Supreme Court Hears Oral Argument in Bay Mills Case

Transcription

1 Indian Nations Law Focus December 2013, Volume 8, Issue 12 Supreme Court Hears Oral Argument in Bay Mills Case Brian L. Pierson The Godfrey & Kahn Indian Nations Law Practice Group provides a full range of legal services to Indian nations, tribal housing authorities, tribal corporations and other Indian country entities, with a focus on business and economic development, energy and environmental protection, and housing development. Oral arguments were heard December 2 in the case of Michigan v. Bay Mills Indian Community. The Bay Mills Indian Community (Tribe) had opened a casino on land off reservation that it claimed to be within the land claim settlement exception to the prohibition against gaming on lands acquired after the enactment of the Indian Gaming Regulatory Act (IGRA). The National Indian Gaming Commission (NIGC) determined that the land did not fall within the exception and, therefore, was not Indian land where gaming could be conducted under IGRA. The NIGC declined, however, to order the casino closed, asserting that its enforcement powers extended solely to gaming on Indian lands. The State of Michigan sued the Tribe directly for money damages and injunctive relief, asserting that the Tribe s sovereign immunity should not protect it from a state suit to enforce state law off reservation. The Tribe suspended operations pending the outcome of litigation. During oral argument, Michigan focused on the fact that, under the Foreign Sovereign Immunities Act, Michigan would be able to sue a foreign sovereign, like France or Germany, for alleged illegal activities of a commercial nature and that, under Supreme Court precedent, Michigan could also sue another state but that, under the Court s 1998 decision in Kiowa, Michigan could not sue a tribe. The Tribe argued that there was no reasons to depart from the Kiowa ruling and that Michigan has other means of enforcing state law to shut down an illegal tribal gaming operation off reservation, including a suit for injunctive relief under the Ex Parte Young doctrine or criminal enforcement actions against the individuals operating the casino. The court will decide the case before its term ends in June, probably much earlier. BIA Amends Fee-to-Trust Regulations On November 13, the Bureau of Indian Affairs (BIA) published a final rule amending the fee-to-trust regulations at 25 C.F.R. Part 151 to remove the requirement that the Secretary of the Interior publish a notice of intent to take land into trust in the Federal Register or in a newspaper of general circulation at least 30 days before acquiring title in trust. The 30-day notice requirement, adopted in 1996, was based on the assumption that the Quiet Title Act prohibition against suits challenging title to trust lands would make a challenge impossible once the Secretary had taken title and that the 30-day window was necessary to allow suits to be filed before the acquisition became final. The amendment reflects BIA s determination that the 30-day notice is unnecessary in light of the Supreme Court s decision in Match-E- Be-Nash-She-Wish Band v. Patchak, 132 S.Ct (2012). In that case, the Court held that a person challenging the Secretary s acquisition of land in trust, but not asserting his title to the land, could bring suit at any time within the six-year statute of limitations for actions under the Administrative Procedure Act (APA), even if the Secretary had already accepted a deed in trust. Indian Nations Law Focus December 2013 Page 1

2 The new rule clarifies that notice of feeto-trust decisions by BIA officials below the Assistant Secretary-Indian Affairs (AS-IA) will be published in a local newspaper of general circulation and that persons wishing to challenge such decision must exhaust administrative remedies by filing a notice of appeal pursuant to the 25 C.F.R. Part 2 procedures within 30 days. Fee-to-trust decisions by the Secretary or AS-IA, by contrast, are final actions within the meaning of the APA and subject to federal court challenge. Godfrey & Kahn to Present on Financing Renewable Energy at NAIHC Symposium Brian Pierson, leader of Godfrey & Kahn s Indian Nations Law team, and John Clancy, leader of the firm s Environmental and Energy Strategies team, will present Financing Renewable Energy for Indian Housing from 10:45 a.m. - 12:15 p.m. on Wednesday, December 11, 2013 at the Venetian in Las Vegas as part of the National American Indian Housing Council s (NAIHC) Annual Legal Symposium. The presentation will describe strategies and financing sources to help tribes and Tribally Designated Housing Entities (TDHEs) achieve energy independence consistent with tribes Seven Generations tradition. We will describe how tribes and TDHEs can partner with developers to take advantage of federal investment tax credits and other tax benefits. Business structures and related leasing issues, including the HEARTH act and Wind and Solar Resources leases, will also be addressed. We will explain how reduced energy costs and state and federal grants can cover additional portions of development costs. Finally, we will discuss development of generation facilities that can power both tribal enterprises and tribal housing and the permissible uses of the Indian Housing Block Grant and other financing sources in connection with such projects. We will illustrate recommended clean energy strategies with cases studies. To register, visit NAIHC s website: legal-symposium/ Godfrey & Kahn has extensive experience working with tribes to achieve energy independence and sustainability goals. For more information, contact Brian Pierson at or bpierson@gklaw.com Tribal Renewable Energy Conference to be Held in Milwaukee Feb Law Seminars International will present Tribal Energy Development in the Great Lakes, a two-day conference to be held February 20-21, 2014 at the Hyatt Regency Hotel in Milwaukee. Godfrey & Kahn Indian Nations Law team leader Brian Pierson and Forest County Potawatomi Attorney General Jeffrey Crawford will serve as co-chairs. Renewable energy development has become a top priority for many Midwest Tribes seeking to (1) strengthen sovereignty through energy independence, (2) promote environmental stewardship by transitioning from reliance on energy from coal-fired plants that contribute to climate change and contaminate reservation air and waterways and (3) reduce long term energy costs. Conference topics will include: Environmental challenges that Great Lakes tribes face and the renewable energy resources available Interaction between energy law, environmental law and Indian law in the development of tribal renewable energy resources Long term competitive outlook for renewable energy Federal, state and private grant, loan and other incentive programs, including investment tax credits, and practical tips for taking advantage of them Case studies of renewable energy projects currently being pursued by Midwest tribes Environmental issues for combustion-related generation and their impact on energy markets New leasing rules for renewable energy development Tribal utilities For more information, including the draft agenda and registration information, visit the LSI website at: php?seminarcode=14tribwi Selected Court Decisions In Fletcher v. U.S., 730 F.3d 1206 (10th Cir. 2013), the Osage Tribe unexpectedly found itself occupying land that was discovered at the turn of the 20th century to be rich in oil and gas. The federal government assumed the role of trustee of the Tribe s mineral wealth. By the Act of June 28, 1906, Congress severed the mineral estate underlying Osage lands from the surface estate, placed the mineral estate in trust, directed the Secretary of Interior to collect royalties, and directed the Secretary to distribute the royalties and interest every quarter on a pro rata basis to individual members of the Tribe. Congress provided for the creation of an official tribal roll to identify members entitled to receive Indian Nations Law Focus December 2013 Page 2

3 royalties, also known as headrights. Ownership of the headrights became fractionated through several generations. Congress amended the 1906 act to limit the right of headright owners to assign their headrights to non-members of the tribe. In 2002, certain tribal members sued the government for breach of its fiduciary duties and sought an accounting. The district court granted the government s motion to dismiss, but the Tenth Circuit reversed, citing 25 U.S.C. 162a(d)(5) providing that the government supply[ ] account holders with periodic statements of their account performance and 25 U.S.C. 4011(a) requiring the Secretary to account for the daily and annual balance of all funds held in trust by the United States for the benefit of an Indian tribe or an individual Indian which are deposited or invested pursuant to section 162a of this title. In Chance v. Texas Dept. of Criminal Justice, 730 F.3d 404 (5th Cir. 2013), Chance, a state prisoner, sued prison officials pursuant to the Religious Land Use and Institutionalized Persons Act (RLUIPA), alleging that the defendants violated the act by restricting his exercise of Native American religious practices. The Fifth Circuit Court of Appeals held that (1) the prison s complete ban on communal pipesmoking did not violate RLUIPA, (2) the prison s schedule of Native American religious services did not violate RLUIPA, (3) the prison policy limiting Native American Smudging ritual to outdoor ceremonies did not violate RLUIPA, but (4) summary judgment would be denied because there was a genuine issue of material fact whether the prison s refusal to allow Chance to possess locks of his relatives hair was the least restrictive means of furthering the prison s compelling interests: While we must give due deference to TDCJ s expertise in prison administration and security, this deference does have limits. If TDCJ can absolutely prohibit something as benign as a lock of hair by appealing to its general approvedvendors-only policy, then TDCJ could conceivably prohibit anything. On this record, there is a dispute about the dangers posed by hair and the necessity of a no-exceptions policy, as well as the potential viability of simply inspecting or testing the hair. In U.S. Mitchell, 2013 WL (W.D.N.Y.), the defendant was indicted on charges of stealing from an Indian gaming enterprise. He moved to dismiss, arguing that his actions were within the scope of his employment and, therefore, protected by tribal sovereign immunity. The district court adopted the magistrate s recommendation denying the motion on the ground that immunity that protected tribal officials acting within the scope of employment did not apply in the criminal context: As the government points out, scheming to steal and then stealing $338,000 from the Seneca Nation hardly qualifies as an act within the scope of the defendant s authority. Government s Response....By contrast, in Sue/Perior Concrete the court noted that the complaint did not allege that any of the individual defendants personally profited or benefitted in any manner from their alleged acts of misconduct. In U.S. v. Good, 2013 WL (D. Minn.), Good, a member of the Red Lake Chippewa Tribe, was indicted for violating the Lacey Act by transporting and selling fish in violation of federal regulations. 16 U.S.C. 3372(a). Good moved to dismiss on the grounds that his right to fish on the Red Lake Reservation is protected by the 1837 Treaty with the Chippewa (1837 Treaty), 7 Stat. 536, July 29, 1837, and that the treaty precludes federal prosecution. The court agreed and dismissed the indictment: But these provisions do not indicate any intent by Congress that the Act s prohibitions would apply to Indians holding exclusive treaty-based rights to hunt and fish. Rather, they are best interpreted as permitting and facilitating federal enforcement of tribal law violations in situations that would not offend treaty rights. For example, this could include federal enforcement of tribal law against non-indians on Indian land. This could also include federal enforcement (in conjunction with tribes or states) of the Lacey Act where fishing rights are held in common with non-indians, as with the treaty rights in Sohappy. Nothing in the text or the legislative history suggests that the possibility of joint or concurrent enforcement in some cases indicates Congress s specific intent to abrogate treaty rights in cases where those rights protect an exclusive right to hunting and fishing. These provisions are not rendered superfluous under the Court s interpretation that the Lacey Act did not abrogate the 1837 Treaty rights and therefore does not permit federal prosecution for violations of tribal fishing law. Neither provision contains the kind of explicit recognition of the treaty rights and choice to abrogate them required by the Supreme Court. See magistrate judge s contrary recommendation at United States v. Tibbetts, 2013 WL (D.Minn. 2013). See companion decision in U.S. v. Brown, 2013 WL (D.Minn. 2013). In Bettor Racing, Inc. v. National Indian Gaming Com n, 2013 WL (D.S.D. 2013), the Flandreau Sioux Tribe had entered into various agreements with Bettor Racing, a corporation organized under South Dakota law and owned by Gallo (collectively Gallo ), a Florida resident. In 2003, Gallo relocated Bettor Racing from Sioux Falls, South Dakota, to the Tribe s Royal River Casino to avoid a state tax on parimutuel betting. In 2004, the Tribe and Bettor Racing reached agreement on a management Indian Nations Law Focus December 2013 Page 3

4 contract, which the National Indian Gaming Commission (NIGC) approved in 2005 after requested changes had been made. In 2004, Gallo and the Tribe also entered into a separate consulting contract, not submitted to NIGC, under which Gallo assisted the Tribe in running a parimutuel betting operation at Royal River Casino. This consulting agreement was never approved by the NIGC. Gallo and the Tribe later revised their management contract without submitting it to NIGC for approval. In 2009, following a compliance review, NIGC issued a notice of noncompliance to Bettor Racing, finding that its fees exceeded the limits allowed under the Indian Gaming Regulatory Act (IGRA) and ordering Bettor Racing to pay $4,544,755 to the Tribe as a remedy for the alleged overpayments and to pay a $5 million fine. On administrative appeal, the NIGC upheld the civil fine but nullified the remedial payments to the Tribe. The Tribe then sued Bettor Racing in Flandreau Santee Sioux Tribal Court, alleging breach of contract and unjust enrichment. Bettor Racing filed a counterclaim and also sued the NIGC in federal court. The Tribe moved to intervene and, against Bettor Racing s objection, the court granted the motion: Despite plaintiffs assertions, the Tribe has an important role to play in the adjudication of the factual allegations made by plaintiffs. Plaintiffs would not suffer undue prejudice from the involvement of the Tribe, particularly when many of plaintiffs claims relate to the interaction between plaintiffs and the Tribe over almost a decade. In Magyar v. Kennedy, 2013 WL (E.D. Pa. 2013), Magyar sued three elected officials of the Delaware Tribe individually and personally for money damages for allegedly illegally interfering with his contractual relationship with the Tribe. The defendants moved to dismiss on sovereign immunity grounds, but the court denied the motion, holding that the defendants were subject to suit because they acted outside the scope of their authority: Plaintiff s Second Amended Complaint alleges that a majority vote of the Lenape Board of Directors is required to take any action and that no such vote took place before Kennedy terminated the Lenape Agreement. Accordingly, we conclude that the Second Amended Complaint alleges facts sufficient to persuade us that Defendants are not protected by sovereign immunity in connection with Count One of the Second Amended Complaint. In Sierra Club v. United States Army Corps of Engineers, 2013 WL (D.D.C. 2013), the Sierra Club and the National Wildlife Federation brought an action for a declaratory judgment against several federal agencies and their executive officers in their official capacity to block construction of the Flanagan South (FS) Pipeline, a domestic, privately owned, 589-mile oil pipeline running from Illinois to Oklahoma (Pipeline), alleging that the defendants failed to assess adequately the environmental impacts of the Pipeline in violation of the National Environmental Protection Act (NEPA), the Clean Water Act (CWA), and the Administrative Procedure Act (APA). The plaintiffs argued that, even though 96% of the land rights along the route required no federal approval, the miles of pipeline over U.S. waters requiring approval by the Army Corps of Engineers and the 12.3 miles of pipeline over individually owned tribal trust land requiring the approval of the BIA pursuant to the Part 169 Right of Way regulations were sufficient to trigger the requirement for a full environmental impact statement addressing the entire Pipeline. The district court disagreed and denied the plaintiffs motion for injunctive relief: Plaintiffs have significantly overstated the degree of federal involvement in the FS Pipeline in an attempt to shoehorn this essentially private project into the NEPA statute; consequently, at least on the record as it currently stands, Plaintiffs claim that NEPA requires a comprehensive environmental review is unlikely to be successful. In George ex rel. C.M.F. v. Superior Court of Washington, 2013 WL (E.D. Wash. 2013), Paulette George, a member of the Yakama Nation, and Gary Fox, a member of the Gros Ventre Tribe, had three minor children who were enrolled Yakama members. The Yakama tribal court established paternity and ordered joint custody but no child support. When the couple separated, they and the children resided in Spokane County. Paulette filed a custody petition in the Yakama tribal court, which awarded her sole custody. She lived with the children on tribal land until the summer of Gary filed a custody petition in the Spokane County Superior Court. Paulette contested state court jurisdiction but agreed to the appointment of a guardian ad litem. Gary obtained custody in June, 2013 and his motion for temporary custody was scheduled to be heard by the county court in November Paulette filed a federal lawsuit asking the court to enjoin the county court from hearing the matter but the court declined to do so: Younger and its progeny espouse a strong federal policy against federal court interference with pending state judicial proceedings. Absent extraordinary circumstances, Younger abstention is required if the state proceedings are (1) ongoing; (2) implicate important state interests; and (3) provide the plaintiff an adequate opportunity to litigate federal claims. The Superior Court had apparent concurrent personal jurisdiction over the parties with the Tribal Court and has jurisdiction to determine the legal affect of the Tribal Court proceedings, its own jurisdiction, and to consider deferring to Indian Nations Law Focus December 2013 Page 4

5 the Tribal Court if it finds it appropriate. In Becker v. Ute Indian Tribe of the Uintah and Ouray Reservation, 2013 WL Not Reported in F.Supp.2s (D.Utah 2013), Becker sued the Ute Tribe and various related tribal entities in federal court for alleged violations of various agreements, contending that the court could exercise jurisdiction under 28 U.S.C. s because the agreement did not require federal approval and because the defendants had asserted tribal sovereign immunity as a defense. The court granted the defendants motion to dismiss: Here, Becker s causes of action are not created by federal law, but are state-law causes of action and therefore do not qualify for federalquestion jurisdiction under the general rule. Notwithstanding, Becker lists a number of potential federal issues that he claims warrant federal-question jurisdiction. For example, he notes that the Agreement did not require approval by the United States Secretary of the Interior under 25 U.S.C. 81, and that the Agreement is a valid mineral agreement within the meaning of the Indian Mineral Development Act of However, these assertions are simply ways that federal laws are peripherally implicated, which does not meet the arising under standard. But the Supreme Court has repeatedly stated that there is no federal-question jurisdiction based solely on possible federal defenses. In the case of In re Meier, 2013 WL (E.D. N.C. 2013), Meier, a member of the Pokagon Band of Potawatomi Indians (Tribe) filed for discharge of her debts pursuant to Chapter 7 of the U.S. Bankruptcy Code. The bankruptcy trustee sought an order requiring Meier to turn over monthly per capita payments she received under the tribe s Revenue Allocation Plan (RAP) governing distribution of gaming revenue to eligible tribal members. The court denied the motion, holding the payments were non-transferrable under the RAP: [T]he Plan provides that the debtor has no vested property right or interest in the gaming revenues, which are held as property of the Band until disbursed.. The Plan makes no allowances for transferability within the tribe, and its protocols are inconsistent with transferability to outside third parties. It appears to the court that these gaming payments are far removed from the sort of property that typically comes within the ambit of The very premise of the Plan, which declares as its purpose that the Per Capita Account shall be used exclusively to make payments to eligible members, indicates the tribe s clear intent to preclude sale or transfer of the right to receive payments to anyone outside of the tribe.to countenance such transfers would frustrate the tribe s purpose of using the per capita payments to provide for personal health, safety, and welfare of Band members. On this note, it is worth pointing out that in a liquidation bankruptcy, if the court were to allow turnover, the debtor would lose her right to future payments upon satisfaction of the debt. These per capita payments are both inconsistent and relatively modest on an annualized basis, but considered cumulatively, over the course of the debtor s lifespan, they may ultimately total to a substantial sum. The permanent loss of this income stream and abandonment of the sums payable after satisfaction of the debt would dramatically impede not only the debtor s capacity to make the fresh start envisioned by the Bankruptcy Code, but also to maintain her standard of living for decades to come. In the case of In re Platinum Oil Properties, LLC, 2013 WL (D. N.M. Bankr. 2013), Platinum Oil Properties LLC (POP) claimed to hold the right to operate oil and gas extraction activities under an assignment of oil and gas leases relating to land on the Jicarilla Apache Reservation. The bankruptcy court found that POP had no such rights because the transfer of operating rights had not been approved by the Secretary of the Interior pursuant to the Indian Mineral Leasing Act of 1938: The language of 25 C.F.R , though not a model of clarity, provides that a transfer of operating rights requires the Secretary s approval, either because operating rights constitute an interest in an oil and gas lease subject to the Secretary s approval under subsection (a) of 25 C.F.R , or because a transfer of operating rights constitutes a direct or indirect assignment or sublease of an interest in or the use of a lease, by working or drilling contract or otherwise, subject to the Secretary s approval under subsection (b) of the regulation. In State ex rel. Dewberry v. Kitzhaber, 2013 WL (Ore. App. 2013), Oregon s governor in 2003 had signed a tribal-state gaming compact between the state and the Confederated Tribes of Coos, Lower Umpqua and Siuslaw Indians (the Tribes) pursuant to the Indian Gaming Regulatory Act, 25 USC (IGRA). Persons opposed to the Tribes proposed casino sued, challenging the governor s authority under Oregon law and citing a provision of the Oregon Constitution that [t]he Legislative Assembly has no power to authorize, and shall prohibit, casinos from operation in the State of Oregon. The Oregon court of appeals upheld the governor s authority and rejected the challenge, holding that (1) the legislature had delegated authority to the governor through a statute, ORS , providing that a state agency of this state may cooperate for any lawful purpose, by agreement or otherwise, with an American Indian tribe and that this power includes the power of the Governor or the designee of the Governor to enter into agreements to ensure that the state does not interfere with or infringe on the exercise of any Indian Nations Law Focus December 2013 Page 4

6 right or privilege of an American Indian tribe and (2) the constitutional ban does not apply on Indian lands located within Oregon s borders. Indian Nations Team Members Mike Apfeld, Litigation mapfeld@gklaw.com Peggy Barlett, Health Care pbarlett@gklaw.com Marvin Bynum, Real Estate mbynum@gklaw.com John Clancy, Energy & Environmental jclancy@gklaw.com Todd Cleary, Employee Benefits tcleary@gklaw.com Shane Delsman, Intellectual Property sdelsman@gklaw.com Jessica Franklin, Environmental jfranklin@gklaw.com Rufino Gaytán, Employment rgaytan@gklaw.com Arthur Harrington, Energy & Environmental aharrington@gklaw.com Brett Koeller, Business & Corporate bkoeller@gklaw.com Michael Lokensgard, Real Estate mlokensgard@gklaw.com Carol Muratore, Real Estate cmuratore@gklaw.com Andrew S. Oettinger, Litigation aoettinger@gklaw.com Brian Pierson, Federal Indian & Tribal Indian Nations Team Leader, Lead Contact bpierson@gklaw.com Marlene Prahl, Paralegal mprahl@gklaw.com John Reichert, Banking & Financial Institutions jreichert@gklaw.com Jed Roher, Tax jroher@gklaw.com Christopher Smessaert, Litigation csmessaert@gklaw.com Mike Wittenwyler, Government Relations mwittenwyler@gklaw.com OFFICES IN MILWAUKEE, MADISON, WAUKESHA, GREEN BAY AND APPLETON, WISCONSIN AND WASHINGTON, D.C. WWW GKLAW.COM TEL December 2013 Page 5