.3d 991 (D.C. Cir. 2008) ........................................................... 21, 30, 41 Automobile Club of Mich. v. Commissioner, 353 U.S. 180 (1957)....................................................................................... 28 Bode & Grenier, LLP v. Knight, No. 14-7104, 2015 WL 6405279 (D.C. Cir. Oct. 23, 2015) ................... 30, 41 Catholic Health Initiatives Iowa Corp. v. Sebelius, 718 F.3d 914 (D.C. Cir. 2013) ................................................................. 38, 40 Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)..................................................................... 17, 27, 44-46 Chisholm v. FCC, 538 F.2d 349 (D.C. Cir. 1976) ....................................................................... 27 Christensen v. Harris County, 529 U.S. 576 (2000)....................................................................................... 45 Citizens Exposing Truth About Casinos v. Kempthorne, 492 F.3d 460 (D.C. Cir. 2007) ....................................................................... 45 City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 708 F. Supp. 2d 890 (D. Minn. 2010) ............................................... 10, 11, 39 * Authorities on which we chiefly rely are marked with asterisks.


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City of Duluth v. Fond du Lac Band of Lake Superior Chippewa Indians, No. 09-cv-2668, 2011 WL 1832942 (D. Minn. Apr. 28, 2011) .................... 10 City of Duluth v. Fond du Lac Band of Lake Superior Chippewa Indians, No. 09-cv-2668, 2011 WL 1832786 (D. Minn. May 13, 2011) .................... 10 City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 830 F.Supp.2d 712 (D. Minn. 2011) ................................................. 10, 16, 41 *City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 702 F.3d 1147 (8th Cir. 2013) ............................................... 10, 16, 39, 41-42 City of Duluth v. National Indian Gaming Commission, No. 13-246, 2015 WL 1447548 (D.D.C. Mar. 31, 2015) .............................. 17 City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, No. 09-cv-2668, 2015 WL 4545302 (D. Minn. July 28, 2015) .............. 10, 21 41, 42 *City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 785 F.3d 1207 (8th Cir. 2015) ..................................................... 10, 20, 42, 44 City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, Indians, 977 F. Supp. 2d 944 (D. Minn. 2013) ..................................................... 10, 16 Coosemans Specialties, Inc. v. Dept of Agric., 482 F.3d 560 (D.C. Cir. 2007) ....................................................................... 46 Ctr. for Auto Safety v. Fed. Highway Admin., 956 F.2d 309 (D.C. Cir. 1992) ....................................................................... 21 Dickinson v. Zurko, 527 U.S. 150 (1999)....................................................................................... 22 Dun & Bradstreet Corp. Found. v. U.S. Postal Serv., 946 F.2d 189 (2d Cir. 1991) .......................................................................... 27


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*EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014) ................................................................................... 48 *FCC v. Fox Television Stations, Inc., 566 U.S. 502 (2009)....................................................................................... 28 Fond do Lac Band of Lake Superior Chippewa Indians v. City of Duluth, No. 5:89-cv-163 (D. Minn. 1989).................................................................... 7 Fond do Lac Band of Lake Superior Chippewa Indians v. City of Duluth, No. 5:94-cv-82 (D. Minn. 1994) ...................................................................... 9 *Good Samaritan Hosp. v. Shalala, 508 U.S. 402 (1993)....................................................................................... 27 Hall v. Baker, 867 F.2d 693 (D.C. Cir. 1989) ....................................................................... 26 INS v. Aguirre-Aguirre, 526 U.S. 415 (1999)....................................................................................... 46 INS v. Elias-Zacarias, 502 U.S. 478 (1992)....................................................................................... 21 Lubow v. U.S. Dep’t of State, 783 F.3d 877 (D.C. Cir. 2015) ....................................................................... 21 Nat’l Ass'n of Homebuilders v. EPA, 682 F.3d 1032 (D.C. Cir. 2012) ..................................................................... 27 *Nat’l Cable & ‘Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005)....................................................................................... 27 NLRB v. J. Weingarten, Inc., 420 U.S. 251 (1975)....................................................................................... 28 Nuclear Energy Inst., Inc. v. EPA, 373 F.3d 1251 (D.C. Cir. 2004) ..................................................................... 27


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Rollins Envtl. Servs. v. EPA, 937 F.2d 649 (D.C. Cir. 1991) ....................................................................... 30 SEC v. Chenery Corp., 332 U.S. 194 (1947)................................................................................. 43, 44 Skidmore v. Swift, 323 U.S. 134 (1944)....................................................................................... 45 Thomas Radio Co. v. FCC, 716 F.2d 921 (D.C. Cir. 1983) ....................................................................... 26 United Gas Imp. Co. v. Callery Properties, Inc., 382 U.S. 223 (1965)....................................................................................... 27 *United States v. Mead Corp., 533 U.S. 218 (2001)....................................................................................... 46 Verizon Tel. Cos. v. FCC, 269 F.3d 1098 (D.C. Cir. 2001) ..................................................................... 43 *Williams Gas Processing-Gulf Coast Co., L.P. v. FERC, 475 F.3d 319 (D.C. Cir. 2006) ....................................................................... 27 Williams Natural Gas Co. v. FERC, 3 F.3d 1544 (D.C. Cir. 1993) ......................................................................... 38 STATUTES: Administrative Procedure Act: 5 U.S.C. § 706(2) ........................................................................................... 21 5 U.S.C. § 704 ................................................................................................ 34 Indian Gaming Regulatory Act: 25 U.S.C. § 2706(b)(10) .................................................................................. 4 25 U.S.C. §§ 2701 et seq ................................................................................. 1 25 U.S.C. § 2702(1) ......................................................................................... 3


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25 U.S.C. § 2702(2) ................................................................................... 3, 15 25 U.S.C. § 2702(3) ......................................................................................... 4 25 U.S.C. § 2703(8) ........................................................................................ 3 25 U.S.C. § 2710 .............................................................................. 3, 4, 35, 52 25 U.S.C. § 2710(b)(1)(B) ............................................................................... 3 25 U.S.C. § 2710(b)(2)(A) ............................................................... 1, 3, 12, 19 25 U.S.C. § 2710(b)(2)(B)(v) .................................................................. 48, 49 25 U.S.C. § 2710(d)(1)(A) ............................................................................... 3 25 U.S.C. § 2710(d)(1)(A)(iii) ......................................................................... 3 25 U.S.C. § 2710(d)(3) .................................................................................. 52 25 U.S.C. § 2710(d)(3)-(d)(8) ....................................................................... 52 25 U.S.C. § 2711 ...................................................................................... 18, 35 25 U.S.C. § 2711(b) ....................................................................................... 50 25 U.S.C. § 2712 ................................................................ 4, 18, 23, 25, 30-35 25 U.S.C. § 2712(a) ................................................................................. 32, 33 25 U.S.C. § 2713 ....................................... 1, 2, 4, 5, 17, 18, 22, 29, 30, 35, 45 25 U.S.C. § 2713(a) ................................................................................. 12, 45 25 U.S.C. § 2713(a)(1) .................................................................... 4, 5, 29, 47 25 U.S.C. § 2713(a)(3) .................................................................................... 5 25 U.S.C. § 2714 ............................................................. 23, 25, 30, 31, 34, 35


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RULES AND REGULATIONS: Fed. R. Civ. P. 60(b) .......................................................................................... 15, 16 Fed. R. Civ. P. 60(b)(1)-(5) ...................................................................................... 42 Fed. R. Civ. P. 60(b)(6) ...................................................................................... 42, 43 25 C.F.R. Part 293 .................................................................................................... 52 25 C.F.R. Part 500 ...................................................................................................... 5 25 C.F.R. § 502.3 ....................................................................................................... 3 25 C.F.R. § 502.4 ....................................................................................................... 3 25 C.F.R. § 502.5 ..................................................................................................... 32 25 C.F.R. § 502.15 ................................................................................................... 32 25 C.F.R. § 502.21 ................................................................................................... 52 25 C.F.R. § 502.24 ..................................................................................................... 6 25 C.F.R. § 522.4(b)(1) ........................................................................................ 5, 12 25 C.F.R. § 522.6(c) ............................................................................................. 5, 12 25 C.F.R. § 573.3 ..................................................................................................... 47 25 C.F.R. § 573.3(a) ............................................................................................. 5, 29 25 C.F.R. § 573.3(b)(3) ............................................................................................ 53 25 C.F.R. § 573.3(b)(4) ............................................................................................ 53 25 C.F.R. § 575.5(a) ................................................................................................. 45


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GLOSSARY

APA

Band

City

IGRA

NIGC

NOV

Administrative Procedure Act

Fond du Lac Band of Lake Superior Chippewa

City of Duluth

Indian Gaming Regulatory Act

National Indian Gaming Commission

Notice of Violation


1

JURISDICTIONAL STATEMENT

Defendants-appellees (the “Gaming Commission” or “Commission”) agree

with the jurisdictional statement in the principal brief of the plaintiff-appellant (the

“City”).

NATURE OF THE CASE

In 1986, the City and the Fond du Lac Band of Lake Superior Chippewa

(“the Band”) entered into agreements (the “1986 agreements”) to develop and

operate a casino in Duluth, Minnesota. Dkt. 36 at 3. After the 1988 enactment of

the Indian Gaming Regulatory Act (“IGRA”), 25 U.S.C. § 2701 et seq., the

Gaming Commission reviewed the 1986 agreements and, in 1993, determined that

they did not comply with IGRA’s requirement that Indian tribes have the “sole

proprietary interest and responsibility for the conduct of any gaming activity.” 25

U.S.C. § 2710(b)(2)(A); AR 286. The City and the Band revised the agreements;

and in 1994, the Gaming Commission determined that the revised agreements (the

“1994 Agreements” or “Agreements”) were consistent with IGRA. AR 325-26.

In 2010, the Band asked the Gaming Commission to reexamine the 1994

Agreements to determine compliance with IGRA’s “sole proprietary interest and

responsibility” requirement. AR 673-77. In 2011, under its Section 2713

enforcement authority, the Commission issued a Notice of Violation (“NOV” or

“2011 NOV”), concluding that certain provisions of the 1994 Agreements violated


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that requirement, and directing the Band to “cease performance” of those

provisions. AR 33-51.

The City challenged the NOV in the United States District Court for the

District of Columbia, asserting that the Commission lacked authority in 2011 to

review the 1994 Agreements and that, even if it had the authority, its decision that

the Agreements violated IGRA was arbitrary and capricious. The district court

dismissed the City’s action and granted summary judgment to the Commission.

Dkt. 36 at 15. The City appealed. Dkt. 37.

ISSUES PRESENTED

1. Whether the Gaming Commission in 2011 had authority under Section

2713 to review the 1994 Agreements for compliance with IGRA’s “sole

proprietary interest and responsibility” requirement.

2. Whether the 2011 NOV is impermissibly retroactive.

3. Whether the Gaming Commission’s 2011 NOV conclusion that certain

provisions of the 1994 Agreements violated IGRA’s “sole proprietary

interest and responsibility” requirement was arbitrary and capricious.

STATUTES AND REGULATIONS INVOLVED

Pertinent statutory and regulatory provisions are reproduced in an addendum

to this brief.


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STATEMENT OF THE CASE

I. LEGAL BACKGROUND

Congress enacted the Indian Gaming Regulatory Act in 1988 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). In furtherance of these goals, Congress

expressly intended that the Act “ensure that the Indian tribe is the primary

beneficiary of the gaming operation.” 25 U.S.C. § 2702(2).

IGRA provides that a tribe may engage in Class II or Class III gaming1 on

Indian lands within the tribe’s jurisdiction if the tribe adopts an ordinance that is

approved by the Commission Chair. 25 U.S.C. § 2710(b)(1)(B) (Class II gaming);

25 U.S.C. § 2710(d)(1)(A) (Class III gaming). Under IGRA, tribal gaming

ordinances must provide that “the Indian tribe will have the sole proprietary

interest and responsibility for the conduct of any gaming activity.” 25 U.S.C. §

2710(b)(2)(A) (Class II gaming) (emphasis added); 25 U.S.C. § 2710(d)(1)(A)(iii)

(Class III gaming).

1 IGRA divides gaming into three classes of activities, two of which are

relevant here: Class II and Class III. See 25 U.S.C. § 2710. Class II gaming consists of two basic categories of activities: (1) bingo and variants thereof, and (2) nonbanking card games that are explicitly authorized by state law. 25 C.F.R. § 502.3. Class III gaming includes slot machines, lotteries, sports betting, and casino games (such as blackjack, roulette, and craps). See 25 U.S.C. § 2703(8); see 25 C.F.R. § 502.4.


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Congress provided in Section 2712 that “ordinances,” “resolutions,”

“management contracts,” and “collateral agreements” existing before the date of

IGRA’s enactment would be reviewed for compliance with IGRA’s requirements;

and any activity conducted under such arrangements would be grandfathered until

disapproved under the Section. See 25 U.S.C. § 2712.

In enacting IGRA, Congress declared that the establishment of a “National

Indian Gaming Commission” was one of the actions necessary “to meet

congressional concerns regarding gaming and to protect such gaming as a means of

generating tribal revenue.” 25 U.S.C. § 2702(3). To that end, IGRA designates

the Gaming Commission as the regulatory agency charged with implementing such

provisions of the Act. 25 U.S.C. § 2706(b)(10). Section 2713 grants the

Commission broad enforcement authority to levy and collect civil fines against

tribal gaming operators “for any violation of any provision of [the Act], any

regulation prescribed by the Commission pursuant to [the Act], or tribal

regulations, ordinances, or resolutions approved under section 2710” of the Act.

25 U.S.C. § 2713(a)(1) (emphases added). As part of IGRA’s grant of expansive

enforcement authority to the Commission, the agency is authorized to issue

complaints for acts or omissions that are regulated under the Act and may result in

penalties or the permanent closure of a gaming activity. See 25 U.S.C.


5

§ 2713(a)(3) (“Whenever the Commission has reason to believe that the tribal

operator of an Indian game * * * is engaged in activities regulated by this chapter

* * * that may result in the imposition of a fine under subsection (a)(1) [or] the

permanent closure of such game,” the Commission shall provide the tribal operator

with a written complaint) (emphasis added).

Under its statutory authority, the Commission promulgated regulations to

implement the statute. See 25 C.F.R. Part 500. The regulations include provisions

that mirror the statute’s “sole proprietary interest and responsibility” mandate for

all tribal gaming activity. Like IGRA, the regulations provide that ordinances and

resolutions that tribes adopt to conduct Class II and Class III gaming activities

must provide that “[t]he tribe shall have the sole proprietary interest in and

responsibility for the conduct of any gaming operation.” 25 C.F.R. § 522.4(b)(1)

(Class II gaming) (emphasis added); accord 25 C.F.R. § 522.6(c) (Class III

gaming).

The regulations also reflect IGRA’s grant of broad enforcement authority to

the Commission by providing that the Commission may issue a “notice of violation

to any person for violations of any provision of the Act * * * or of any tribal

ordinance or resolution approved by the [Commission’s] Chair.” 25 C.F.R. §

573.3(a) (emphases added). The regulations define “enforcement action” as:

any action taken by the Chair under 25 U.S.C. 2713 against any person engaged in gaming, for a violation of any provision of IGRA,


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the regulations of this chapter, or tribal regulations, ordinances, or resolutions * * * including, but not limited to, the following: A notice of violation; a civil fine assessment; or an order for temporary closure.

25 C.F.R. § 502.24 (emphases added). II. STATEMENT OF FACTS

A. THE 1986 AGREEMENTS FOR THE FOND DU LUTH CASINO

In 1986 – two years before Congress enacted IGRA – the City and the Band

agreed to develop the “Fond du Luth Casino” (or “Casino”). They entered into the

1986 agreements under which the Band purchased land in downtown Duluth and,

with the City’s approval, transferred the land to the United States. AR 988; AR

1069; Dkt. 12 at 2. The United States placed the land in trust for the Band and

authorized the operation of gaming activities on the Band’s land. Id.

The 1986 agreements also created the Duluth-Fond du Lac Economic

Development Commission, which consisted of appointees from both the Band and

the City, and was to manage the Casino’s gaming activities. AR 993-95. The

1986 agreements gave the Development Commission the power to license,

regulate, and operate all gaming activities at the Casino site. AR 1010-14. The

agreements provided that the net proceeds from gaming would be divided as

follows: 24.5% to the City, 25.5% to the Band, and 50% to the Development

Commission. AR 1019-20.


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B. THE GAMING COMMISSION’S REVIEW OF THE 1986

AGREEMENTS

In 1989, the Band sued the City in the United States District Court for the

District of Minnesota, alleging that the 1986 agreements violated IGRA’s sole

proprietary interest and responsibility requirement. Fond do Lac Band of Lake

Superior Chippewa Indians v. City of Duluth, No. 5:89-cv-163 (D. Minn. 1989);

AR 563; AR 686-701. In December 1990, the Minnesota district court dismissed

the Band’s lawsuit without prejudice, finding that “the public interest is best

served” by allowing the newly established Gaming Commission to review the 1986

agreements “and make its recommendations.” AR 715.

In 1991, following the Minnesota district court’s directive, the Band

petitioned the Gaming Commission to review the legality of the 1986 agreements

in light of IGRA’s enactment. AR 2807-08. By letter dated September 24, 1993,

the Commission’s first appointed Chairman, Anthony Hope, advised the Band and

the City that the 1986 agreements violated IGRA’s “sole proprietary interest and

responsibility” requirement because, under the agreements, the Band did not retain

sole ownership or control of the Casino. AR 285-86. Chairman Hope explained,

however, that the Gaming Commission would defer any enforcement action under

IGRA to give the parties an opportunity to negotiate. AR 285.


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C. THE 1994 AGREEMENTS, THE GAMING COMMISSION’S REVIEW

OF THOSE AGREEMENTS, AND THE 1994 CONSENT ORDER

The City and the Band restructured the 1986 agreements as part of a

settlement effort. AR 1146-47. The ensuing 1994 Agreements consisted of a two-

term lease. The first term was to run for 17 ½ years, from September 30, 1993 to

March 31, 2011, and the second term was to run for 25 years, from April 1, 2011 to

March 31, 2036. AR 1135-61; AR 2936-41. The Casino facility and the land on

which it was located (which was held by the United States in trust for the Band)

were leased to the Development Commission, which in turn subleased them to the

Band. AR 1139. For the Agreement’s first term, the Band was required to pay the

Development Commission 19% of the gross revenue from video games of chance.

AR 1149. The payments were assigned to the City. AR 1226. The payments were

not fixed for the second, 25-year term of the Agreements; the parties were to

negotiate the payments for that term. AR 1151.

The Tribal-City Accord portion of the 1994 Agreements provided that any

change the Band made to its gaming ordinances or regulations that applied to the

Casino would not become effective unless the City consented in writing. AR 40;

AR 1226. The City also reserved the right to review and object to the Band’s

licensing decisions. AR 1235. The Band was required to give the City access to

any and all records of the gaming operation. AR 40; AR 1228.


9

On June 13, 1994, the City and the Band sent their proposed 1994

Agreements to the Gaming Commission for review. AR 37. Three days later, on

June 16, 1994, Chairman Hope responded in a two-page letter (the “1994 Letter”)

stating that “[w]e have reviewed the proposed settlement and have concluded that

this agreement returns full ownership and control of the Fond du Luth Casino to

the Band and is consistent with the requirements of IGRA.” AR 325. The 1994

Letter further stated that “the finalization of this settlement agreement will make it

unnecessary for the NIGC to initiate an enforcement action to bring the Fond du

Luth Casino into compliance with IGRA.” Id.

After Chairman Hope issued his letter, the Band filed a new civil action in

the Minnesota district court. Fond du Lac Band of Lake Superior Chippewa

Indians v. City of Duluth, No. 5:94-cv-82 (D. Minn. 1994); AR 738-39. Also, on

June 20, 1994, Chairman Hope sent a two-page “Report and Recommendation” to

the Minnesota district court, pursuant to that court’s December 1990 order

recommending that the City and Band send the 1986 agreements to the Gaming

Commission. AR 328; see supra at Section II. A. Chairman Hope informed the

court that “the settlement agreement recently concluded between the Fond du Lac

Band and the City of Duluth returns ownership and control of the Fond du Luth

Casino to the Band and is fully consistent with the IGRA.” AR328. The Chairman


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“recommended that th[e] settlement agreement be approved.” Id. On June 20,

1994, the City and the Band executed the 1994 Agreements. AR1146-47.

On June 22, 1994, the Band and the City filed a stipulation and consent

order with the Minnesota district court, and the Band moved to dismiss its

complaint. AR 738-42; AR 284. The stipulation provided that “the 1994

Agreements and all of its attachments ‘are in their entirety expressly incorporated

into this Stipulation and Consent Order, and are hereby expressly made a part of

it.’” AR 742; AR 738-42, AR 284. The Minnesota district court entered the

Consent Order, approved the parties’ stipulation, and ordered that the court would

retain jurisdiction over the matter for purposes of ensuring the parties’ compliance

with the 1994 Agreements. AR 738-43. The Minnesota district court continued to

retain jurisdiction over the Consent Order while this matter was before the district

court in this case. AR 742.2

2 See City of Duluth v. Fond du Lac Band of Lake Superior Chippewa Indians,

708 F. Supp. 2d 890 (D. Minn. 2010); City of Duluth v. Fond du Lac Band of Lake Superior Chippewa Indians, No. 09-cv-2668, 2011 WL 1832942 (D. Minn. Apr. 28, 2011); City of Duluth v. Fond du Lac Band of Lake Superior Chippewa Indians, No. 09-cv-2668, 2011 WL 1832786 (D. Minn. May 13, 2011); City of Duluth v. Fond du Lac Band of Lake Superior Chippewa Indians, 830 F. Supp. 2d 712 (D. Minn. Nov. 2011); City of Duluth v. Fond du Lac Band of Lake Superior Chippewa Indians, 702 F.3d 1147 (8th Cir. 2013); Duluth v. Fond du Lac Band of Lake Superior Chippewa Indians, 977 F. Supp. 2d 944 (D. Minn. 2013); City of Duluth v. Fond du Lac Band of Lakdune Superior Chippewa Indians, 785 F.3d 1207 (8th Cir. 2015). But see City of Duluth v. Fond du Lac Band of Lake Superior Chippewa Indians, No. 09-cv-2668, 2015 WL 4545302, at *5 (D. Minn. Jul. 28,


11

D. THE BAND’S RENT PAYMENTS UNDER THE 1994 AGREEMENTS

From 1994 until the last quarter of 2008, the City and Band performed under

the terms of the 1994 Agreements and the Consent Order. Dkt. 36 at 3. During

that period, the Band paid the City approximately $75 million in rent for the

building the Band owned on its trust land. AR 34; AR 49. In August 2009, the

Band announced that it would be withholding all future rent payments under the

Agreements because it had determined, among other things, that the City had “no

assertable proprietary interest” in the Casino, that the City’s consent to “the

operation of a casino on [reservation] land is not, and never has been, legally

necessary,” and that “the agreements were erroneously premised upon those

assumptions.” AR 1366-67; AR 1364-65. In September 2009, the City sued the

Band for breach of the 1994 Agreements and to enforce the 1994 Consent Order.

See City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 708 F. Supp.

2d 890, 894 (D. Minn. 2010). In its Answer, the Band asserted that it was not

liable for the withheld payments because the 1994 Agreements violated IGRA’s

“sole proprietary interest” mandate. AR 1425-46. The Band counterclaimed for a

refund of all rent paid to the City under the 1994 Agreements for the same reason.

AR 1441-46.

2015) (“[T]his Order finally resolves all remaining issues between the parties in this matter.”); see also infra at Section II.


12

E. THE GAMING COMMISSION’S 2010-2011 REVIEW OF THE 1994

AGREEMENTS AND THE RESULTING 2011 NOTICE OF VIOLATION

On August 16, 2010, while the City’s breach-of-contract lawsuit was

pending, the Band requested that the Gaming Commission reexamine the 1994

Agreements to determine whether they conformed to IGRA. AR 673-77. The

Commission’s Chairwoman agreed and directed the Commission’s Enforcement

Division and Office of General Counsel to review the matter. See AR 614-15. The

Chairwoman requested that the Band and the City provide briefing as to whether

the 1994 Agreements complied with IGRA. Id. Both parties submitted detailed

briefs, accompanied by exhibits. AR 171-92; AR 556-95.

On July 12, 2011, the Gaming Commission issued a 19-page NOV to the

Band pursuant to its enforcement authority under 25 U.S.C. § 2713(a) and 25

C.F.R. § 753.3(a). AR 33-51. Writing on behalf of the Commission, the

Chairwoman concluded that the Agreements “grant the City of Duluth * * * an

unlawful proprietary interest in the Band’s gaming activity and prevent the Band

from possessing the sole responsibility for the gaming activity” and that the

Agreements violated: (1) IGRA, 25 U.S.C. § 2710(b)(2)(A) (the sole-proprietary-

interest-and-responsibility provision), (2) the Commission’s regulations, 25 C.F.R.

§ 522.4(b)(1) (same for Class II gaming), and 25 C.F.R. §522.6(c) (same for Class

III gaming), and (3) the Band’s gaming ordinance. AR 33. The NOV directed the


13

Band to “cease performance under the 1994 Agreements of those provisions

identified in this NOV as violating IGRA.” AR 50.

The Commission based its conclusion that the Agreements violated IGRA’s

sole-proprietary-interest-and-responsibility requirement on the primary criteria the

agency uses to analyze the mandate, which have been the focus of over 50 legal

opinions prepared by the Commission’s Office of General Counsel since 2003: (1)

“the term of the relationship,” (2) “the amount of revenue paid to the third party,”

and (3) “the right of control over the gaming activity provided to the third party.”

AR 45; see also AR 34.3 In brief, an improper proprietary interest exists in

agreements where “a party, other than a tribe, receives a high level of

compensation, for a long period of time, and possesses some aspect of control.”

AR 45. In such instances, the compensation was typically based on a “significant

3 Generally, the Commission’s Office of General Counsel issues legal advisory

opinions in two circumstances. First, as a service to the regulated community, the Office will voluntarily review unexecuted drafts of agreements and other documents concerning a tribe’s future or existing gaming activity, and then issue legal advisory opinions as to whether the documents comply with IGRA. If the documents under consideration have been executed, then the focus of the Office shifts from issuing legal advisory opinions to determining whether the documents, either on their face or as executed, violate IGRA and, if so, whether they warrant, for example, an investigation and possible enforcement action. In the latter instance, the Office typically will not issue a legal advisory opinion outside of the agency, but rather will provide its views to the Chair. The Commission relies on the Office of General Counsel’s analyses, as articulated in previous legal advisory opinions and as applied to the relevant facts, when deciding, for example, whether an enforcement action is warranted based on an IGRA violation.


14

percentage of net gaming revenue and often had terms beyond 5 years.” AR 45

(citation omitted). The Commission pointed out that a third party’s “right of

control over tribal regulatory decisions,” such as licensing, is an indicator that the

tribe is not maintaining sole responsibility for the conduct of the gaming. AR 46.

And “where a third party receives a high level of compensation for a long period of

time,” the Commission determined that it may be appropriate to examine the

“nature of the services” received by the tribe to determine whether the

compensation and duration are warranted. Id.

The Commission found that indicia of a third-party proprietary interest –

namely, a lengthy term, control over parts of the gaming activity, and high

compensation with little to no risk – “are embodied in the 1994 Agreements.” AR

46. First, the 1994 Agreements have a long term – an initial term of 17 ½ years

and an automatic extension of an additional 25 years. AR 39; AR 41; AR 48.

Second, the 1994 Agreements highly compensated the City. The Commission

determined that “[b]etween June 1994 and August 6, 2009, the Band paid the City

approximately $75,874,407.66 to rent its own building on trust property held for its

benefit by the United States.” AR 49.

Third, the Agreements give the City a high degree of control. Under the

Tribal-City Accord portion of the 1994 Agreements, “any change in the Band’s

gaming ordinance or regulations will only be effective after the City has consented


15

in writing unless the change is required by federal law or by Tribal-State compact.”

AR49 (citation omitted); see also AR 40; AR 34. The Accord also “grants the City

the right to review and voice objections to the Band’s licensing of casino

employees.” AR 49; see also AR 40 (citation omitted); AR 34. The Commission

explained that “[t]he licensing of key employees and primary management official

is a core component of [a tribe’s] regulatory responsibility.” AR 40 (citing 25

U.S.C. § 2702(2)).

In addition, the Tribal-City Accord requires the Band to “provide a

representative of the City access to review and copy any and all records of the

gaming operations.” AR 50 (citation omitted); see also AR 40. “This level of

access,” the Commission continued, “is unusual considering that IGRA does not

grant the City any role in the regulation of Indian gaming.” AR 40 (emphasis in

original).

The Gaming Commission thus concluded that the 1994 Agreements violated

IGRA’s mandate that the Band retain the sole proprietary interest in and

responsibility for the gaming activity. AR 46-47.

F. THE MINNESOTA DISTRICT COURT’S 2011 ORDER GRANTING

THE BAND PARTIAL RELIEF FROM THE CONSENT ORDER

In July 2011, after the NOV issued, the Band filed in the Minnesota district

court a motion under Fed. R. Civ. P. 60(b) for relief from the 1994 Consent Order.

That court issued an order granting the motion in part and denying it in part. See


16

City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 830 F. Supp. 2d

712, 726 (D. Minn. 2011). Relying in part on the NOV, the order relieved the

Band of future compliance with the 1994 Agreements. Id. at 724-26. However,

the order denied the Band’s request to be relieved of its obligation to pay rent to

the City for the period from August 2009 to July 2011 and declined to allow the

Band to pursue its counterclaims for a refund of all rent already paid to the City

before 2009. Id. at 726-28.

Both the Band and the City appealed from the Minnesota district court’s

Rule 60(b) order. City of Duluth v. Fond du Lac Band of Lake Superior Chippewa,

702 F.3d 1147 (8th Cir. 2013). The City appealed the prospective dissolution of

the 1994 Consent Order as to the 2011-2036 term. The Band appealed the portion

of the district court’s order compelling it to pay the rent it had withheld from 2009

to 2011, id.; but the Band did not appeal the ruling that it could not recover the $75

million already paid to the City from 1994 to 2009.4

4 The Eighth Circuit affirmed the ruling relieving the Band of prospective

compliance and reversed and remanded to the Minnesota district court the denial of the Band’s request for relief from the judgment requiring it to pay the City the rent withheld from 2009 to 2011. Id. at 1156. The district court again denied the Band’s request. See City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 977 F. Supp. 2d 944 (D. Minn. 2013). The Band appealed in November 2013. See infra at Section H (for subsequent 2015 rulings in the Minnesota district-court litigation).


17

G. PROCEEDINGS BELOW

In February 2013, the City brought suit against the Gaming Commission,

challenging the 2011 NOV. Dkt. 1. The Commission filed a motion to dismiss the

suit for lack of jurisdiction (Dkt. 8), which the district court denied (Dkts. 11, 12).

The parties filed cross-motions for summary judgment (Dkt. 25 (City); Dkt. 26

(Commission)), and the Band filed a brief as amicus curiae (Dkt. 29).

On March 31, 2015, the district court issued a published decision, granting

summary judgment for the Commission on all claims. City of Duluth v. National

Indian Gaming Commission, No. 13-246, 2015 WL 1447548 (D.D.C. Mar. 31,

2015); Dkt. 36. The court held that “there is no basis for vacating the NOV or

granting any other relief with respect to the NOV.” Dkt. 36 at 5.

The district court rejected the City’s argument that the Commission

exceeded its authority under IGRA by issuing the 2011 NOV. Id. at 5-8. The

court concluded that “the NOV was properly issued pursuant to section 2713 [of

IGRA] and that no other provisions of the Act bar the Commission from using its

enforcement authority as it did in this case.” Id. at 6. As to the question of

applying deference under Chevron, U.S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984), to examine the Commission’s scope of

enforcement authority, the court determined that “the statutory provision


18

supporting the Commission’s enforcement authority is unambiguous and,

therefore, no deference is due.” Dkt. 36 at 6 n.5.

The court rejected the City’s argument that the Commission did not have

authority to issue the NOV under IGRA Sections 2711 or 2712. Id. at 6. The court

explained that the City’s arguments about other sections of IGRA were relevant

only “insofar as those sections would prevent the Commission from exercising its

authority under section 2713” and concluded that “the sections on which [the City]

relies * * * do not preclude the Commission from exercising the enforcement

authority provided by section 2713.” Id.

As for Section 2712, the City asserted that, in 1994, the Commission

reviewed and approved the 1994 Agreements under Section 2712 (which provides

for Gaming Commission review of tribal ordinances, tribal resolutions,

management contracts, and collateral agreements existing at the time of IGRA’s

enactment); and the City argued that, once approval allegedly was given under

Section 2712, the Commission was precluded from subsequently exercising its

Section 2713 enforcement authority as to those Agreements. Id. at 8. The court

determined that it did not need to resolve the issue as to “the nature of the

Commission’s actions in 1994” because, among other things, the City had

identified “no source of authority that would foreclose the agency’s 2011


19

enforcement action based solely on the previous actions it took.” Id. (emphases

added).

As to IGRA’s requirement that “Indian tribe[s] will have the sole proprietary

interest and responsibility for the conduct of any gaming activity,” 25 U.S.C. §

2710(b)(2)(A)), the district court found:

“Plaintiff only halfheartedly challenge[d] the underlying substantive interpretation of the ‘sole proprietary interest’ requirement.” Dkt. 36 at 9.

“Plaintiff d[id] not argue that the Commission’s interpretation of the statutory phrase in question is not ‘reasonable.’” Id. at 10.

“Nowhere does Plaintiff present an argument why the Commission’s interpretation of ‘sole proprietary interest’ should be reversed by this Court on the merits.” Id. at 11.

The district court also disagreed with the City’s argument that the NOV

must be set aside because it is impermissibly retroactive. Id. at 12-15. As a

threshold matter, the court held that “the relationship between the parties regarding

the gaming facility is governed by the Consent Decree entered in 1994 by the

District Court for the District of Minnesota.” Id. at 13. The court determined that

“relief from that Consent Decree would be necessary in order for the NOV to have

any effect whatsoever during the period governed by that court order.” Id.

“Accordingly,” the court concluded, “without relief from the Consent Decree, the

NOV can have no retroactive effect in the first instance.” Id.; see also id. at 6 n.4.


20

Nevertheless, the district court went on to determine whether the NOV had

had any “retroactive effects.” Id. at 13. The district court “review[ed] each period

to which the NOV is applicable” and concluded that the NOV had had no

retroactive effects for any of the years before the NOV was issued in 2011. Id. at

14. The court dismissed the City’s action “in its entirety” and entered final

judgment. Id. at 15.

H. THE MINNESOTA DISTRICT COURT’S 2015 ORDER GRANTING

THE BAND RELIEF FROM THE 2009-2011 UNPAID RENTAL

PAYMENTS

Approximately five weeks after the district court rendered its decision in this

litigation, the Eighth Circuit again reversed the Minnesota district court’s denial of

the Band’s request for relief as to the rent it withheld from 2009 to 2011. See City

of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 785 F.3d 1207 (8th

Cir. 2015); see also supra at 16 note 4. The Eighth Circuit instructed the

Minnesota district court to

[g]ive proper weight to the congressional intent that tribes be the primary beneficiaries of Indian gaming as well as other relevant factors [including] the facts that the City was on notice in 2009 of relevant actions and policies of the Gaming Commission and its warning in the 2011 Notice of Violation that the tribe would violate IGRA by making further rent payments to the city.

785 F.3d at 1212.


21

On remand, the Minnesota district court granted the Band’s request for

relief. City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, No. 09-cv-

2668, 2015 WL 4545302 (D. Minn. July 28, 2015); see also infra at Section II.

STANDARD OF REVIEW

The district court’s summary judgment order is reviewed de novo, and the

Commission’s issuance of the 2011 NOV is reviewed under the highly deferential

standards of the Administrative Procedure Act (“APA”). Am. Wildlands v.

Kempthorne, 530 F.3d 991, 997-98 (D.C. Cir. 2008). Under those standards, the

Commission’s action may be set aside only if it was “arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2).

In reviewing the agency’s decision, the Court is to determine whether the decision

“was based on a consideration of the relevant factors and whether there has been a

clear error of judgment.” Lubow v. U.S. Dep’t of State, 783 F.3d 877, 887 (D.C.

Cir. 2015) (internal quotation marks omitted).

The Commission’s factual findings must be upheld if supported by

substantial evidence. See Ctr. for Auto Safety v. Fed. Highway Admin., 956 F.2d

309, 314 (D.C. Cir. 1992) (“An agency action is arbitrary and capricious if it rests

upon a factual premise that is unsupported by substantial evidence.”). A decision

reviewed under the substantial-evidence standard can be reversed only if the

evidence “was such that a reasonable factfinder would have to conclude” in


22

challenger’s favor. INS v. Elias-Zacarias, 502 U.S. 478, 481 (1992). The

substantial-evidence standard is even more deferential than the “clearly erroneous”

standard for appellate review of trial-court findings of fact. Dickinson v. Zurko,

527 U.S. 150, 164 (1999).

SUMMARY OF ARGUMENT

In 2011, the Gaming Commission had the authority to reexamine the 1994

Agreements for compliance with IGRA’s “sole proprietary interest and

responsibility” requirement and to issue the 2011 Notice of Violation when it

determined that the 1994 Agreements did not comply with this requirement. The

NOV does not constitute an impermissible retroactive reversal of the

Commission’s 1994 review of the Agreements. Nor is the Commission’s

conclusion that the 1994 Agreements violated IGRA arbitrary or capricious. The

district court should be affirmed.

1. As a general rule, an agency may revisit its previous interpretation of a

statute it administers. The Commission’s reexamination of the 1994 Agreements

and issuance of the NOV fall squarely within the broad enforcement authority that

Congress granted the Commission under Section 2713. The NOV was expressly

issued under Section 2713, and the City has not presented any argument for

suspending the Commission’s enforcement authority.


23

The City instead presents an untenable set of assertions under IGRA

Sections 2712 and 2714. The City argues that, in 1994, the Commission’s then-

Chairman Hope “approved” the Agreements under Section 2712, and that such

approval became a “final agency decision” under Section 2714 and the

Administrative Procedure Act. Even if the City has correctly characterized

Chairman Hope’s 1994 determination, those Sections did not preclude the

Commission from reexamining the Agreements for IGRA violations in 2011.

In any event, Chairman Hope did not review the 1994 Agreements under

Section 2712. That Section provides for the Commission’s review of specific

categories of tribal-gaming arrangements that tribes adopted or entered into before

the enactment of IGRA, and the Agreements do not fall into any of those

categories. The City itself argued as much in the district court. And whether or

not Chairman Hope’s 1994 decision was a “final agency decision” under Section

2714 and the APA, the Commission’s discretion to change its position remained

intact.

2. The City’s contention that the NOV is “impermissibly retroactive”

simply recasts its argument that the Commission may not change its position.

Nonetheless, a court may deny retroactive effect to rules announced in agency

adjudications where the adjudications substitute new law for old law that was

reasonably clear, and where doing so is necessary to protect the settled


24

expectations of those who relied on the prior rule. The City should have been

aware that the legal landscape had changed since the 1994 decision. The NOV

represented the Commission’s view that had developed during the 17 years since

the 1994 decision issued, as documented in agency enforcement actions and

dozens of General Counsel legal opinions. But even assuming the NOV

substituted new law for the 1994 decision, which “was reasonably clear,” the City

presents no argument showing that it relied to its detriment on Chairman Hope’s

1994 decision. Thus, the City has not established that the NOV is impermissibly

retroactive.

3. The Commission’s NOV decision is neither arbitrary nor capricious. The

Commission found that multiple provisions of the 1994 Agreements, on their face

and as implemented, demonstrated that the Band did not have the required sole

proprietary interest in and responsibility for the gaming activity at the Fond du

Luth Casino. The City’s complaints about the NOV’s findings arise largely from

the fact that IGRA does not define or establish specific criteria for the sole-

proprietary-interest-and-responsibility mandate and that the Commission has no

precedents that apply the mandate to arrangements like the Agreements. Under

such circumstances, the Commission, as the agency charged with implementing

IGRA’s enforcement provisions, was reasonable in drawing in part from other


25

relevant statutory criteria and agency precedents for guidance in interpreting the

statute’s mandate.

The City’s expert evidence concerning the City’s share of the Casino profits,

the City’s access to the Band’s records, and the City’s control over the Band’s

changes to its gaming ordinance and regulations provides no basis for disturbing

the NOV. The findings of the City’s expert were based on his review of tribal-

state compacts, which are governed by specific statutory and regulatory provisions

that do not encompass agreements between tribes and local governments. In its

papers to the Commission, the City indeed acknowledged that, under IGRA,

municipalities are statutorily different from states.

ARGUMENT

I. THE GAMING COMMISSION HAD THE DISCRETION IN 2011 TO

REEXAMINE THE 1994 AGREEMENTS FOR COMPLIANCE WITH

IGRA AND TO ISSUE THE NOTICE OF VIOLATION.

A. AS A GENERAL RULE, AN AGENCY MAY REVISIT A PAST

DECISION AND CHANGE ITS POSITION.

The City contends that Chairman Hope’s decision in his 1994 Letter

constituted an “approval” of the 1994 Agreements under Section 2712 of IGRA

(Br. 4, 9, 12, 14-16, 21, 22, 29), that his decision was a “final agency action” under

Sections 2712 and 2714 (Br. 1, 9, 12-15, 16, 17-18, 29), and that, as a result, the

1994 decision could not be reopened and the 1994 Agreements could not be


26

reexamined (Br. 1, 11-15, 16, 17-18, 29). But the City fails to consider that the

longstanding, general rule is that an agency may both revisit a prior decision and

change its position.

This Court has aptly held that “an agency is at liberty to revisit existing

interpretations of statutes that the agency is called on to administer.” Hall v.

Baker, 867 F.2d 693, 696 (D.C. Cir. 1989). In an equally generous variation on

this theme, the Court later held that “an agency is not forever foreclosed from

revisiting existing interpretations of statutes that the agency is called on to

administer.” Algonquin Gas Transmission Co. v. FERC, 948 F.2d 1305, 1315-16

(D.C. Cir. 1991) (quoting Hall, 867 F.2d at 696) (internal quotation marks

omitted). What is required from the agency is that in changing its course it “must

indicate that prior policies are being expressly changed and not casually ignored.”

Algonquin Gas, 948 F.2d at 1316 (quoting Thomas Radio Co. v. FCC, 716 F.2d

921, 924 (D.C. Cir. 1983)).

This Court more recently held that an agency may change its precedents,

particularly if it deems them incorrect:

It is well understood that “[a]n agency is free to discard precedents or practices it no longer believes correct. Indeed we expect that an[] agency may well change its past practices with advances in knowledge in its given field or as its relevant experience and expertise expands. If an agency decides to change course, however, we require it to supply a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored.”


27

Williams Gas Processing-Gulf Coast Co., L.P. v. FERC, 475 F.3d 319, 326 (D.C.

Cir. 2006) (quoting Nuclear Energy Inst., Inc. v. EPA, 373 F.3d 1251, 1296 (D.C.

Cir. 2004)); see also Chisholm v. FCC, 538 F.2d 349, 364 (D.C. Cir. 1976) (“[A]n

administrative agency is permitted to change its interpretation of a statute,

especially where the prior interpretation is based on error, no matter how

longstanding.”); Nat’l Ass’n of Homebuilders v. EPA, 682 F.3d 1032, 1037-38

(D.C. Cir. 2012) (a change in position does not have to be based on a change in

facts); Dun & Bradstreet Corp. Found. v. U.S. Postal Serv., 946 F.2d 189, 193 (2d

Cir. 1991) (“It is widely accepted that an agency may, on its own initiative,

reconsider its interim or even its final decisions, regardless of whether the

applicable statute and agency regulations expressly provide for such review.”).

The Supreme Court has made plain that “[a]n initial agency interpretation is

not instantly carved in stone.” Nat’l Cable & ‘Telecomm. Ass’n v. Brand X

Internet Servs., 545 U.S. 967, 982 (2005). “On the contrary, the agency must

consider varying interpretations and the wisdom of its policy on a continuing

basis.” Id. (quoting Chevron, 467 U.S. at 863-64) (ellipses omitted). “An agency,

like a court, can undo what is wrongfully done by virtue of its order.” United Gas

Imp. Co. v. Callery Properties, Inc., 382 U.S. 223, 229 (1965). More specifically,

an agency “is not estopped from changing a view [it] believes to have been

grounded upon a mistaken legal interpretation.” Good Samaritan Hosp. v. Shalala,


28

508 U.S. 402, 417 (1993) (citing Automobile Club of Mich. v. Commissioner, 353

U.S. 180, 180-83 (1957)); see also id. (“Indeed, an administrative agency is not

disqualified from changing its mind.”) (citation and internal brackets omitted); cf.

NLRB v. J. Weingarten, Inc., 420 U.S. 251, 265-66 (1975) (“The use by an

administrative agency of the evolutional approach is particularly fitting. To hold

that the Board’s earlier decisions froze the development of [an] important aspect of

the national labor law would misconceive the nature of administrative

decisionmaking.”).

The Supreme Court most recently confirmed that an agency may change

course in FCC v. Fox Television Stations, Inc., 566 U.S. 502, 512-17 (2009).

Indeed, the Supreme Court explained that an agency is not held to a higher

standard simply because it changes course. “[T]he [APA] makes no distinction

* * * between initial agency action and subsequent agency action undoing or

revising that action.” Id. at 515. An agency “need not demonstrate to a court’s

satisfaction that the reasons for the new policy are better than the reasons for the

old one; it suffices that the new policy is permissible under the statute, that there

are good reasons for it, and that the agency believes it to be better, which the

conscious change of course adequately indicates.” Id.


29

Against this backdrop, the City has the burden of demonstrating that the

Gaming Commission is precluded from revisiting its past decisions and changing

its position. The City has failed to meet that burden.

B. NO PROVISION OF IGRA PRECLUDED THE GAMING

COMMISSION FROM REEXAMINING THE 1994 AGREEMENTS IN

2011 AT THE REQUEST OF THE BAND.

The City asserts (Br. 11) that IGRA’s unambiguous “statutory text

foreclosed the agencies [sic] assertion of authority.” See also Br. 11-17. But the

City has failed to identify any text that does so.

The Gaming Commission issued the 2011 NOV pursuant to its Section 2713

enforcement authority. See AR 35 (expressly so stating). Congress granted the

Gaming Commission broad enforcement authority in Section 2713. See supra at

Section I (Legal Background). It provides that the Commission’s Chairman has

the “authority” to levy and collect fines “for any violation of any provision” of

IGRA or its implementing regulations. 25 U.S.C. § 2713(a)(1) (emphasis added).

The regulations implementing IGRA similarly provide for the Commission’s broad

exercise of enforcement authority, stating that the Chairman “may issue a notice of

violation to any person for violations of any provision of the Act.” 25 C.F.R.

§ 573.3(a) (emphasis added). Neither IGRA nor its implementing regulations

identify any circumstance in which the Commission is precluded from exercising

its enforcement authority when it discovers a violation of the statute.


30

The district court properly concluded that “in issuing the NOV, the

Commission was acting within the scope of the enforcement authority provided to

it by section 2713.” Dkt. 36 at 8. The City does not point to any language in

Section 2713 or its implementing regulations that prohibits the Commission from

reexamining a tribe’s compliance with IGRA.5

The City instead relies (Br. 12-18) on Sections 2712 and 2714. It argues

first that Chairman Hope “approved” the 1994 Agreements under Section 2712.

The City then argues that Section 2714 provides that a decision under Section 2712

is “final,” and concludes from this that the Commission is precluded from

“reopen[ing]” the 1994 determination (Br. 1, 12, 15, 17, 29) or conducting a

“second” review of the 1994 Agreements (Br. 11-12).

The City’s argument is wrong for many reasons, but the most obvious one is

that, even if Chairman Hope’s 1994 determination was an “approval” under

Section 2712 (Br. 4, 9, 12, 14-16, 21, 22, 29) and a “final agency decision” under

Sections 2712 and 2714 (Br. 1, 9, 12-15, 16, 17, 29), neither Section 2712 nor

5 Those failures, as a preliminary matter, should be deemed a waiver of any

such challenges. See Bode & Grenier, LLP v. Knight, No. 14-7104, 2015 WL 6405279, at *7 (D.C. Cir. Oct. 23, 2015) (finding waiver where appellant “intimates the district court erred * * * but does not explain how the judge erred”); see also Am. Wildlands v. Kempthorne, 530 F.3d at 1001 (“Issues may not be raised for the first time in a reply brief”) (quoting Rollins Envtl. Servs. v. EPA, 937 F.2d 649, 652 n.2 (D.C. Cir. 1991)). Those failures also establish that this Court may affirm the district court’s ruling that the Commission had authority under Section 2713 to issue the NOV.


31

Section 2714, separately or in combination, precluded the Gaming Commission

from reexamining that determination.6 The district court correctly resolved the

dispute as to Chairman Hope’s 1994 determination on that basis. The court

acknowledged that the parties disputed “the nature of the Commission’s actions in

1994,” but determined that it did not have to resolve that dispute because

“[r]egardless of the statutory category in which those actions fell * * * th[ey] did

not bar the Commission from engaging in an enforcement action in 2011.” Dkt. 36

at 8. The court correctly found that the City had identified “no source of authority

that would foreclose the agency’s 2011 enforcement action based solely on the

previous actions it took.” Dkt. 36 at 8 (emphasis added).

In addition, Chairman Hope’s review of the 1994 Agreements was not

undertaken pursuant to Section 2712. Section 2712 provides the following:

As soon as practicable after the organization of the Commission, the Chairman shall notify each Indian tribe or management contractor who, prior to October 17, 1988, adopted an ordinance or resolution authorizing class II gaming or class III gaming or entered into a management contract, that such ordinance, resolution, or contract, including all collateral agreements relating to the gaming activity, must be submitted for his review within 60 days of such notification. Any activity conducted under such ordinance, resolution, contract, or agreement shall be valid under this chapter, or any amendment made by this chapter, unless disapproved under this section.

6 The United States does not concede that Chairman Hope’s 1994

determination was either an “approval” of the 1994 Agreements under Section 2712 (Br. 4, 9, 12, 14-16, 21, 22, 29) or a “final agency decision” under Sections 2712 and 2714 (Br. 1, 9, 12-15, 16, 17-18, 29). See, e.g., Dkt. 26 at 15-17; Dkt. 33 at 4, 6, 7.


32

25 U.S.C. § 2712(a) (emphases added). The 1994 Agreements are not fairly

characterized as (1) an ordinance, (2) a resolution, (3) a management contract,7 or

(4) a collateral agreement.8 Id.

The City did not dispute this in the district court. In fact, the City argued

affirmatively that the Commission “had no authority to review the 1994

Agreements which were neither an ordinance, a management contract, or a

collateral agreement to a management contract.”9 Dkt. 25 at 27 (emphases

added); see also id. at 2. On appeal, the City does not argue that the 1994

Agreements satisfy the definition of any of the four categories of arrangements to

which Section 2712 applies. And, while the City’s silence prevents it from

contradicting the position it took in the district court, the City’s failure to

7 The Commission’s regulations implementing IGRA define a “management

contract” as “any contract, subcontract, or collateral agreement between an Indian tribe and a contractor or between a contractor and a subcontractor if such contract or agreement provides for the management of all or part of a gaming operation.” 25 C.F.R. § 502.15.

8 A “collateral agreement” is “any contract, whether or not in writing, that is related, either directly or indirectly, to a management contract, or to any rights, duties or obligations created between a tribe * * * and a management contractor or subcontractor.” 25 C.F.R. § 502.5 (emphases added).

9 The City’s failure to include “resolutions,” see 25 U.S.C. 2712(a), in that list

of Section 2712 categories to which the Agreements do not apply does not appear to be deliberate or significant. Dkt. 25 at 27. The City has never argued that the 1986 or 1994 Agreements are tribal “resolutions.”


33

affirmatively establish that the Agreements fall within one of the listed categories

is fatal to its argument on appeal.

Further, under Section 2712’s plain language, its provisions are triggered by

the Chairman, who is to give notice that the specific categories of arrangements

must be submitted for the Commission’s review within 60 days of such notice. 10

25 U.S.C. § 2712(a). The record in this case establishes that the City and Band

sent the 1986 agreements to the Gaming Commission at the behest of the

Minnesota district court, see AR 715; AR 327; supra at Section II. B (Statement of

Facts), and that they sent the 1994 Agreements to Chairman Hope on their own

accord, see AR 37; AR 1812-14.

Additionally, Chairman Hope wrote to the City’s counsel in 1991 and stated

that “the Commission will review the materials submitted by the Band and the City

and determine what role we might be able to play, if any.” AR 2806 (emphasis

added). The Chairman’s indication that the Commission might not have any role

to play as to the City and Band’s agreements belies the City’s position that the

Commission reviewed the agreements under the Chairman-initiated provisions of

Section 2712.

10 For clarification purposes, the City refers to the Commission’s ability to

review pre-IGRA arrangements under Section 2712 as the Commission’s “retroactive authority” or “retroactive power.” See e.g., Br. 14, 15.


34

Although the City repeatedly contends that, in 1994, the Gaming

Commission “approved” the 1994 Agreements under Section 2712 (Br. 4, 9, 12,

14, 19, 21, 22, 23, 29), the City does not identify anything in the record that

supports this contention. Neither the City nor the Band invoked Section 2712 in

asking the Commission to review either the 1986 agreements or the 1994

Agreements, and the Commission never stated that it was reviewing either the

1986 agreements or the 1994 Agreements under Section 2712.

The City also misplaces reliance on Section 2714. The City asserts that

Chairman Hope’s 1994 determination that the 1994 Agreements complied with

IGRA was a “final agency decision” under IGRA Section 2714, and within the

meaning of the Administrative Procedure Act, 5 U.S.C. § 704, and argues that the

subject of that determination could thus never be reexamined. Br. 12 (discussing

cases addressing finality under the APA); Br. 15 (alleging Chairwoman Stevens

failed to address the “finality of the NIGC’s action under Section 2714” and “failed

to cite to any statutory authority that expressly confers NIGC jurisdiction to reopen

and reverse a final action”). The City has the analysis backwards. The general

rule is that an agency may reexamine a prior position.

The characterization of an action as “final” is for the specific purpose of

determining when an action is judicially reviewable under the APA. IGRA Section

2714 therefore provides that “[d]ecisions made by the Commission pursuant to


35

sections [2710, 2711, 2712, and 2713] shall be final agency decisions for purposes

of appeal to the appropriate Federal district court pursuant to chapter 7 of Title 5.”

25 U.S.C. § 2714 (emphasis added). But the characterization of a Commission

decision as “final” does not mean that the agency cannot reexamine that decision in

the future. Neither Section 2714 nor the APA places any limitation on the

Commission’s authority to revisit its final agency decisions.

The City faults the NOV for failing to discuss and apply Sections 2712 and

2714, see, e.g., Br. 15, 16; but as we have demonstrated, nothing in the record

indicates that either Section 2712 or Section 2714 was implicated by the

Agreements that the Commission was reviewing. Accordingly, the Commission’s

failure to discuss provisions that had no application or relevance to its review, or to

the Agreements it was reviewing, was neither arbitrary nor capricious.

C. THE GAMING COMMISSION PROVIDED A REASONED ANALYSIS

FOR REACHING A DIFFERENT CONCLUSION THAN CHAIRMAN

HOPE DID IN 1994.

Consistent with the precedents of the Supreme Court and this Court

described above, the 2011 NOV provides reasoned explanations for reaching a

different conclusion than Chairman Hope did in 1994 regarding the 1994

Agreements’ compliance with IGRA. The Commission explains that the NOV

“[wa]s not issued lightly.” AR 33. Moreover, the agency examines the nature of,

and the circumstances surrounding, Chairman Hope’s review of the 1994


36

Agreements, as well as his conclusion that they complied with IGRA. The

Commission further explains why its conclusion differs from that of Chairman

Hope.

The Commission points out, as an initial matter, that the Chairman’s 1994

Letter did not contain any substantive analysis to support his conclusion (AR 34).

Rather, it contained only the conclusory statement that the City and Band’s

proposed settlement returns full ownership and control of the Casino to the Band

and is consistent with IGRA’s requirements. AR 37. In contrast, the Commission

analyzed the briefs and exhibits submitted by both parties on the issue of IGRA’s

sole-proprietary-interest-and-responsibility requirement. AR 38-39. The

Commission further drew upon the agency’s years of articulating and examining

that requirement and on the General Counsel’s legal opinions analyzing the

mandate. AR 45.

The Commission determined that the Chairman’s decision not to initiate an

enforcement action for the 1994 Agreements is “inconsistent” with his earlier

assessment of the 1986 agreements, see AR 37, because “the 1994 Agreements

carry forward the substantive provisions of the 1986 Agreements Chairman Hope

found to violate IGRA,” see AR 34 (emphasis added). The Commission focused

“on th[o]se same provisions,” which “provide an extraordinarily long term, an

unjustified high level of compensation, and third party control over aspects of the


37

gaming activity,” AR 37, all provisions that the Commission concluded were in

violation of IGRA.

In particular, the Commission conducted a direct comparison of those

provisions as they appeared in the 1986 agreements and the 1994 Agreements, see

AR 39-41, and found, for example, that: (1) “the City appears to have received

more money [under the 1994 Agreements] than it would have under the 1986

Agreements” (AR 39) (emphasis added), (2) both agreements had the same end

date of March 31, 2036 (id.), and (3) the 1994 Agreements gave the City the same

level of access to the Band’s gaming-operation records that the 1986 agreements

did, a factor that Chairman Hope found to violate IGRA (AR 40).

The Commission concluded that the 1994 Agreements “carry forward more

than just discrete provisions of the 1986 Agreements[,] but rather carry forward the

joint venture intent embodied in the 1986 Agreements.” AR 41. “The parties

share in the profits, with the City assuming no risk, providing no services

commensurate with the payments received[,] and the City retains control over the

gaming operation.” Id. The Commission also compared the 1994 Agreements to

arrangements at issue in prior matters before the agency and concluded that the

Agreements “are contrary to the Agency’s articulation of the sole proprietary

interest requirement.” AR 45-46.


38

In short, the Gaming Commission’s 2011 NOV provides a comprehensive

and well-reasoned explanation of why its position differs from that of Chairman

Hope as to the 1994 Agreements’ compliance with IGRA.

II. THE 2011 NOV IS NOT IMPERMISSIBLY RETROACTIVE.

The City’s argument that the NOV is “impermissibly retroactive” (Br. 18-

24) is another form of its argument, refuted above, that the Gaming Commission

may not change its position. See Br. 18 (“the NOV represents an improper

retroactive reversal of its prior decision”); see also Br. 19, 21-24.

The City acknowledges the general rule that “adjudications are inherently

retroactive.” Br. 18 (citing Catholic Health Initiatives Iowa Corp. v. Sebelius, 718

F.3d 914, 921 (D.C. Cir. 2013) (“it is black-letter administrative law that

adjudications are inherently retroactive”)). However, this Court explained in

Catholic Health that “[e]ven though adjudication is by its nature retroactive, we

have recognized that ‘deny[ing] retroactive effect to a rule announced in an agency

adjudication’ may be proper where the adjudication ‘substitut[es] * * * new law for

old law that was reasonably clear’ and where doing so is ‘necessary * * * to protect

the settled expectations of those who had relied on the preexisting rule.’” 718 F.3d

at 922 (quoting Williams Natural Gas Co. v. FERC, 3 F.3d 1544, 1554 (D.C. Cir.

1993)).


39

Here, the City argues (Br. 21) that the 2011 NOV substituted “new law for

old law that was reasonably clear” in that it reversed Chairman Hope’s conclusion

that the 1994 Agreements did not violate IGRA’s sole-proprietary-interest-and-

responsibility mandate. See also Br. 20-22. But the City fails to account for the

fact that the Commission’s decision in the 2011 NOV was founded on an agency

view that developed since the early years of the Commission through extensive

analyses of the mandate documented in over 50 General Counsel opinions and

final agency enforcement actions. AR 45. The City should have been aware that

the legal landscape had changed since 1994. See City of Duluth v. Fond du Lac

Band, 702 F.3d at 1155 (“By the time the Band began withholding rent in 2009,

the City was on notice that the NIGC’s views on the validity of the 1994 agreement

might well have changed. That was because after its initial approval of that

agreement, the NIGC issued several advisory letters pointing out that similar

arrangements between other tribes and casinos had been found to violate the sole

proprietary interest rule; see also City of Duluth, 708 F. Supp. 2d at 899-900

(discussing other NOVs sent by the NIGC in analogous cases).”); Am. Tel. & Tel.

Co. v. FCC, 454 F.3d 329, 332 (D.C. Cir. 2006) (rejecting AT&T’s reliance on the

FCC’s earlier determination where the statutory definitions “had not been fixed” at

the time of that determination and, in the intervening years, the agency developed

the definitions more fully, and explaining that, “in the face of such significant legal


40

change,” AT&T’s reliance on the old determination “could not have been

reasonable”).

But even assuming arguendo that the first Catholic Health condition is

satisfied here, i.e., that the NOV “substitut[es] * * * new law for old law that was

reasonably clear,” see 718 F.3d at 922, the City, like Catholic Health, “has

presented no explanation as to how it relied to its detriment on the alleged prior

policy.” Id. The City has merely made the bald assertion (Br. 22) that “past

actions were taken in good faith reliance of the NIGC’s approval.” See also Br. 9,

18, 22 (asserting without factual support that the NOV results in “manifest

injustice” to the City). But the City makes no showing of any detrimental reliance

or manifest injustice to support its claim. Consequently, the City has not

established that the NOV is impermissibly retroactive.

The City decided in 1986 to partner with the Band on developing a casino on

what was then non-Indian land in downtown Duluth, before IGRA was enacted. It

was at that point that the City decided to support the use of that parcel for Indian

gaming purposes in exchange for a percentage of the revenue stream from the

gaming activities. The City does not complain in this action that the Gaming

Commission’s 1993 determination that the 1986 agreements violated IGRA was

somehow impermissible, and it does not assert that it committed any additional

resources when it and the Band restructured the 1986 agreements in 1994 in an


41

effort to forestall a Gaming Commission enforcement action. Most importantly,

the City does not assert that it committed any additional resources to the Casino

after Chairman Hope determined in 1994 that the 1994 Agreements complied with

IGRA. The City, of course, complains about its loss of a revenue stream, but it has

not asserted that it has been saddled with any obligations that it undertook in

detrimental reliance on the 1994 determination that the restructured agreements

complied with IGRA.11

Moreover, in the unusual circumstances of this case, the Minnesota district

court and the Eighth Circuit have already addressed the equities of applying the

Gaming Commission’s 2011 decision to the Band’s obligation to pay rent under

the 1994 Agreements. In that series of decisions, those courts have determined that

the Band does not have a right to recoup the $75 million in rent payments it had

made to the City from 1994 to August 2009, that the Band does not have to pay the

unpaid rent from the first term, and that the Band does not have to pay the future

rent for the second term.12 See City of Duluth, 830 F. Supp. 2d 712; City of Duluth,

702 F.3d 1147; City of Duluth, 2015 WL 4545302.

11 The City’s failure to make any such assertions of detrimental reliance

constitutes a waiver of all such claims. See Bode & Grenier, 2015 WL 6405279, at *7; Am. Wildlands v. Kempthorne, 530 F.3d at 1001.

12 The City argues (Br. 19-20) that relieving the Band of its first-term unpaid rent obligation and relieving it of its second-term future rent obligation are both “retroactive effects.” The Eighth Circuit accepted the City’s characterization of relief from the first-term unpaid rent obligation as “retrospective” in nature. 702


42

The courts there addressed whether to grant relief from the 1994 Consent

Order incorporating the 1994 Agreements under Rule 60(b)(6), which provides for

such relief “[o]n motion and just terms” for any reason not specifically identified in

Rule 60(b)(1)-(5) “that justifies relief.” Under that standard, courts consider the

equities to all parties, and the Minnesota district court and Eighth Circuit plainly

did so. See, e.g., City of Duluth, 785 F.3d at 1210-12 (considering factors such as

the parties’ voluntary agreement to the 1994 Consent Order; the congressional

policy behind IGRA and the creation of the Gaming Commission, including

Congress’s express intent that tribes be the primary beneficiaries of Indian casinos;

and that the City was on notice in 2009 of relevant changes in the Gaming

Commission’s views as to IGRA’s sole-proprietary-interest requirement); see also

City of Duluth, 2015 WL 4545302, at *3-5. The City has offered no basis for this

Court to reach a different conclusion on the equities.

F.3d at 1154-55. The district court here appeared to accept that characterization (Dkt. 36 at 14), but at the time of the district court’s decision, the Minnesota district court had concluded that the Band had to pay the first-term rent. So the district court here concluded that there was no “retroactive effect” as to the first-term unpaid rent. Dkt. 36 at 14. As to the second-term rent obligation, the district court here agreed with the Eighth Circuit’s characterization of that relief as prospective in nature. Dkt. 36 at 14-15; 702 F.3d at 1152-53. But, despite the City’s urging (Br. 19-20), it is unnecessary to characterize these forms of relief because, even assuming they are “retroactive effects,” they are not impermissibly retroactive because the City has shown no detrimental reliance on the Commission’s 1994 decision.


43

The issue before this Court is whether to uphold the 2011 NOV. The

Commission’s NOV contains one directive:

The Band must cease performance under the 1994 Agreements of those provisions identified in this NOV as violating IGRA. This applies to the entire 42 year term of the 1994 Agreements.

AR50. This provision does not expressly require any action by the Band different

from what was determined in the Eighth Circuit litigation.

Just as the determination whether relief should be afforded from an order

under Rule 60(b)(6) turns on equity, the determination whether a rule of law

announced in an adjudication will be given retroactive effect turns on equity. See,

e.g., Br. 18 (“Retroactivity will be denied ‘when to apply the new rule to past

conduct or to prior events would work a manifest injustice.’”) (quoting Verizon

Tel. Cos. v. FCC, 269 F.3d 1098, 1109 (D.C. Cir. 2001)); see also Br. 19 (referring

to “notions of equity and fairness” in determining when to deny retroactive effect

to rules resulting from agency adjudication) (quoting Verizon Tel., 269 F.3d at

1109). The City has made no showing of manifest injustice.

Finally, the City relies (Br. 22-23) on SEC v. Chenery Corp., 332 U.S. 194,

203 (1947), to contend that the NOV’s alleged “retroactive invalidation” of the

Commission’s purported 1994 approval of the Agreements “was not necessary in

order to fulfill the public policy embodied by the IGRA.” But Chenery’s holdings

as to retroactivity and statutory design are limited to its admonition that the ill


44

effects of retroactivity “must be balanced against the mischief of producing a result

which is contrary to a statutory design or to legal and equitable principles.”

Chenery Corp., 332 U.S. at 203. The Court held that “[i]f that mischief is greater

than the ill effect of the retroactive application of a new standard, it is not the type

of retroactivity which is condemned by law.” Id. Here, the mischief of allowing

the 1994 Agreements to be enforced despite the violation of IGRA greatly exceeds

any alleged ill effect on the City. The Eighth Circuit undertook this balancing in a

related context and so concluded. City of Duluth, 785 F.3d at 1211.

III. THE GAMING COMMISSION’S CONCLUSION THAT THE 1994

AGREEMENTS VIOLATED IGRA WAS NOT ARBITRARY OR

CAPRICIOUS.

The City disputes certain aspects of the Gaming Commission’s findings in

the NOV. Br. 25-29. None of the City’s grievances establishes that the

Commission’s findings were either arbitrary or capricious.

A. THE COMMISSION’S INTERPRETATION OF IGRA IS ENTITLED TO

CHEVRON DEFERENCE.

As a threshold matter, the City asserts (Br. 24) that the Commission’s

interpretation of IGRA’s sole-proprietary-interest-and-responsibility requirement is

not entitled to Chevron deference. The City explains (Br. 24) that agency

interpretations of the statutes they administer contained in documents that “lack the

force of law,” such as opinion letters, policy statements, agency manuals, and

enforcement guidelines, are only “entitled to respect * * * to the extent that those


45

interpretations have the power to persuade.” Br. 24 (quoting Christensen v. Harris

County, 529 U.S. 576, 587 (2000) (quoting Skidmore v. Swift, 323 U.S. 134, 140

(1944))) (internal quotation marks omitted). The City argues (Br. 24) that here

only Skidmore deference is appropriate “to the extent [the Gaming Commission’s

interpretation] was based on opinion letters issued by the Office of General

Council [sic] analyzing various management agreements.”

But Christensen does not hold that Chevron deference is unavailable for

agency interpretations that simply rely on earlier documents without the force of

law. Christensen forecloses Chevron deference only for agency interpretations that

are announced in documents that lack the force of law. See, e.g., Citizens

Exposing Truth About Casinos v. Kempthorne, 492 F.3d 460, 466-67 (D.C. Cir.

2007) (when an agency determination is “intended to have the force of law,”

Christensen is not controlling). Here, in contrast, the NOV has the force of law

because the Gaming Commission issued it in exercising its enforcement authority

under Section 2713, and, upon that issuance, the Commission was authorized to

assess civil fines and issue the temporary closure of the Casino. See 25 U.S.C.

§ 2713(a); 25 C.F.R. § 575.5(a); AR 35; AR 51.

Chevron deference is appropriate because the Commission is the regulatory

agency charged with implementing IGRA’s enforcement provisions and, as such,

is tasked with giving meaning to the statute’s ambiguous terms, including “sole


46

proprietary interest and responsibility.” See, e.g., United States v. Mead Corp.,

533 U.S. 218, 226-27 (2001) (“[A]dministrative implementation of a particular

statutory provision qualifies for Chevron deference when it appears that Congress

delegated authority to the agency generally to make rules carrying the force of law,

and that the agency interpretation claiming deference was promulgated in the

exercise of that authority.”); INS v. Aguirre-Aguirre, 526 U.S. 415, 425 (1999) (an

agency should be accorded Chevron deference “as it gives ambiguous statutory

terms concrete meaning through a process of case-by-case adjudication” (internal

quotation marks omitted)); Coosemans Specialties, Inc. v. Dep’t of Agric., 482

F.3d 560, 565 (D.C. Cir. 2007) (same).

B. THE COMMISSION’S ISSUANCE OF THE 2011 NOV WAS PROPER

AND SHOULD BE UPHELD.

The City fails to show (Br. 25-25) that the Commission’s interpretation of

the sole-proprietary-interest-and-responsibility requirement was unreasonable or

that its application of that interpretation in the context of an agreement between a

tribe and a municipality was arbitrary or capricious. This Court should affirm.

From October 2010 to July 2011, the Commission conducted a thorough and

detailed analysis of the 1994 Agreements for the express purpose of determining

whether the Agreements violated IGRA’s sole-proprietary-interest-and-

responsibility mandate. AR 33-50. The Commission found that various provisions

of the Agreements, on their face and as implemented, demonstrated that the Band


47

did not have the statutorily required sole proprietary interest in and responsibility

for the gaming activity at the Fond du Luth Casino. AR 34; AR 39-40; AR 47-50.

Based on its findings, the Commission concluded that “the 1994 Agreements, as

written and implemented, violate IGRA’s mandate that the Band retain the sole

proprietary interest in and responsibility for its gaming activity.” AR 39; see also

AR 33-34; AR 39-40; AR 43-50.

That conclusion triggered the Commission’s authority to take enforcement

action and issue the 2011 NOV. 25 U.S.C. § 2713(a)(1); 25 C.F.R. § 573.3. The

NOV identifies various reasons for finding that the Agreements did not comport

with IGRA. The City takes issue (Br. 25-29) with five of those reasons, which

address the following:

the rent structure of the Agreements (Br. 25-26),

the lack of correlation between the amount of rent the Band had to pay and the City’s services to the Band (Br. 26-27),

the term of the Agreements (Br. 27-28),

the City’s right to access all of the Band’s gaming-operation records (Br. 27), and

the City’s control over the Band’s changes to its gaming ordinance and regulations (Br. 28).

As to the rent structure, the Commission found that the Agreements required

the Band to lease its own trust land (on which the Casino was built) from the


48

Development Commission in exchange for paying a rent of 19% of the gross

revenue from games of chance, and the rent structure “appears deliberately

designed to disguise payments of revenue of the casino to the City as rent

payments,” AR 39. With regard to the lack of correlation, the Commission found

that the rent payments “are placed in an account that can be spent on the general

operations for the City without regard to any provision of services from the City to

the Tribe.” AR 48, ¶ 18. The Commission found that the term of the Agreements

was “extremely long.” AR 39.

With respect to these three issues, the City complains (Br. 25-27) that the

Commission failed to give effect to 25 U.S.C. § 2710(b)(2)(B)(v), which provides

that net gaming revenues may be used to “help fund operations of local

government agencies,” and instead applied the standards applicable to management

contracts. Congress did not define the factors that are relevant to, or required for,

an analysis of Section 2710(b)(2)(B)(v). Nor did Congress provide any standards

for applying the sole-proprietary-interest-and-responsibility requirement to

arrangements like the 1994 Agreements. Instead, the Commission is charged with

filling such gaps. See, e.g., EPA v. EME Homer City Generation, L.P., 134 S. Ct.

1584, 1603 (2014) (“When Congress has not directly addressed the precise

interpretative question at issue, * * * a reviewing court cannot simply impose its

own construction of the statute. * * * Rather, the agency [that administers the


49

statute] “is charged with filling the gap left open by the ambiguity.”) (quoting

Chevron, 467 U.S. at 843, 866 (internal brackets and quotation marks omitted).

Here, the Commission’s interpretation was reasonable.

Section 2710(b)(2)(B)(v) typically applies to municipal service agreements,

which delineate a fee for specific municipal services, such as police or fire

protection. But the 1994 Agreements are not municipal service agreements, and

the City does not argue that they are. Moreover, the 1994 Agreements run far

afield of such service agreements because they provide the City a percentage of net

gaming revenues without any regard to whether that percentage is reasonable

compensation for the services the City provides to the Band. For instance, under

the 1994 Agreements, the Band paid the City a percentage of the Casino’s net

gaming revenues that resulted in an average payment of more than $5 million per

year. The City has never shown, or argued, that those payments were in any way

commensurate with the services the City provided to the Band. See AR 42; AR

48-49. Moreover, those payments were directed to the City’s general fund, not to

the provision of municipal services. See AR 48, ¶ 18.

The City fares no better (Br. 25-27) taking issue with the Commission’s

reliance on agency precedents and IGRA criteria involving management contracts.

IGRA does not contemplate a profit-sharing joint venture between a tribe and a

municipality such as the one that the Commission found existed in the 1994


50

Agreements. And absent any statutory or regulatory definition of the sole-

proprietary-interest-and-responsibility mandate, it was neither arbitrary nor

capricious for the Commission to draw on relevant agency precedents and statutory

requirements that apply to management contracts, see AR 45-47; 25 U.S.C. §

2711(b), for guidance in interpreting the IGRA mandate in the context of the

Agreements here.

The City next complains about the Commission’s finding that the share of

the Casino profits that the Band was to pay to the City was excessive. The City

contends that the Commission’s conclusion “was not supported by the evidence”

(Br. 26-27) because the City presented evidence that the payment amounts fell

within the range of other gaming-related agreements with government entities. But

the City’s evidence was based on agreements involving tribes and states, as

opposed to tribes and local governments, which is the case here. See AR 1447-50.

And, as explained in detail infra at 52, a distinct set of statutory provisions govern

tribal-state agreements, and they do not apply here.

Moreover, the Commission’s concerns about the City’s excessive share of

the Casino profits were not limited to the mere amounts. The Commission was

also concerned about other aspects of the Band’s payments, including that: (1) the

Band was paying rent on property it already owned, (2) based on the evidence, the

Band was paying “at a far higher rental rate than the market rates,” (3) revenue to


51

the City appeared to be disguised as rent payments, (4) the high level of

compensation paid by the Band was not in exchange for its receipt of any

substantial benefits or services from the City; and (5) the high level of

compensation was not in exchange for the City’s assumption of any financial or

other risk. AR 39-40; AR 46; AR 49, ¶ 21. Additionally, the question before the

Commission was not whether other arrangements, such as those on which the City

relied, yielded amounts similar to those in the Agreements. Rather, the

Commission sought to determine whether the provisions and conditions under

which the Band was to pay those amounts deprived the Band of the statutorily

required sole proprietary interest in and responsibility for its gaming activity. The

City does not argue that the Commission’s findings – as to that determination –

were arbitrary or capricious.

The City also complains (Br. 28-29) about the Commission’s criticisms

concerning: (1) the City’s access to the Band’s gaming operation records, and (2)

the City’s role involving the Band’s gaming ordinance and regulations. The

Commission found that the Band is required to provide the City access to “any and

all records of the gaming operation,” which, the Commission explained, was an

“unfettered” level of access “usually afforded to a business partner.” AR 40; AR

50. The Commission also found that the Band may not modify its gaming

ordinance or regulations for the Casino “unless the City of Duluth consents to the


52

modification,” and the City has the right to “review and object to the Band’s

licensing decisions” for Casino employees and management officials. AR 40.

The City contends that it offered the opinion of its expert (Alan Meister) that

“access to records” is not uncommon (Br. 28) and that arrangements providing an

“ability to comment on proposed changes” to gaming regulations were “not

uncommon” (Br. 29). As to the matter of record access, mere “access to records”

(Br. 28), which the City’s expert speaks to, is significantly different from the

extreme degree of access that the Commission found the 1994 Agreements gave to

the City. See AR 40, AR 50. Moreover, the City ignores that its expert

commented on access in the context of Class III tribal-state gaming compacts. See

AR 1447-50. But those compacts are governed by specific statutory and regulatory

requirements; and, as the Commission explained, “[u]nder IGRA, tribal-state

compacts are fundamentally different than the agreements at issue here.” AR 42

(citing 25 U.S.C. § 2710(d)(3)); see also 25 U.S.C. §§ 2710(d)(3)-(8); 25 C.F.R. §

502.21. For example, tribal-state gaming compacts, unlike the 1994 Agreements

or other agreements between tribes and local governments, are mandatory for any

Class III tribal gaming activity conducted under IGRA; are subject to review and

approval by the Secretary of the Interior; and must adhere to distinct statutory and

regulatory requirements. See 25 U.S.C. § 2710; 25 C.F.R. Part 293. Indeed, the


53

City itself acknowledged in its written submission to the Commission that

“municipalities are, under IGRA, statutorily different than states.” AR 42.

The City’s expert also found that arrangements giving government entities

the “ability to comment on proposed changes” to gaming regulations are “not

uncommon.” Br. 29. But those findings also speak to tribal-state compacts. See

AR 1447-48; AR 1450. And, as the Commission concluded, the City’s comparison

of the Agreements with tribal-state compacts is “misplaced and unpersuasive.” AR

42. Additionally, the Agreements give the City more than “the ability to comment

on proposed changes” to gaming regulations. Br. 29. They provide that the Band

may not modify its gaming ordinance or regulations unless the City consents to the

modification. See AR 40; AR 41; AR 49, ¶ 27.

Next, the City contends (Br. 28-29) that the NOV does not explain “why [the

Commission] failed to provide the parties with ‘[a] reasonable time for correction’

as required by 25 C.F.R. § 573.3(b)(3) [sic]” for the Agreements’ provisions

concerning the City’s access to records and its control over changes to the Band’s

gaming ordinance and regulations. Section 573.3(b)(4) provides that a notice of

violation shall contain “[a] reasonable time for correction, if the respondent cannot

take measures to correct the violation immediately.” The NOV states that the

“[m]easures required to correct the violation” are that “[t]he Band must cease

performance under the 1994 Agreements of those provisions identified in this


54

NOV as violating IGRA.” AR 50. The Band, as the sole “respondent” before the

NOV, took measures to correct the violations.

The City offers no authority for the notion that the City either was entitled to

any time to correct the violations addressed in the NOV, or that it had any

statutorily granted role in correcting those violations. Moreover, after the NOV

issued, the Band and the City were free to negotiate a new agreement that did not

violate IGRA’s sole-proprietary-interest-and-responsibility requirement. The

government stated as much in its Motion to Dismiss and its Motion for Summary

Judgment. Dkt. 8 at 11; Dkt. 26 at 27.

Finally, it is important that the Court consider the challenged findings not in

isolation, but rather collectively, with the other findings that comprise the 2011

NOV. The Commission determined that all the factors, carefully and thoroughly

set out in the 2011 NOV, and considered together, establish that the City had an

unlawful proprietary interest in and shared responsibility for the Band’s gaming

operation.


55

CONCLUSION

For the foregoing reasons, the district court’s judgment should be affirmed.

Respectfully submitted, JOHN C. CRUDEN Assistant Attorney General

U.S. Department of Justice Environment & Natural

Resources Division Of Counsel: /s/ Tamara N. Rountree

KATHERINE ZEBELL JOHN HAY

LAURA L. MAULMARY GABRIELLE SPRAGUE

National Indian Gaming TAMARA N. ROUNTREE Commission Office of the Solicitor

AttorneysU.S. Department of Justice

Environment & Natural Res. Div. P.O. Box 7415 Washington, D.C. 20044 (202) 514-1174 November 2015 Attorneys for Defendants-Appellees 90-6-16-01064


CERTIFICATE OF COMPLIANCE

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/s/ Tamara N. Rountree TAMARA N. ROUNTREE U.S. Department of Justice Environment & Natural Res. Div. Appellate Section P.O. Box 7415 Washington, D.C. 20044 (202) 514-1174 Attorney for Defendants-Appellees


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serve notice of the filing on registered users of that system.

/s/ Tamara N. Rountree TAMARA N. ROUNTREE U.S. Department of Justice Environment & Natural Res. Div. Appellate Section P.O. Box 7415 Washington, D.C. 20044 (202) 514-1174 Attorney for Defendants-Appellees


STATUTORY ADDENDUM

Administrative Procedure Act

5 U.S.C. § 704 ............................................................................................. A-1

Indian Gaming Regulatory Act

25 U.S.C. § 2710 ......................................................................................... A-2 25 U.S.C. § 2712 ......................................................................................... A-8 25 U.S.C. § 2713 ......................................................................................... A-9 25 U.S.C. § 2714 ....................................................................................... A-10


A-1

5 U.S.C.A. § 704

§ 704. Actions reviewable

Agency action made reviewable by statute and final agency action for which

there is no other adequate remedy in a court are subject to judicial review. A

preliminary, procedural, or intermediate agency action or ruling not directly

reviewable is subject to review on the review of the final agency action. Except as

otherwise expressly required by statute, agency action otherwise final is final for

the purposes of this section whether or not there has been presented or determined

an application for a declaratory order, for any form of reconsideration, or, unless

the agency otherwise requires by rule and provides that the action meanwhile is

inoperative, for an appeal to superior agency authority.


A-2

25 U.S.C.A. § 2710

§ 2710. Tribal gaming ordinances

(a) Jurisdiction over class I and class II gaming activity

(1) Class I gaming on Indian lands is within the exclusive jurisdiction of the Indian tribes and shall not be subject to the provisions of this chapter.

(2) Any class II gaming on Indian lands shall continue to be within the jurisdiction of the Indian tribes, but shall be subject to the provisions of this chapter.

(b) Regulation of class II gaming activity; net revenue allocation; audits; contracts

(1) An Indian tribe may engage in, or license and regulate, class II gaming on Indian lands within such tribe's jurisdiction, if--

(A) such Indian gaming is located within a State that permits such gaming for any purpose by any person, organization or entity (and such gaming is not otherwise specifically prohibited on Indian lands by Federal law), and

(B) the governing body of the Indian tribe adopts an ordinance or resolution which is approved by the Chairman.

A separate license issued by the Indian tribe shall be required for each place, facility, or location on Indian lands at which class II gaming is conducted.

(2) The Chairman shall approve any tribal ordinance or resolution concerning the conduct, or regulation of class II gaming on the Indian lands within the tribe's jurisdiction if such ordinance or resolution provides that--

(A) except as provided in paragraph (4), the Indian tribe will have the sole proprietary interest and responsibility for the conduct of any gaming activity;

(B) net revenues from any tribal gaming are not to be used for purposes other than-

(i) to fund tribal government operations or programs;

(ii) to provide for the general welfare of the Indian tribe and its members;


A-3

(iii) to promote tribal economic development;

(iv) to donate to charitable organizations; or

(v) to help fund operations of local government agencies;

* * *

(d) Class III gaming activities; authorization; revocation; Tribal-State compact

(1) Class III gaming activities shall be lawful on Indian lands only if such activities are--

(A) authorized by an ordinance or resolution that--

(i) is adopted by the governing body of the Indian tribe having jurisdiction over such lands,

(ii) meets the requirements of subsection (b) of this section, and

(iii) is approved by the Chairman,

(B) located in a State that permits such gaming for any purpose by any person, organization, or entity, and

(C) conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State under paragraph (3) that is in effect.

* * *

(3)(A) Any Indian tribe having jurisdiction over the Indian lands upon which a class III gaming activity is being conducted, or is to be conducted, shall request the State in which such lands are located to enter into negotiations for the purpose of entering into a Tribal-State compact governing the conduct of gaming activities. Upon receiving such a request, the State shall negotiate with the Indian tribe in good faith to enter into such a compact.

(B) Any State and any Indian tribe may enter into a Tribal-State compact governing gaming activities on the Indian lands of the Indian tribe, but such compact shall take effect only when notice of approval by the Secretary of such compact has been published by the Secretary in the Federal Register.


A-4

(C) Any Tribal-State compact negotiated under subparagraph (A) may include provisions relating to--

(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.

(4) Except for any assessments that may be agreed to under paragraph (3)(C)(iii) of this subsection, 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. No State may refuse to enter into the negotiations described in paragraph (3)(A) based upon the lack of authority in such State, or its political subdivisions, to impose such a tax, fee, charge, or other assessment.

(5) Nothing in this subsection shall impair the right of an Indian tribe to regulate class III gaming on its Indian lands concurrently with the State, except to the extent that such regulation is inconsistent with, or less stringent than, the State laws and regulations made applicable by any Tribal-State compact entered into by the Indian tribe under paragraph (3) that is in effect.

(6) The provisions of section 1175 of Title 15 shall not apply to any gaming conducted under a Tribal-State compact that--


A-5

(A) is entered into under paragraph (3) by a State in which gambling devices are legal, and

(B) is in effect.

(7)(A) The United States district courts shall have jurisdiction over--

(i) any cause of action initiated by an Indian tribe arising from the failure of a State to enter into negotiations with the Indian tribe for the purpose of entering into a Tribal-State compact under paragraph (3) or to conduct such negotiations in good faith,

(ii) any cause of action initiated by a State or Indian tribe to enjoin a class III gaming activity located on Indian lands and conducted in violation of any Tribal-State compact entered into under paragraph (3) that is in effect, and

(iii) any cause of action initiated by the Secretary to enforce the procedures prescribed under subparagraph (B)(vii).

(B)(i) An Indian tribe may initiate a cause of action described in subparagraph (A)(i) only after the close of the 180-day period beginning on the date on which the Indian tribe requested the State to enter into negotiations under paragraph (3)(A).

(ii) In any action described in subparagraph (A)(i), upon the introduction of evidence by an Indian tribe that--

(I) a Tribal-State compact has not been entered into under paragraph (3), and

(II) the State did not respond to the request of the Indian tribe to negotiate such a compact or did not respond to such request in good faith,

the burden of proof shall be upon the State to prove that the State has negotiated with the Indian tribe in good faith to conclude a Tribal-State compact governing the conduct of gaming activities.

(iii) If, in any action described in subparagraph (A)(i), the court finds that the State has failed to negotiate in good faith with the Indian tribe to conclude a Tribal-State compact governing the conduct of gaming activities, the court shall order the State and the Indian Tribe2 to conclude such a compact within a 60-day period. In determining in such an action whether a State has negotiated in good faith, the court--


A-6

(I) may take into account the public interest, public safety, criminality, financial integrity, and adverse economic impacts on existing gaming activities, and

(II) 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 faith.

(iv) If a State and an Indian tribe fail to conclude a Tribal-State compact governing the conduct of gaming activities on the Indian lands subject to the jurisdiction of such Indian tribe within the 60-day period provided in the order of a court issued under clause (iii), the Indian tribe and the State shall each submit to a mediator appointed by the court a proposed compact that represents their last best offer for a compact. The mediator shall select from the two proposed compacts the one which best comports with the terms of this chapter and any other applicable Federal law and with the findings and order of the court.

(v) The mediator appointed by the court under clause (iv) shall submit to the State and the Indian tribe the compact selected by the mediator under clause (iv).

(vi) If a State consents to a proposed compact during the 60-day period beginning on the date on which the proposed compact is submitted by the mediator to the State under clause (v), the proposed compact shall be treated as a Tribal-State compact entered into under paragraph (3).

(vii) If the State does not consent during the 60-day period described in clause (vi) to a proposed compact submitted by a mediator under clause (v), the mediator shall notify the Secretary and the Secretary shall prescribe, in consultation with the Indian tribe, procedures--

(I) which are consistent with the proposed compact selected by the mediator under clause (iv), the provisions of this chapter, and the relevant provisions of the laws of the State, and

(II) under which class III gaming may be conducted on the Indian lands over which the Indian tribe has jurisdiction.

(8)(A) The Secretary is authorized to approve any Tribal-State compact entered into between an Indian tribe and a State governing gaming on Indian lands of such Indian tribe.


A-7

(B) The Secretary may disapprove a compact described in subparagraph (A) only if such compact violates--

(i) any provision of this chapter,

(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.

(C) If the Secretary does not approve or disapprove a compact described in subparagraph (A) 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.

(D) The Secretary shall publish in the Federal Register notice of any Tribal-State compact that is approved, or considered to have been approved, under this paragraph.


A-8

25 U.S.C.A. § 2712

§ 2712. Review of existing ordinances and contracts

(a) Notification to submit

As soon as practicable after the organization of the Commission, the Chairman

shall notify each Indian tribe or management contractor who, prior to October 17,

1988, adopted an ordinance or resolution authorizing class II gaming or class III

gaming or entered into a management contract, that such ordinance, resolution, or

contract, including all collateral agreements relating to the gaming activity, must

be submitted for his review within 60 days of such notification. Any activity

conducted under such ordinance, resolution, contract, or agreement shall be valid

under this chapter, or any amendment made by this chapter, unless disapproved

under this section.


A-9

25 U.S.C.A. § 2713

§ 2713. Civil penalties

(a) Authority; amount; appeal; written complaint

(1) Subject to such regulations as may be prescribed by the Commission, the

Chairman shall have authority to levy and collect appropriate civil fines, not to

exceed $25,000 per violation, against the tribal operator of an Indian game or a

management contractor engaged in gaming for any violation of any provision of

this chapter, any regulation prescribed by the Commission pursuant to this chapter,

or tribal regulations, ordinances, or resolutions approved under section 2710 or

2712 of this title.

(2) The Commission shall, by regulation, provide an opportunity for an appeal and

hearing before the Commission on fines levied and collected by the Chairman.

(3) Whenever the Commission has reason to believe that the tribal operator of an

Indian game or a management contractor is engaged in activities regulated by this

chapter, by regulations prescribed under this chapter, or by tribal regulations,

ordinances, or resolutions, approved under section 2710 or 2712 of this title, that

may result in the imposition of a fine under subsection (a)(1) of this section, the

permanent closure of such game, or the modification or termination of any

management contract, the Commission shall provide such tribal operator or

management contractor with a written complaint stating the acts or omissions

which form the basis for such belief and the action or choice of action being

considered by the Commission. The allegation shall be set forth in common and

concise language and must specify the statutory or regulatory provisions alleged to

have been violated, but may not consist merely of allegations stated in statutory or

regulatory language.


A-10

25 U.S.C.A. § 2714

§ 2714. Judicial review

Decisions made by the Commission pursuant to sections 2710, 2711, 2712, and

2713 of this title shall be final agency decisions for purposes of appeal to the

appropriate Federal district court pursuant to chapter 7 of Title 5.


case number 15-5162 in the united states court of appeals city of duluth, v… · 2015-11-18 ·...

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