in the united states district court for the western ... · consistent with the evidentiary...

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

THE CHEROKEE NATION, et al., ) )

Plaintiffs, ) ) and )

) THE CITIZEN POTAWATOMI NATION, ) et al., ) )

Plaintiffs/Intervenors, ) ) vs. )

) J. KEVIN STITT, et al., ) )

Defendants. )

Case No. CIV-19-1198-D

OKLAHOMA’S RESPONSE TO PLAINTIFFS’ AND PLAINTIFFS-IN-INTERVENTION’S CHEROKEE NATION, CHICKASAW NATION,

CHOCTAW NATION, CITIZEN POTAWATOMI NATION, DELAWARE NATION, MUSCOGEE (CREEK) NATION, QUAPAW NATION, AND

SEMINOLE NATION OPENING BRIEF IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT

Case 5:19-cv-01198-D Document 141 Filed 06/12/20 of 37

2

PHILLIP G. WHALEY, OBA NO. 13371 DANIEL G. WEBBER, JR., OBA NO. 16332 PATRICK R. PEARCE, JR., OBA NO. 18802

MATTHEW C. KANE, OBA NO. 19502 RYAN WHALEY

400 North Walnut Avenue Oklahoma City, OK 73104 Telephone: (405) 239-6040 Facsimile: (405) 239-6766 [email protected] [email protected] [email protected] [email protected]

-and-

STEVEN K. MULLINS, OBA NO. 6504 MATTHEW K. FELTY, OBA NO. 31057

LYTLE, SOULÉ & FELTY, P.C. 1200 Robinson Renaissance

119 N. Robinson Ave. Oklahoma City, OK 73102 Telephone: (405) 235-7471 Facsimile: (405) 232-3852

[email protected] [email protected]

-and-

MARK E. BURGET, OBA NO. 1326

JEFFREY C. CARTMELL, OBA NO. 31012 STATE OF OKLAHOMA, OFFICE OF THE GOVERNOR

2300 N. Lincoln Boulevard, Suite 212 Oklahoma City, OK 73105 Telephone: (405) 521-2342 [email protected]

[email protected]

ATTORNEYS FOR J. KEVIN STITT, AS GOVERNOR OF THE STATE OF OKLAHOMA, AND EX REL. THE STATE OF

OKLAHOMA


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TABLE OF CONTENTS

RESPONSE TO PLAINTIFFS’ STATEMENT OF UNDISPUTED MATERIAL FACTS .................................................................. 3

ARGUMENT AND AUTHORITIES ................................................................................. 7

I. The Language of the Compact is Unambiguous, Meaning Parol Evidence is Inadmissible and Summary Judgment is Appropriate. .................................................... 9

II. The Plain and Unambiguous Language of the Compact Shows that It Has Expired and Not Renewed. .......................................................................................................... 11

A. Governmental Action that Precedes the Effective Date of the Compact Cannot Trigger Renewal. ........................................................................................................ 16

B. Acts in Furtherance of the STGA Following the Effective Date of the Compact Do Not Trigger Renewal. ........................................................................................... 20

C. No Additional “Action” Identified by Plaintiffs Meets the Requirements for Renewal of Part 15(B). ............................................................................................... 24

III. A Request to Renegotiate – The Final Precondition ............................................ 28

IV. The Court Must Construe the Compact in Its Entirety. ....................................... 29

V. The Governor’s Authority ....................................................................................... 30

CONCLUSION ................................................................................................................. 30


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TABLE OF AUTHORITIES

Page(s)

Cases

Arizona v. Tohono O'odhom Nation, No. CV11-0296-PHX-DGC, 2011 WL 2357833 (D. Ariz. June 15, 2011) .................. 29

Barnhart v. Thomas, 540 U.S. 20 (2003) ......................................................................................................... 21

Bowen v. Pub. Agencies Opposed To Soc. Sec. Entrapment, 477 U.S. 41 (1986) ......................................................................................................... 18

Cady v. Sheahan, 467 F.3d 1057 (7th Cir. 2006) .......................................................................................... 3

Cinocca v. Baxter Labs., Inc., 400 F. Supp. 527 (E.D. Okla. 1975)............................................................................... 11

Citizen Potawatomi Nation v. Oklahoma, 881 F.3d 1226 (10th Cir.) ............................................................................................... 10

Doe I v. Evanchick, 355 F. Supp. 3d 197 (E.D. Pa. 2019) ............................................................................... 6

Fed. Land Bank of Wichita v. Story, 1988 OK 52, 756 P.2d 588 ............................................................................................. 18

Finisar Corp. v. DirecTV Grp., Inc., 523 F.3d 1323 (Fed. Cir. 2008) ................................................................................ 21, 26

Grand Acadian, Inc. v. United States, 97 Fed. Cl. 483 (2011) ................................................................................................... 21

Hailey v. City of Camden, No. CV 14-1018 (JBS/KMW), 2017 WL 2656011 (D.N.J. June 20, 2017) .................... 6

In re Initiative Petition No. 315, 1982 OK 15, 649 P.2d 545 ............................................................................................. 18

Lawlis v. Moore Iron & Steel Corp., No. CIV-13-823-D, 2015 WL 9474291 (W.D. Okla. Dec. 28, 2015) ........................... 11

Merrion v. Jicarilla Apache Tribe, 455 U.S. 130 (1982) ....................................................................................................... 18

United States Trust Co. of New York v. New Jersey, 431 U.S. 1 (1977) ........................................................................................................... 18

Utex Expl. Co. v. Garwood, 246 F.2d 547 (10th Cir. 1957) .......................................................................................... 7

Statutes

3A O.S. § 200.1(9).............................................................................................................12 3A O.S. § 205.1(A)............................................................................................................12


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3A O.S. § 262................................................................................................4, 5, 13, 22, 26 3A O.S. § 264(E)...............................................................................................................26 3A O.S. § 269....................................................................................................1, 13, 26, 27 3A O.S. § 280.1...................................................................................................................6 3A O.S. § 281................................................................................................1, 5, 13, 22, 25 3A O.S. § 703(9)................................................................................................................28

Rules

Fed. R. Civ. P. 56(c)(1-4) .................................................................................................... 6

Other Authorities

House Bill 1836 ....................................................................................................... 5, 16, 27 House Bill 3538 ....................................................................................................... 6, 16, 28


1

As discussed in Oklahoma’s1 MSJ, the STGA and the Compacts were the product

of a Grand Bargain, designed to benefit racetracks, Indian tribes and the State. The Bargain

thus had to address the unique needs of each stakeholder. The statutory provisions of the

STGA (with the exception of sections 280-281) provided the framework for gaming that

would be conducted at Oklahoma’s racetracks, known as “organization licensees.”

Meanwhile, the Model Compact structured the contractual relationship between the State

and compacting tribes according to the framework for tribal gaming pursuant to IGRA.

The Compact was drafted to implement, and protect from competition, class III

tribal gaming in Oklahoma and to allow the industry to develop and mature, giving the

Tribes a competitive head-start over other potential gaming interests (with only very

limited electronic gaming at racetracks). The State was required to protect this competitive

advantage during the term of the Compact. Its express term was fifteen (15) years. If the

State failed to hold up its end of the Bargain during the term, the Tribes had at least three

remedies, dependent on the nature of the violation, including voidance of the exclusivity

fees, liquidated damages and renewal of the Compacts.

Parts 11(A) and 11(E) of the Compact provided two important safeguards to

disincentivize the State from altering the Tribes’ near-monopoly during the fifteen-year

term: (1) the Tribes’ obligation to pay Exclusivity Fees to the State was conditioned on the

State not changing its laws during the term to permit any new form of gaming at the

racetracks or authorizing others to conduct any electronic gaming (Part 11(A)); and (2) if

1 Oklahoma will use defined terms herein as they are defined in Oklahoma’s Motion for Partial Summary Judgment (Dkt. No. 126) (“MSJ”).


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the State permitted nontribal operation of electronic gaming or covered games beyond

those contemplated in the STGA, liquidated damages could be awarded (Part 11(E)).

That was the “status quo” for the fifteen-year term, an integral part of the Grand

Bargain. If, and only if, the State acted in a manner to trigger renewal following the

effective date of the Compact, and all preconditions were satisfied, the Compact would

automatically renew for successive terms (Part 15(B)). Assuming, however, the State did

not act to cause renewal, the parties could determine how they would like to proceed after

the fifteen-year period. Absent legislative action repealing all state laws authorizing any

form of class III gaming by anyone in the State, including the STGA, the State must (and

is willing to) negotiate in good faith as required by IGRA to enter into new class III gaming

compacts with the Tribes following the expiration of the Compacts. The obligations

imposed on the State by IGRA ensure for the Tribes an opportunity to protect their

substantial investment and effort required to create and develop this industry during the

fifteen-year term (now exceeding $4.5 billion annually) upon expiration of the Compacts.

On the other hand, Part 15(B) ensured that, if the State protected the status quo and

did not act post-Compact to authorize electronic gaming at racetracks other than the STGA-

authorized machines as of January 1, 2020, the Tribes would likewise be required to

negotiate new gaming compacts upon expiration of the original Compact to make

continued class III gaming lawful under IGRA. Indeed, so long as class III electronic

gaming is authorized for anyone at that time, Tribes will also have the right to conduct

gaming pursuant to a compact under IGRA – it simply will not be pursuant to the current

Compacts. As drafted, these provisions protect the State’s interest by providing the


3

opportunity to reassess the financial and policy implications of continued exclusivity and

the fee structure with the hindsight of fifteen years of tribal gaming in Oklahoma. For

example, although tribes in the State generate more gross gaming revenue than any state

but California, Oklahoma ranks significantly lower for gross state and local revenue

sharing from tribal gaming compared to other major tribal gaming states. See Presentation

(Dkt. No. 131-4), at 9-10.

The State fully honored the status quo and the Compact has expired. But, the State

had in 2004 (and has today) every intention to allow class III tribal gaming to continue in

Oklahoma; as a result, the Governor sought to enter into negotiations with the Tribes to

address various issues that had emerged over Oklahoma’s first fifteen years of class III

gaming. The Tribes declined negotiations and filed the instant lawsuit against the State.

The movants here (“Plaintiffs”), and the Wichita Tribe in its separate MSJ, seek to bind

the State forever to a Compact contrary to its express terms, while ignoring the State’s

legitimate requests to renegotiate. Conversely, Oklahoma seeks the benefits of the bargain

to which the Tribes agreed: expiration of the Compact at the end of its fifteen-year term

and negotiation of new compacts to govern the next generation of class III gaming in

Oklahoma.

RESPONSE TO PLAINTIFFS’ STATEMENT OF UNDISPUTED MATERIAL FACTS

Oklahoma generally objects to Plaintiffs’ Statement of Undisputed Material Facts

(“Facts”) because it is improperly “filled with irrelevant information, legal arguments, and

conjecture.” See Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 2006). For the purposes


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of the instant motion, Oklahoma does not dispute the factual statements contained in

Plaintiffs’ Fact Nos. 1, 3-8, 10-11, 13-14, 16, 18-21, 23, 25, 28, and 30 to the extent

consistent with the evidentiary materials and sources cited therein, all of which speak for

themselves. Oklahoma disputes, however, that each of these facts necessarily supports

Plaintiffs’ summary judgment arguments or is material to the issues presently before the

Court. Specifically, facts related to OHRC rulemaking (No. 16), oversight assessments

(Nos. 18 and 19), and the Governor’s position on contract renewal (Nos. 28 and 30) are

clearly immaterial to the issue of whether the Compacts expired or renewed.

2. Fact No. 2 is undisputed in part and disputed in part. Although Plaintiffs

named J. Kevin Stitt in his official capacity as Governor of the State of Oklahoma as

Defendant, the State is the real party in interest and has joined in the responses and

counterclaims here. Oklahoma’s Answer and Counterclaims (Dkt. No. 15) at 1, 22-23.

9. Fact No. 9 is disputed to the extent it misstates or mischaracterizes the cited

statute. In particular, Plaintiffs predicate the entire fact on a suggestion that the OHRC has

discretionary authority (“may”) regarding the issuance of licenses, when, in fact, the OHRC

has no such discretion under the cited provision of the STGA, which states that the OHRC

“shall license organization licensees…” to conduct “authorized gaming as that term is

defined by this act pursuant to this act utilizing gaming machines or devices authorized

by this act.” See 3A O.S. § 262(A) (emphasis added). The use of the imperative “shall” is

discussed at length in Plaintiffs’ MSJ at 29-30 (and infra).

12. Fact No. 12 is disputed to the extent it misstates or mischaracterizes IGRA.

“Entered” is not a defined term under the Compact. Rather, the Compact provides that it


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“is deemed approved by the State of Oklahoma. No further action by the state or any state

official is necessary for this Compact to take effect upon approval by the Secretary of the

Interior and publication in the Federal Register.” 3A O.S. § 281, Part 16. In other words,

mere acceptance of the Model Compact does not cause it to be “in effect” under IGRA.2


statute. In particular, Plaintiffs predicate the entire fact on a suggestion that the OHRC has

discretionary authority (“permitted”) regarding the issuance of licenses contrary to the cited

provision of the STGA, which states that the OHRC “shall license organization licensees”

to conduct authorized gaming after notice of approval of at least four compacts is published

in the Federal Register. See 3A O.S. § 262(A); see also Response to Fact No. 9.

17. Fact No. 17 is disputed to the extent it misstates or mischaracterizes

Oklahoma law. In particular, the OHRC did not “authorize” horse racetracks to conduct

electronic gaming in August 2005 or October 2019, although it did issue licenses to them.

The STGA authorized electronic gaming and directed the OHRC to perform mandatory

administrative requirements, including the issuance of licenses to organization licensees

(i.e., racetracks). See 3A O.S. § 262(A); see also Response to Fact Nos. 9 and 15.


amendment. The actual text of H.B. 1836 is provided below. See Proposition II.

2 A Compact takes effect under IGRA only after (1) the Tribe issues gaming ordinances, (2) the ordinances are approved by DOI, (3) the Tribe adopts the Compact, (4) the Compact is approved or deemed approved by DOI, (5) such approval is published in the Federal Register and (6) the Tribe pays its startup fee. Allegations suggesting otherwise are inconsistent with the statutory text. See, e.g., Fact No. 21.


6

23. Fact No. 23 is disputed to the extent it is incomplete or misleading in its

reference to “covered games.” 3A O.S. § 280.1. It is also immaterial, as it relates to table

games operated by Indian tribes, not “electronic gaming” by “organization licensees or

others,” who were explicitly excluded from conducting such gaming, and no additional

electronic gaming was allowed. 3A O.S. § 280.1(B), Part 3(F).


amendment or suggests the statute authorizes “internet gambling.” The actual text of H.B.

3538 provides in pertinent part:

The process to submit entries to lottery-sponsored promotions and second-chance drawing promotions provided by subsection A of this section shall not be construed as illegal Internet gambling activities. (Emphasis added).

Moreover, Fact No. 24 is immaterial, as it relates to the State Lottery, not “electronic

gaming” by “organization licensees or others.”

26. Fact No. 26 is disputed (for the reasons set forth, infra) and procedurally

improper because it contains a legal conclusion and no admissible evidence is cited to

support the allegation. See Fed. R. Civ. P. 56(c)(1-4) (outlining procedural requirements

for supporting assertion that fact cannot be genuinely disputed). “[T]he Court is not

required to admit legal conclusions embedded in a party’s statement of facts.” Doe I v.

Evanchick, 355 F. Supp. 3d 197, 214 (E.D. Pa. 2019); see also Hailey v. City of Camden,

No. CV 14-1018 (JBS/KMW), 2017 WL 2656011, at *7 (D.N.J. June 20, 2017) (“[I]t it is

not appropriate to insert legal conclusions in the statement of undisputed material facts;

instead, it should leave the argument for its briefing.”).


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27. Fact No. 27 is disputed (for the reasons set forth, infra) and procedurally

improper because it contains a legal conclusion and no admissible evidence is cited to

support the allegation. See also Response to Fact No. 26.

29. Fact No. 29 is disputed to the extent it misstates or misquotes the contents of

the July 5, 2019 letter. It is undisputed that the Governor requested renegotiation under

Part 15(B) of the Compacts with each of the Tribes on July 5, 2019, within 180 days of

January 1, 2020. See Oklahoma MSJ, UMF 13.

ARGUMENT AND AUTHORITIES

It is of course axiomatic that a contract shall be interpreted as a harmonious whole to effectuate the intention of the parties. Every word, phrase or part of a contract should be given a meaning and significance according to its importance in the context of the contract.

Utex Expl. Co. v. Garwood, 246 F.2d 547, 550–51 (10th Cir. 1957). Plaintiffs’ renewal

argument is premised entirely upon a misreading of Part 15(B) of the Compact that violates

these fundamental principles. As the parties’ briefs make clear, there is no dispute that the

STGA authorized organization licensees to conduct limited electronic gaming, and the

parties (including Plaintiffs) were aware of such limited competition from authorized

licensees when negotiating and entering into the Compact. Indeed, it was and always has

been central to the Bargain. Nor is there a meaningful dispute in the factual record; the

parties agree that, following the effective date of each of the Compacts, the State: (1) took

various actions to carry out the provisions and requirements of the STGA (such as the

OHRC’s licensing of organization licensees and promulgation of regulations governing

such licenses), all of which were recognized by, and incorporated by reference into, the


8

Model Compact; and (2) held up its end of the Bargain by maintaining and protecting the

substantial exclusivity (near monopoly) guaranteed to the Tribes in 2004, when the Model

Compact was negotiated and the STGA was enacted.

Notwithstanding, Plaintiffs now argue that the Compact has renewed because the

State did not act during the fifteen-year term to entirely prohibit electronic gaming by

organization licensees in Oklahoma. See, e.g., Plaintiffs’ MSJ at 14 (“The State could have

derailed its renewal by completely prohibiting electronic gaming prior to the end of the

Compact’s first term, but did not do so.”).3 That fundamental premise, however, is

completely contrary to the plain and unambiguous language of Part 15(B). The Compact

contains an “Expiration-Unless” termination provision, which expressly states that the

Compacts “shall” expire on January 1, 2020, unless the State acts post-Compact to

authorize electronic gaming by “organization licensees” or “others.” Importantly, the

Compact does not state that it automatically renews on January 1, 2020, unless the State

acts to prohibit electronic gaming (as the Tribes now argue). A simple reading of Part

15(B) shows, without question, that Plaintiffs’ purported construction of this provision is

untenable; Oklahoma’s interpretation is correct and its MSJ should be granted.

3 As discussed infra, in Oklahoma’s MSJ at 27-29, and in Oklahoma’s Response to the Wichita Tribe’s MSJ, Proposition II, “electronic gaming” is a defined term in the STGA. 3A O.S. § 269(8). Plaintiffs and the Wichita Tribe both ignore this express definition in their efforts to expand the renewal provision contained in Part 15(B). See, e.g., Plaintiffs’ MSJ at 18, 24; Wichita Tribe MSJ at 21 et seq. The upshot – and logical extension – of the Tribes’ boundless reading of “electronic gaming in any form” is apparent: under such an argument, the State’s authorization of pinball games during the fifteen-year term would serve to trigger renewal of the Compact, a wholly absurd result.


9

I. The Language of the Compact is Unambiguous, Meaning Parol Evidence is Inadmissible and Summary Judgment is Appropriate.

Oklahoma consistently and repeatedly relies upon, discusses and explains how the

plain and unambiguous language of the Compact mandates that it has expired. See, e.g.,

Oklahoma MSJ, at 1, 5, 14, 19, 21, 35. Interestingly, and perhaps because the plain

language does not lead to renewal, Plaintiffs never commit to a position that the Compact

is, in fact, unambiguous, only using the term in one header on general interpretive rules

(Plaintiffs’ MSJ at 15) and one footnote, simply stating that ambiguity is a matter for the

Court’s determination. Id. at 16 n.7. Similarly, discussions of contracts being ambiguous

are limited to the general canons of interpretation recited by Plaintiffs. Id. at 16. Plaintiffs

do not fully analzye the actual language of Part 15(B) to show how their interpretation is

supported by the actual wording and its plain meaning – because it clearly is not.4

4 A good example of Plaintiffs’ ignoring the plain language of the Compact is found in their argument related to “perpetuity” (MSJ at 33-36). Plaintiffs argue – wrongly – that renewal under Part 15(B) does not result in the Compact renewing in perpetuity. Id. at 33 (“Whether the Compacts will renew again on January 1, 2035, or at some more distant date, is not before the Court….The only issue before the Court is whether the Compacts renewed on January 1, 2020 for an additional term. Whether the Compacts renewed ‘in perpetuity’ is therefore not fit for judicial decision until the end of the second fifteen-year term. And since the Compacts renewed for additional fifteen-year term…”) (emphasis added). The plain language of Part 15(B) expressly provides that if there is triggering conduct by the State which causes renewal on January 1, 2020, then that conduct – which occurs post-Compact and before January 1, 2020 – causes the Compact to “automatically renew for successive fifteen-year terms” (emphasis added). There is no mention in Part 15(B) of any additional conduct that will or could trigger additional future renewals: the contract plainly says that the conduct triggering renewal on January 1, 2020 causes automatic renewal for successive fifteen year terms – i.e., forever. The fact that it says that may have inconvenient corresponding legal implications for the Tribes (i.e., the Compact becomes a contract with no durational limitation and thus terminable at will by the parties), but that does not change the plain language. See also Oklahoma’s MSJ at 17-19. Plaintiffs simply choose to ignore it to suit their position, changing the words


10

Plainly, courts construing unambiguous provisions are not permitted to consider

parol evidence.

Under federal contract principles, if the terms of a contract are not ambiguous, this court determines the parties’ intent from the language of the agreement itself.

Citizen Potawatomi Nation v. Oklahoma, 881 F.3d 1226, 1239 (10th Cir.), cert. denied,

139 S. Ct. 375 (2018). Notably, Plaintiffs quote Citizen Potawatomi in part of their

discussion of general contract principles, Motion at 16, but excise the language regarding

the exclusion of parol evidence for unambiguous contracts.

Instead, Plaintiffs specifically, intentionally and improperly cite to parol evidence,

quoting Oklahoma House Speaker Charles McCall for his post-litigation commentary

interpreting the Compact. Plaintiffs’ MSJ at 18 n.8. Plaintiffs also cite to a post-litigation

news article on the Compact. Id. at 20 n.9. Similarly, Plaintiffs rely on a 2004 State

Legislative Counsel Summary and a 2004 House of Representatives Research Division

Report. Id. Such references are not provided for background or context, but specifically

purport to interpret the Compact.5 Consequently, it appears that Plaintiffs do not actually

“successive additional fifteen-year terms” to “additional fifteen-year term,” and implying some requirement to reassess at some point in the future some unspoken conduct which might trigger future renewals. That is simply not what the words of the contract say, no matter how many pages in their Brief Plaintiffs use to argue otherwise. 5 As previously discussed, Oklahoma does not believe the Compact is ambiguous, and as such, extrinsic evidence should not be considered by the Court in interpreting the Compact. Thus, summary judgment is appropriate in favor of Oklahoma. It is also interesting – and telling – that Plaintiffs do not include any of this extrinsic evidence in their Statement of Undisputed Material Facts. Of course, the State could submit its own parol evidence from sources agreeing with its interpretation of the Compact and Part 15(B), but it is not proper evidence for the Court to consider when construing an unambiguous contract.


11

contend that the Compact is unambiguous, but instead acknowledge that extrinsic evidence

is necessary to support their position and proffered interpretation. “[C]ases involving

ambiguous contracts are inappropriate for summary judgment as there are unresolved

material issues of fact to be determined by the trier of fact.” Lawlis v. Moore Iron & Steel

Corp., No. CIV-13-823-D, 2015 WL 9474291, at *6 (W.D. Okla. Dec. 28, 2015) (quoting

Cinocca v. Baxter Labs., Inc., 400 F. Supp. 527, 532 (E.D. Okla. 1975)).

Plaintiffs cannot have it both ways: if the Compact is unambiguous, then the

extrinsic/parol evidence Plaintiffs submit is admittedly improper; if it is not unambiguous

and extrinsic evidence is necessary, then fact questions are presented which preclude

summary judgment. Either way, Plaintiffs cannot prevail on summary judgment. The

language of the Compact itself must be the only source of interpretation of the meaning of

Part 15(B) for the Court to award summary judgment, and that language compels the

conclusion that the Compact has expired.

II. The Plain and Unambiguous Language of the Compact Shows that It Has Expired and Not Renewed.

All parties quote some or all of Part 15(B) in their MSJs. But only Oklahoma

presents a reading that addresses and gives effect to all of the clauses (and each of the

words therein) of Part 15(B). In its entirety, Part 15(B) provides:

[1] This Compact shall have a term which will expire on January 1, 2020, and [2] at that time, [3] if [a] organization licensees or [b] others [4] are authorized [5] to conduct electronic gaming in any form other than pari-mutuel wagering on live horse racing [6] pursuant to any [a] governmental action of the state or [b] court order [7] following the effective date of this Compact, [8] the Compact shall automatically renew for successive additional fifteen-year terms; [9] provided that, within one hundred eighty (180) days of the expiration of this Compact or any renewal thereof, either


12

the tribe or the state, acting through its Governor, may request to renegotiate the terms of subsections A and E of Part 11 of this Compact. (Emphasis added to included identifiers of clauses discussed below).

Each clause within Part 15(B) is important, and each provides direction and context for

reading the others. Looking briefly at each:

[1] The fifteen-year term expressly provides that the Compact expires, something

Plaintiffs prefer not to acknowledge and instead simply choose to ignore. This clause

establishes the “Expiration-Unless” framework, rather than a “Renewal-Unless” option

urged by Plaintiffs.

[2] All parties agree that “at this time” means as of January 1, 2020.

[3][a] “Organization licensee” is defined as “any person receiving an organization

license.” 3A O.S. § 200.1(9). An organization license is required “to conduct a race

meeting.” 3A O.S. § 205.1(A).

[3][b] “Others” is not expressly defined, but from the context, clearly refers to

“different or additional” parties, excluding organization licensees and other explicitly

enumerated parties, who may be authorized to conduct casino-style electronic gaming. This

reading is supported by the distinction between “electronic gaming,” a term utilized by the

STGA for the gaming authorized for nontribal entities, and “covered games,” the term

describing the gaming authorized for tribes under the Compact.6

6 Plaintiffs’ argument regarding the definition of a “covered game,” Plaintiffs’ MSJ, at 22-23, is misplaced. “Covered games” are defined by the Compact and used to address what games are available to the Tribes under the Compact. 3A O.S. § 281, Part 3(5). The only issue here is whether the State authorized “electronic games,” a separate definition of gaming, which relates exclusively to nontribal gaming at the racetracks.


13

[4] “Authorized,” as used in this provision, requires legislative action because

gambling by organization licensees and other nontribal entities is illegal in Oklahoma until

specifically permitted by legislative authorization. 3A O.S. § 262(A). Tribes are

“authorized” to operate “covered games” pursuant to the Compact. 3A O.S. § 281, Part 4.

Organization licensees are “authorized” to conduct “electronic gaming” under the STGA.

3A O.S. § 262. Administrative agencies, including the OHRC, then perform the necessary

functions as mandated to facilitate the legislature’s statutory scheme – here, the ministerial

function of licensing.

[5] “Electronic gaming” is a specifically-defined term that “means the electronic

amusement game, the electronic bonanza-style bingo game and the electronic instant bingo

game described in [the STGA], which are included in the authorized gaming available to

be offered by organization licensees.” 3A O.S. § 269(8).

[6][a] A “governmental action of the State” is tied directly to “authorization.” Only

the legislature can “authorize” legislation, including the legalization of gambling for

nontribal entities. A state agency, like the OHRC, has limited scope and cannot bind the

State and its legislature to indefinite renewals of the Compact.

[6][b] A court order is an order issued by a court of competent jurisdiction.

[7] “Following the effective date of this Compact” means after the date each

Compact takes effect (i.e., all preconditions are met, see n.2, supra).

[8] If, and only if, all necessary conditions are met, “the Compact shall

automatically renew for successive additional fifteen-year terms.” Notably, as drafted, this


14

condition provides not for a single additional fifteen-year term, but for infinite additional

fifteen-year terms with no durational limit. See n.4, supra.

[9] The renewal provision is subject to an additional condition – the proviso – that

requires renegotiation if requested by either party within 180 days of expiration or renewal.

As set forth in Oklahoma’s MSJ, the unambiguous language of Part 15(B) of the

Compact (i.e., clause [1]) creates an “Expiration-Unless” framework and provides that each

of them expired on January 1, 2020. As discussed below, Plaintiffs argue that “shall” is an

imperative (but only when it suits them); thus, Plaintiffs contend that when the Compact

says “shall automatically renew,” it is mandatory. Plaintiffs’ MSJ at 29. However,

Plaintiffs ignore the primary imperative – that the “Compact shall have a term which will

expire on January 1, 2020.” The entire “shall automatically renew” directive emphasized

by Plaintiffs is predicated entirely on an “if,” making it wholly conditional.7

The condition (clauses [2]-[8]) then states that, in order for the automatic renewal

provision to be triggered, all three questions of the following test must be answered in the

affirmative:

1. Are [3][a] organization licensees or [b] others [4] authorized [5] to conduct electronic gaming in any form other than pari-mutuel wagering on live horse racing [2] as of January 1, 2020?

7 Oklahoma also has no quarrel with Plaintiffs’ understanding of the term “automatic.” Plaintiffs’ MSJ at 19-20. And there is no question that the renewal is “automatic” – once the preconditions are met. Until the post-Compact governmental action of the State authorizes electronic gaming for “organization licensees” and “others” (and all other conditions are fulfilled, see infra, at 26), whether the renewal is “automatic” is irrelevant.


15

2. Does the authority to conduct electronic gaming derive from some [6][a] governmental action of the State or [b] court order?

3. Did the action that is the source of the authority occur [7] following the effective date of the compacts?

Oklahoma agrees that organization licensees are authorized to conduct electronic

gaming as of January 1, 2020 (Question 1), and the source of such authority is a

governmental action of the State (Question 2); however, the condition for renewal is not

met because the source of the authority occurred prior to, and not following, the effective

date of the Compact(s), with the enactment of the STGA (Question 3).

Plaintiffs’ case for renewal has three prongs, each of which ignores the plain

language of the Compact. First, Plaintiffs ignore clauses [6] and [7] and argue that no

further action of the State was necessary to trigger renewal – all the necessary actions to

create a Compact that would automatically renew were found in the STGA, which was in

place before any Compact was entered (Plaintiffs’ MSJ at 19-20). Second, they argue that

if additional action is required, subsequent administrative steps taken by the OHRC to carry

out the intent and purpose of the STGA (and the Model Compact), such as licensing and

rulemaking, as opposed to governmental actions of the State to “authorize” gaming as

contemplated by clauses [4] and [6a], are sufficient to trigger renewal (id. at 21-25). And

third, they create a new question as a straw man – perhaps designed to give effect to clause

[7] but found nowhere in Part 15(B)’s text – that the State must have expanded electronic

gaming (such as by authorizing “additional forms” of gaming) or “reaffirmed its

commitment” to gaming in order to trigger renewal, which Plaintiffs then answer in the

affirmative based upon both the actions identified under the second prong as well as


16

legislative amendments passed in 2017 (H.B. 1836) and 2018 (H.B. 3538) (id. at 26-27).

None of these positions is faithful to the plain language of the Compact, and none of the

actions identified in Plaintiffs’ MSJ satisfies all three parts of the test (as shown in the

following table and discussed in detail below); thus, the Compact has not renewed.

Action Plaintiffs’

MSJ Pages

Date

Question 1: Did it authorize

nontribal electronic gaming as of January

1, 2020?

Question 2: Is it a governmental action of the

State or a Court Order?

Question 3: Did it occur following the effective date of

the Compact?

State adopts the STGA

3, 17-18 11/2/2004 Yes Yes No

OHRC adopts Gaming

regulations 7, 26 3/17/2005

No, it created rules to implement the STGA

No, State does not include

OHRC

No, as to Muscogee (Creek), Seminole,

Delaware and Wichita OHRC issues

gaming licenses for CY 2020

7-8, 20, 26 10/17/2019 No, it licensed it for

2020

No, State does not include

OHRC Yes

H.B. 1836 amended the

STGA

9, 26-27 7/1/2017

No, it removed certain restrictions on weekly hours of operations for previously authorized

games

Yes Yes

H.B. 3538 authorized lottery games via internet and smartphones

10, 27 11/1/2018 No, the lottery is not

identified as a form of “electronic gaming”

Yes Yes

A. Governmental Action that Precedes the Effective Date of the

Compact Cannot Trigger Renewal. Plaintiffs’ first argument is that no further action was required by the parties after

the effective date for the Compacts to “automatically” renew, i.e., enactment of the STGA

alone was sufficient to trigger renewal (and, indeed, would do so unless the State’s

Legislature affirmatively acted to repeal the STGA before January 1, 2020). See Plaintiffs’

MSJ at 19-21. This proposition is necessarily predicated on reading clause [6] identified


17

above (“pursuant to any [a] governmental action of the state or [b] court order”) out of Part

15(B) entirely, as made clear in Plaintiffs’ initial framing of the issue for the Court:

Part 15.B.’s plain terms ask one simple question: Whether, [2] on January 1, 2020, [3][a] “organization licenses or [b] others” were [4] authorized by the State [5] to conduct electronic gaming [7] following the effective date of the Compact?

Plaintiffs’ MSJ at 17-18 (clause numbering added). This framing of the issue also

effectively ignores clause [7], “following the effective date of the Compact,” because it

becomes superfluous in the context of the above question (i.e., January 1, 2020 will always

be after the effective date of the Compact). Moreover, if, as Plaintiffs argue, the existence

of gaming as of January 1, 2020 is all that matters, when it was authorized becomes

immaterial. In effect, Plaintiffs are seeking a construction of that provision which would

cause it to read:

[2] [As of January 1, 2020], [3] if organization licensees or others [4] are authorized [5] to conduct electronic gaming…[8] the Compact shall automatically renew…

Obviously, that is simply not what the Compact says. The Compact states that

governmental action of the State after the Compact is effective to authorize certain gaming

will trigger renewal. Action that precedes the effective date does not satisfy Part 15(B).

There is no way to read Part 15(B) consistent with Plaintiffs’ argument that “no

action” was required without completely ignoring the eighteen (18) words identified above

as clauses [6] and [7]. To achieve Plaintiffs’ suggested reading, the Court would need to

ignore portions of the text, contrary to the rules of interpretation cited by Plaintiffs’

themselves. Plaintiffs’ MSJ at 16. Yet this “reading out” of key language in Part 15(B) is


18

the only basis for a claim that the State must affirmatively act to end electronic gaming to

prevent renewal. Nor could one read the Compact to provide that the mere existence of

“electronic gaming…pursuant to any governmental action of the state” as of January 1,

2020, would cause the Compact to renew.

In addition to violating rules of construction, Plaintiffs’ “no action” proposition is

also contrary to the law that the legislature cannot bind future legislatures (see Oklahoma’s

MSJ at 18), and the State cannot bargain away its own constitutional powers. “If the State

is a party to the contract and the State impairs its own contractual obligation, [the court

must] determine whether the State has impermissibly bargained away one of its police

powers.” Fed. Land Bank of Wichita v. Story, 1988 OK 52, ¶ 9, 756 P.2d 588, 590; United

States Trust Co. of New York v. New Jersey, 431 U.S. 1, 23 (1977) (“In short, the Contract

Clause does not require a State to adhere to a contract that surrenders an essential

attribute of its sovereignty.”) (emphasis added). Stated in different terms:

While the … sovereign[] has the power to enter contracts that confer vested rights, and the concomitant duty to honor those rights, we have declined in the context of commercial contracts to find that a “sovereign forever waives the right to exercise one of its sovereign powers unless it expressly reserves the right to exercise that power in” the contract.

Bowen v. Pub. Agencies Opposed To Soc. Sec. Entrapment, 477 U.S. 41, 52 (1986)

(quoting Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 147-48 (1982)).

The regulation of gambling implicates the police power of the state. See In re

Initiative Petition No. 315, 1982 OK 15, ¶ 12, 649 P.2d 545, 549. Accordingly, the State

cannot wholesale surrender its police power to regulate gambling, as would be the case if

the Compact did not expire (or at least provide an “out” provision). And it did not do so


19

here. The Compact required intentional and purposeful post-Compact government action

to authorize defined gaming by organization licensees in order for the Compact to renew;

the State did not enter a Compact that required “no further action by the State” (Plaintiffs’

MSJ at 20) to forever surrender its sovereign power to regulate gaming.

The STGA was enacted on November 2, 2004. See 3A O.S. §§ 261 et seq.; see also

Fact No. 7. This is before any of the Compacts became effective. See Fact No. 13 (the

effective date of each of Plaintiffs’ Compacts was on or after January 27, 2005). And it is

undisputed that “[t]he STGA authorizes ‘organization licensees’ – i.e., horse racetracks –

to conduct electronic gaming under licenses issued by the [OHRC].” See Fact No. 8.

Indeed, Plaintiffs implicitly support the validity of Oklahoma’s construction of Part 15(B)

by recognizing that organization licensees were authorized to conduct electronic gaming

on January 1, 2020, “pursuant to the STGA, as they have been every year since 2005.” See

Plaintiffs’ MSJ at 18.

As soon as the Secretary published approval of four compacts in the Federal

Register, which occurred on January 27, 2005, the STGA mandated the OHRC to issue

gaming licenses to organization licensees. See Fact Nos. 9, 15. Again, this occurred on or

before the effective date of each of the Compacts, not following them. See Fact No. 13.

Because the enactment of the STGA, and the publication of at least four compacts

in the Federal Register that created the mandatory obligation of the OHRC to issue

organization licenses to racetracks, occurred on or before the effective date of each

Compact (Question 3), this governmental action of the State cannot trigger Part 15(B)’s

automatic renewal.


20

B. Acts in Furtherance of the STGA Following the Effective Date of the Compact Do Not Trigger Renewal.

Plaintiffs’ second (somewhat overlapping) argument posits that, if “additional”

State action following the effective date of the Compact is necessary (which it plainly is),

implementation of the provisions of the STGA itself would satisfy this requirement (which

it certainly does not). Plaintiffs’ MSJ at 21-25. Specifically, Plaintiffs argue that, in

implementing the STGA by promulgating rules and issuing mandated licenses, the OHRC

has triggered renewal of the Compact. This position cannot withstand scrutiny. Beyond the

interpretive result – that the express expiration provision would be extinguished by the very

actions required by the statutory scheme itself – the Compact’s plain language requires

something more, as reflected in the express wording found in Part 15(B).

After initially attempting to short-circuit the analysis by plainly ignoring clauses

within Part 15(B) and arguing that no action is required, as discussed above, Plaintiffs

reframe the three questions that must be asked to determine whether the conditions for

renewal are met in a way that is similar to Oklahoma’s analysis (supra), but which contains

an important difference – one that violates operative rules of construction. Plaintiffs ask:

(1) [2] On January 1, 2020, “are” [3][a] horse racetracks or [b] others [4] “authorized [5] to conduct electronic gaming in any form other than pari-mutuel wagering on live horse racing”;

(2) is that authorization [6] “pursuant to [a] any governmental action of the state or [b] court order”; and

(3) does any such authorized conduct [7] “follow[] the effective date of this Compact.”


21

Plaintiffs’ MSJ at 21 (emphasis in original; clause numbering added). Question 1 and

Question 2 track those set out by Oklahoma almost identically. However, in Question 3,

Plaintiffs ask whether the authorized conduct, rather than the governmental action of the

State, follows the effective date of the Compact. This interpretive sleight of hand is

contrary to the express wording of the Compact and the rules courts use to interpret them.

The United States Supreme Court, and federal courts interpreting government

contracts, has long followed the “grammatical ‘rule of the last antecedent,’ according to

which a limiting clause or phrase … should ordinarily be read as modifying only the noun

or phrase that it immediately follows.” See Barnhart v. Thomas, 540 U.S. 20, 26 (2003);

see also Grand Acadian, Inc. v. United States, 97 Fed. Cl. 483, 497 (2011) (applying the

rule to a government contract). Stated fully, the rule of the last antecedent states that:

[R]eferential and qualifying words and phrases, where no contrary intention appears, refer solely to the last antecedent, which consists of “the last word, phrase, or clause that can be made an antecedent without impairing the meaning of the sentence …” In contrast, “[w]hen a modifier is set off from a series of antecedents by a comma, the modifier should be read to apply to each of those antecedents.”

Finisar Corp. v. DirecTV Grp., Inc., 523 F.3d 1323, 1335–36 (Fed. Cir. 2008) (emphasis

in original). Applying this rule here, clause [7] (“following the effective date of this

Compact”) refers solely to the last antecedent word or phrase, which is clause [6]

(“pursuant to any governmental action of the state or court order”), and not to an earlier

word or phrase, such as clause [4] (“are authorized”). The modifier in clause [7] is not set

off by a comma, and no contrary intention appears that would support Plaintiffs’ reading

of Part 15(B), which is that clause [7], in fact, modifies clause [4]. When read according to


22

rules of grammar and construction, therefore, it is clear that the proper question is not

whether electronic gaming is “authorized” following the effective date – which was always

anticipated by the STGA and the parties – but rather whether some governmental action of

the State following the effective date authorized electronic gaming, which necessarily must

be something not authorized by the STGA as of the date each Compact was entered.

By enacting the STGA in November 2004, before any of the Compacts became

effective, the people of Oklahoma had:

1. Directed the OHRC that it “shall license organization licensees” to conduct electronic gaming if at least four compacts were approved (3A O.S. § 262(A)) (emphasis added);

2. Limited the number of licensees to “three organization licensees operating racetrack locations” that were conducting pari-mutuel wagering (id. § 262(C));

3. Limited the number of player terminals that could be located at each organization licensee to no more than 750 (id. § 262(C)(1));

4. Authorized organization licensees to conduct electronic gaming, as defined by the STGA, at those locations (id. § 262(C)(2); see also § 268(B)); and

5. Directed the OHRC that it “shall promulgate rules to regulate, implement and enforce the provisions of [the STGA] with regard to the conduct of authorized gaming by organization licensees” and other rules (id. § 262(F), (G)) (emphasis added).

Each of the Compacts expressly acknowledged the STGA and adopted certain standards

found in both the act and the OHRC rules. See 3A O.S. § 281, Part 13(D).

The OHRC began issuing licenses to racetracks in 2005 and has issued renewal

licenses annually thereafter (although there are now only two, rather than three, racetracks

licensed to conduct electronic gaming). See Fact No. 17. The OHRC also promulgated

regulations in 2005 and has since amended its rules on several occasions. See Fact No. 18.


23

These actions were expressly required by the STGA. Similar to its “no action” argument,

Plaintiffs’ proposition that these actions are all that is required to trigger renewal renders

clauses [6] and [7] superfluous. Under this reading, for example, there would have been no

reason to include the option of renewal by “court order.” The “governmental action of the

State” would always have been met, as it was required to be met in 2005 and every year

thereafter, because the OHRC was mandated to issue licenses to organization licensees.

Accordingly, these actions taken in furtherance of (but not in addition to or in lieu of) these

five (5) core provisions of the STGA cannot trigger renewal. Otherwise, the fundamental

imperative of clause [1] – the “Expiration-Unless” framework – is ignored, and clauses [6]

and [7] requiring post-Compact action are rendered meaningless.

Oklahoma agrees with Plaintiffs’ position that the authorization of some new or

additional form of class III electronic gaming after the Compact takes effect is neither

necessary nor sufficient to trigger renewal. See Plaintiffs’ MSJ at 23-25. It is not entirely

clear what “additional” form such electronic gaming could take.8 But this does not lead to

8 Oklahoma does not disagree with Plaintiffs’ position that Part 11(A) (and Part 11(E)) of the Compact is broader than Part 15(B) and specifically addresses additional “forms” of gaming, including non-electronic gaming. See Plaintiffs’ MSJ at 25. Action that could terminate the Tribes’ obligation to pay Exclusivity Fees, therefore, could include: (1) organization licensees being authorized to conduct some “addition form of gaming,” not limited to “electronic gaming,” as in Part 15(B); or (2) the authorization of “others” to conduct “any additional electronic or machine gaming within Oklahoma.” Notably, in both cases, the Compact provides that such must be accomplished by a “change in law.” The point – again – is that while the words describing the various triggers in Parts 11(A) (exclusivity fees), 11(E) (liquidated damages) and 15(B) (expiration/renewal) are all slightly different, the Compact’s intent – evident from its clear language – is to provide for a fifteen-year term, protect the status quo during that term, and ensure the existence of tribal gaming in Oklahoma into the foreseeable future. The Compacts were drafted to ensure all of these important goals, as evidenced by the wording of these provisions.


24

the conclusion Plaintiffs suggest (that the Part 15(B) trigger of renewal is satisfied by the

mandated OHRC issuance of a ministerial license). It simply means that under the

established framework of Part 15(B), as long as the status quo was maintained during the

fifteen-year term (e.g., substantial exclusivity was maintained regarding the limited

authorization of organization licensees to conduct electronic gaming), the Compact would

expire. To the contrary, had the legislature, for example, amended the STGA to authorize

more racetracks to conduct electronic gaming, increased the number of player terminals,

or allowed other nontribal entities to conduct electronic gaming at new casinos in

Oklahoma as of January 1, 2020, renewal would have been automatic.

C. No Additional “Action” Identified by Plaintiffs Meets the Requirements for Renewal of Part 15(B).

Recognizing the limitations on their “no-action” arguments, Plaintiffs contend that

the State has taken steps to “expand” electronic gaming or “reaffirm” its commitment to

such gaming since the Compacts were entered. Plaintiffs’ MSJ at 21-27. This is a straw

man argument, because Oklahoma’s position is that the authority for organization licensees

to conduct electronic gaming as of January 1, 2020, is derived from the STGA, which was

enacted before – and not following – the effective date of each of the Compacts. Moreover,

no facts presented by Plaintiffs demonstrate that the State has actually expanded electronic

gaming, as defined by the STGA, for organization licensees or others. Further, no provision

of the Compact supports a reading that by “reaffirming” its commitment to electronic

gaming (i.e., by simply not acting to prohibit all such gaming in Oklahoma), the State has

acted to trigger renewal.


25

Notwithstanding, Plaintiffs identify the following four actions which they contend

trigger the renewal provision: (1) OHRC promulgation of rules; (2) OHRC licensing of

Remington Park and Will Rogers Downs in 2019 for calendar year 2020; (3) the

legislature’s revisions to hours of gaming at organization licensees in 2017; and (4) the

legislature’s approval of the use of the internet in Lottery operations in 2018. None of these

four activities satisfy all the conditions necessary to trigger renewal.

OHRC Rulemaking and Licensing. As discussed above, OHRC rulemaking and

licensing does not trigger renewal. These activities were explicitly contemplated by the

STGA and were part of the Bargain, not some extension thereof. Moreover, as discussed

in detail in Oklahoma’s MSJ, at 29-35, the OHRC is not the “State” as defined in the

Compact; nor is it authorized to cause the Compact to renew. Where the parties intended

to refer to the OHRC in the Compact, it did so specifically. See, e.g., 3A O.S. § 281, Parts

3.5, 3.25, 4(B), 13(D); Plaintiffs’ MSJ at 23. Thus, an act of the OHRC does not satisfy

Question 2.

Additionally, neither rulemaking nor licensing by the OHRC satisfies Question 1.

All parties agree that the terms of the Compact must be read as part of the whole with the

intent to give meaning to each word. See, e.g., Plaintiffs’ MSJ at 20 (“[A] contract should

be interpreted as a harmonious whole.”); 16 (“giving meaning to every word”). However,

Plaintiffs seek to define “governmental action” in a vacuum, ignoring the surrounding

words which provide meaning and context. If “governmental action” was meant to include

every way the State conducts business, then the term “court order” immediately following

“governmental action of the State” in Part 15(B) would be redundant and meaningless.


26

As discussed at length in Oklahoma’s MSJ, at 23-27, the STGA repeatedly utilizes

the term “authorized” in the context of legislative action. The STGA uses the terms

“authorized gaming” or “authorized games” 28 times. “‘Authorized games’ means the

games that organizational licensees are authorized to conduct pursuant to this act.” 3A

O.S. § 269(1); see also 3A O.S. § 264(E) (specific provision is effective six months after

“the organization licensee commences authorized gaming as authorized by this act.”)

(emphasis added). Such games are not “authorized” because they are licensed, they are

“authorized” because they are “defined in this Act” or “specifically allowed by law,” a

gaming compact, or IGRA. 3A O.S. § 262(C)(2). The legislature directs that the OHRC

“shall promulgate rules to regulate the operation and use of authorized gaming.” Id.

Moreover, there is a clear distinction between authorizing and licensing. After four

compacts take effect, “the [OHRC] shall license organization licensees which are licensed

pursuant to [the STGA] to conduct authorized gaming as that term is defined by this act.”

3A O.S. § 262(A) (emphasis added). This provision – mandating the ministerial issuance

of licenses – cannot be read to suggest that the OHRC is charged with authority to legalize

electronic gaming not otherwise authorized by law. As provided by Plaintiffs:

The word “shall” is ordinarily “the language of command.” “Shall” is defined as “has a duty to; more broadly, is required to,” and it is “clear, mandatory language” when used in a contract.

Plaintiffs’ MSJ at 29-30 (citations omitted); see also id. at 30 n.13 (applying the same

meaning to the use of the world “shall” in a statute). In short, the OHRC has the mandatory

task of applying the STGA, by issuing regulations and licensing racetracks, all pursuant to

the STGA, which alone authorizes nontribal gaming in Oklahoma.


27

In sum, the OHRC’s issuance of licenses and promulgation of rules necessary to

carry out the provisions of the STGA do not “authorize” electronic gaming – they merely

address the necessary administrative requirements to effectuate the authorization provided

by the statute (here, offering to named licensees a privilege not enjoyed by those who are

not so licensed). These actions do not trigger renewal under Part 15(B).

Revisions to Hours of Gaming at Organization Licensees. The legislature’s 2017

amendment to the STGA (H.B. 1836) is a governmental action of the State (Question 2)

following the effective date of each of the Compacts (Question 3), but it did not authorize

“electronic gaming” (Question 1). Again, “‘[e]lectronic gaming’ means the electronic

amusement game, the electronic bonanza-style bingo game and the electronic instant bingo

game described in this act, which are included in the authorized gaming available to be

offered by organization licensees.” 3A O.S. § 269(8). H.B. 1836 provides:

“Authorized Except for Christmas Day, authorized gaming may only be conducted by an organization licensee on days when the licensee is either conducting live racing or is accepting wagers on simulcast races at the licensee's racing facilities. In any week, authorized gaming may be conducted for not more than one hundred six (106) total hours, with not more than eighteen (18) hours in any twenty-four-hour period.”

Plainly, before the amendment was adopted, the statute already included “authorized

gaming.” As previously discussed, the STGA authorized such gaming at the time the law

went into effect. Post-amendment, the same “authorized gaming” remained in the statute.

H.B. 1836 simply removed certain restrictions on weekly hours of operation. It did not add

to the “authorized gaming” already articulated in the STGA prior to the effective date of

any Compact.


28

Playing the Lottery over the Internet. H.B. 3538 is even further removed from

authorizing electronic gaming (Question 1). It simply allowed for the use of the internet to

conduct the already authorized lottery games – it is a change in communication not in

gaming. Moreover, the lottery is not “electronic gaming” under clause [5], but instead a

defined activity under the Oklahoma Education Lottery Act, specifically “excluding

charity bingo and games conducted pursuant to the Oklahoma Charity Games Act, poker,

blackjack, slot machines, pulltab machines, card games, dice, dominos, roulette wheels, or

other similar forms of gambling, or electronic or video forms of these gambling

activities, or games where winners are determined by the outcome of a sports contest, or

pari-mutuel betting conducted pursuant to the Oklahoma Horse Racing Act.” See 3A O.S.

§ 703(9) (defining lottery) (emphasis added). H.B. 3538 did not relate to electronic gaming,

let alone authorize any new electronic games (or games of any type for that matter).

III. A Request to Renegotiate – The Final Precondition

Part 15(B) of the Compact plainly provides that it expires unless certain

preconditions are met, including the renewal condition found in clauses [2] through [8].

The last precondition is found in clause [9], the “proviso.” As discussed in Oklahoma’s

MSJ, at 38-39, a party seeking to enforce a provision of a contract must first fulfill all

conditions precedent.9 Just as there must be a governmental action of the state authorizing

electronic gaming, Plaintiffs must engage in renegotiation of the prescribed portions of the

9 Plaintiffs devote six pages of their MSJ (pp. 27-32) to arguing that renegotiation does not affect the expiration/renewal provision of Part 15(B). Plaintiffs miss the point: their failure to negotiate as requested – a breach of their obligations under Part 15(B) – precludes their right to ask this Court to enforce their claimed renewal rights under the same provision.


29

Compact before they can contend that the Compact has renewed. They have clearly failed

to do so. See Oklahoma MSJ, UMF 13-16.

IV. The Court Must Construe the Compact in Its Entirety.

Plaintiffs argue that “whether the Compacts last in perpetuity is not before this

Court.” Plaintiffs’ MSJ at 33.10 This simply is not correct. The plain language of the

Compact provides that “the Compact shall automatically renew for successive additional

fifteen-year terms.” There is no language regarding the requirement of governmental action

of the state or court order to trigger a successive renewal after the initial renewal. Similarly,

Part 15(C) provides: “This Compact shall remain in full force and effect until the sooner

of the expiration of the term or until the Compact is terminated by mutual consent of the

parties.” There is no dispute that the “expiration of the term” is January 1, 2020. That date

has now passed. Because it was the “sooner” of the options, as no mutual consent of the

parties occurred prior to January 1, 2020, there is no longer a contractual option for mutual

termination.

The issue of what occurs in light of the Court’s ultimate determination is relevant

to the Court’s instant analysis. Oklahoma is simply requesting that the Court find that the

Compacts have expired, as they were intended to do. This will require the parties to return

10 Plaintiffs cite to several compacts to argue that Oklahoma has agreed to termination by mutual consent provisions on a number of occasions. Notably, Plaintiffs do not identify a single gaming compact, instead citing exclusively to compacts between states, which expressly require congressional approval. This requirement makes these compacts and the corresponding authorities wholly distinguishable. See, e.g., Arizona v. Tohono O'odhom Nation, No. CV11-0296-PHX-DGC, 2011 WL 2357833, at *10 (D. Ariz. June 15, 2011), aff'd sub nom. Arizona v. Tohono O'odham Nation, 818 F.3d 549 (9th Cir. 2016).


30

to the bargaining table to hash out a deal, something Oklahoma has proven it is willing to

do and IGRA requires it do in good faith subject to DOI approval. Conversely, Plaintiffs

seek a judicial determination that the Compact, if renewed for successive terms, has

become a contract of indefinite duration (which would render it terminable at will under

applicable law).

V. The Governor’s Authority

Plaintiffs’ final contention is beyond the scope of the partial summary judgment

briefing ordered by the Court “on the issue of whether the Tribal Gaming Compact entered

between each Plaintiff or Intervenor and the State of Oklahoma automatically renewed or

terminated pursuant to Part 15.B.” Order of 4/23/20 (Dkt. No. 122) at 2. Regardless, it is

predicated on the false assumption that the Compact has not expired. Plaintiffs’ MSJ at 37

(“Defendant has no authority to take such action under state law because the Compacts are

in effect and have the force of federal law.”).11 Since the Compact has expired as a matter

of contract and law, the issue is not only beyond the scope of the Court’s Order, it is wholly

irrelevant.

CONCLUSION

For the reasons set forth herein and in Oklahoma’s MSJ, Plaintiffs’ MSJ should be

denied, and summary judgment granted for Oklahoma.

11 For a thorough discussion of the Governor’s powers and the Compacts, see Oklahoma’s Motion to Clarify Parties Authority to Comply with Court’s Mediation Order (Dkt. No. 131).


31

Respectfully submitted by: s/Phillip G. Whaley Phillip G. Whaley, OBA No. 13371 Daniel G. Webber, Jr., OBA No. 16332 Patrick R. Pearce, Jr., OBA No. 18802 Matthew C. Kane, OBA No. 19502 RYAN WHALEY 400 North Walnut Avenue Oklahoma City, OK 73104 Telephone: (405) 239-6040 Facsimile: (405) 239-6766 [email protected] [email protected] [email protected] [email protected]

-and-

Steven K. Mullins, OBA No. 6504 Matthew K. Felty, OBA No. 31057 LYTLE, SOULÉ & FELTY, P.C. 1200 Robinson Renaissance 119 N. Robinson Ave. Oklahoma City, OK 73102 Telephone: (405) 235-7471 Facsimile: (405) 232-3852 [email protected] [email protected] -and- Mark E. Burget, OBA No. 1326

Jeffrey C. Cartmell, OBA No. 31012 State of Oklahoma, Office of the Governor 2300 N. Lincoln Boulevard, Suite 212

Oklahoma City, OK 73105 Telephone: (405) 521-2342

[email protected] [email protected]

ATTORNEYS FOR J. KEVIN STITT, AS GOVERNOR OF THE STATE OF OKLAHOMA, AND EX REL. THE STATE OF OKLAHOMA


32

CERTIFICATE OF SERVICE I hereby certify that on June 12, 2020, I electronically transmitted the attached document to the Clerk of Court using the Electronic Filing System for filing. Based on the records currently on file in this case, the Clerk of Court will transmit a Notice of Electronic Filing to those registered participants of the ECF System. s/Phillip G. Whaley Phillip G. Whaley


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