Case 1:17-cv RC Document 63 Filed 11/07/18 Page 1 of 33 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Transcription

1 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 1 of 33 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA STATE OF CONNECTICUT and ) MASHANTUCKET PEQUOT TRIBE, ) ) Plaintiffs, ) ) v. ) ) UNITED STATES DEPARTMENT OF ) THE INTERIOR, and RYAN ZINKE, ) SECRETARY OF THE INTERIOR, ) No. 1:17-cv RC ) Defendants, ) ) and ) ) MGM RESORTS GLOBAL DEVELOPMENT, ) LLC, ) ) Intervenor-Defendant. ) ) INTERVENOR-DEFENDANT MGM RESORTS GLOBAL DEVELOPMENT, LLC S OPPOSITION TO PLAINTIFFS MOTION FOR LEAVE TO AMEND Neil K. Roman COVINGTON & BURLING LLP The New York Times Building 620 Eighth Avenue New York, NY Edward H. Rippey Kevin King Thomas Brugato Roger Polack Kendra Mells COVINGTON & BURLING LLP One CityCenter 850 Tenth St. NW Washington, DC Counsel for Intervenor-Defendant MGM Resorts Global Development, LLC

2 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 2 of 33 TABLE OF CONTENTS TABLE OF CONTENTS... ii INTRODUCTION AND SUMMARY OF ARGUMENT... 1 BACKGROUND... 4 ARGUMENT... 6 I. PLAINTIFFS MOTION IS UNTIMELY... 6 II. PLAINTIFFS PROPOSED AMENDED COMPLAINT IS FUTILE AS A MATTER OF LAW A. Proposed Count I Is Futile Because It Fails to State a Viable Arbitraryand-Capricious Claim B. Proposed Count II Is Futile Because It Fails to State a Viable Improper Political-Influence Claim Plaintiffs Allegations of Mere Political Pressure on Interior Are Facially Inadequate Plaintiffs Arguments in Support of Their Political-Influence Claim Are Meritless C. Proposed Count III is Futile and Foreclosed by This Court s Dismissal Order The Procedures Themselves Demonstrate that the Mashantucket Amendments Are Not Compacts The Text and Structure of IGRA s Implementing Regulations and Interior s Guidance Demonstrate that the Amendments Are Not Compacts Plaintiffs Have Not Satisfied the Regulatory Requirements CONCLUSION ii

3 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 3 of 33 TABLE OF AUTHORITIES Page(s) Cases Aera Energy LLC v. Salazar, 642 F.3d 212 (D.C. Cir. 2011)...19 Appalachian Voices v. Chu, 262 F.R.D. 24 (D.D.C. 2009)...2, 9 Arthur v. Maersk, Inc., 434 F.3d 196 (3d Cir. 2006)...6 Ashcroft v. Iqbal, 556 U.S. 662 (2009)...9, 17 Atchinson v. District of Columbia, 73 F.3d 418 (D.C. Cir. 1996)...6 ATX, Inc. v. Dep t. of Trans., 41 F.3d 1522 (D.C. Cir. 1994)...3, 15, 19 Cameron v. Thornburgh, 983 F.2d 253 (D.C. Cir. 1993)...1 Chitimacha Tribe of Louisiana v. Harry L. Laws Co., 690 F.2d 1157 (5th Cir. 1982)...6 Cole v. Boeing Co., 621 F. App x 10 (D.C. Cir. 2015)...9 Cresswell v. Sullivan & Cromwell, 922 F.2d 60 (2d Cir. 1990)...6 D.C. Fed n of Civic Ass ns v. Volpe, 459 F.2d 1231 (D.C. Cir. 1971)...19 DCP Farms v. Yeutter, 957 F.2d 1183 (5th Cir. 1992)...16, 17, 18 Deasy v. Hill, 833 F.2d 38 (4th Cir. 1987)...6 Detroit Int l Bridge Co. v. Gov t of Can., 133 F. Supp. 3d 70 (D.D.C. 2015)...18 iii

4 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 4 of 33 Devon Energy Corp. v. Kempthorne, 551 F.3d 1030 (D.C. Cir. 2008)...19, 20 Doe v. McMillan, 566 F.2d 713 (D.C. Cir. 1977)...7 Firestone v. Firestone, 76 F.3d 1205 (D.C. Cir. 1996)...9 Forest Cty. Potawatomi Cmty. v. United States, 317 F.R.D. 6 (D.D.C. 2015)...16 Gravel v. United States, 408 U.S. 606 (1972)...14 Hajjar-Nejad v. George Washington Univ., 873 F. Supp. 2d 1 (D.D.C. 2011)...6 In re Engle Cases, 767 F.3d 1082 (11th Cir. 2014)...6 In re Lombardo, 755 F.3d 1 (1st Cir. 2014)...6 James Madison Project v. DOJ, 208 F. Supp. 3d 265 (D.D.C. 2016)...1, 7 Key Airlines, Inc. v. Nat l Mediation Bd., 745 F. Supp. 749 (D.D.C. 1990)...1, 8 Kurtz v. United States, No , 2011 WL (D.D.C. June 20, 2011)...9 Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 567 U.S. 209 (2012)...16 Mowrer v. Dep t of Transp., 326 F.R.D. 350 (D.D.C. 2018)...6 Myers v. United States, 272 U.S. 52 (1926)...15 Nat l Sec. Counselors v. C.I.A., 960 F. Supp. 2d 101 (D.D.C. 2013)...2, 7, 9 Onyewuchi v. Gonzalez, 267 F.R.D. 417 (D.D.C. 2010)...9 iv

5 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 5 of 33 Peter Kiewit Sons Co. v. Army Corps of Eng rs, 714 F.2d 163 (D.C. Cir. 1983)...16 Schagticoke Tribal Nation v. Kempthorne, 587 F.3d 132 (2d Cir. 2009) (per curiam)...16 Sherrod v. McHugh, 249 F. Supp. 3d 85 (D.D.C. 2017)...2 Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir. 1981)...3, 16 Wilderness Soc y v. Griles, 824 F.2d 4 (D.C. Cir. 1987)...1 X-Men Sec., Inc. v. Pataki, 196 F.3d 56 (2d Cir. 1999)...15 Statutes 25 U.S.C. 2710(d)(7)(B)(vii) U.S.C. 2710(d)(8)(C)...4, U.S.C. 2719(b)(1)(A)...15 Indian Gaming Regulatory Act... passim Connecticut Public Act , 13 Regulations & Rules 25 C.F.R. Part , C.F.R C.F.R , C.F.R C.F.R , C.F.R , 22, C.F.R C.F.R Federal Rule of Civil Procedure , 6 v

6 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 6 of 33 Other Authorities 56 Fed. Reg. 15,746 (Apr. 17, 1991) Fed. Reg. 17,535 (Apr. 12, 1999) Fed. Reg. 25,484 (June 1, 2018)...4, 10 Cheyenne-Arapaho Return Letter (May 1, 2013)...25 Cheyenne-Arapaho Disapproval Letter (Aug. 1, 2013)...25 Letter from Acting Secretary - Indian Affairs, U.S. Dept. of the Interior, to Hon. Harold Frank, Chairman, Forest County Potawatomi Community (Apr. 25, 2003)...11 Letter from Assistant Secretary - Indian Affairs, U.S. Dept. of the Interior, to Hon. Robert Guenthardt, Chairman, Little River Band of Ottowa Indians (Feb. 9, 1999)...11 Kevin Washburn, Recurring Issues in Indian Gaming Compact Approval, Gaming Law Review and Economics, Vol. 20 No. 5 (2016)...11, 19, 20 Op. Atty. Gen. Ct. No , 1993 WL (Feb. 11, 1993)...23 Op. Atty. Gen. Ct. No , 1994 WL (May 18, 1994)...13 Op. Atty. Gen. Ct. No , 2017 WL (Feb. 1, 2017)...13 vi

7 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 7 of 33 INTRODUCTION AND SUMMARY OF ARGUMENT After this Court issued a 58-page ruling dismissing Plaintiffs complaint, Plaintiffs now seek leave to amend their complaint to assert three new causes of action that could have been asserted when they originally filed the case. The Court should not countenance such tactics and the piecemeal litigation that would result, and should reject Plaintiffs motion for two independent reasons. First, Plaintiffs motion is untimely: it was filed nearly 11 months after Plaintiffs initiated the lawsuit and only after the Court dismissed the original complaint on the merits. The D.C. Circuit has upheld denials of leave to amend because of such undue delay even where motions to dismiss were merely pending. See, e.g., Cameron v. Thornburgh, 983 F.2d 253, 258 (D.C. Cir. 1993) (affirming denial of leave to amend where motion to dismiss had been pending for 15 months even though district court had not yet decided motion); Wilderness Soc y v. Griles, 824 F.2d 4, 19 (D.C. Cir. 1987) (affirming denial of leave to amend where plaintiffs motion occurred more than a year after the filing of their initial complaint and after dispositive motions had been filed and opposed even though court had not yet ruled); see also James Madison Project v. DOJ, 208 F. Supp. 3d 265, 277 (D.D.C. 2016) ( [W]here a defendant has filed a dispositive motion... and plaintiff has opposed it, denial of permission to amend is proper. (alteration and omission in original)). Plaintiffs offer no legitimate explanation for this delay. They concede that their three new legal theories are all based on the same events and the same statutory framework as the original complaint, and could have been raised when the suit was first filed last year (or, at the least, months ago). ECF 60-1 at 7, 9. Plaintiffs made a tactical decision not to present the new claim at an earlier, more appropriate stage of this litigation and should be held to that choice. Key Airlines, Inc. v. Nat l Mediation Bd., 745 F. Supp. 749, 752 (D.D.C. 1990). 1

8 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 8 of 33 Granting Plaintiffs leave to amend their complaint at this stage would allow them a second bite at the apple and encourage parties to engage in piecemeal litigation. The Court should reject Plaintiffs attempt to use Rule 15 to make the complaint a moving target and present theories seriatim in an effort to avoid dismissal. Nat l Sec. Counselors v. C.I.A., 960 F. Supp. 2d 101, 133 (D.D.C. 2013). Second, the Court should deny leave to amend on the additional ground that each count of the proposed complaint is futile. Denial of leave to amend based on futility is warranted if the proposed claim would not survive a motion to dismiss. Appalachian Voices v. Chu, 262 F.R.D. 24, 27 (D.D.C. 2009) (citing James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1099 (D.C. Cir. 1996)). Proposed Count I is futile because it ignores this Court s holding that procedures and compacts are distinct. The sole theory underlying proposed Count I is that Interior acted arbitrarily in failing to approve the amendment to the Mashantucket Pequot Gaming Procedures because Interior permitted a similar amendment to the Mohegan-Connecticut Tribal-State Compact to be deemed approved by operation of law. Proposed Compl. 64. This Court has already explained the difference between compacts and procedures, see ECF 59, and thus Plaintiffs argument that there is no legitimate basis to treat the two amendments differently has already been rejected. See, e.g., Sherrod v. McHugh, 249 F. Supp. 3d 85, 87 (D.D.C. 2017) (denying request for leave to amend where proposed amendments are similar to already-rejected claims or otherwise unlikely to succeed on their face ). Moreover, Plaintiffs claim fails because Interior did not determine the lawfulness of the Mohegan Compact amendments when it allowed those amendments to be deemed approved, and the Mashantucket amendments are not subject to the deemed approval mechanism in any event. 2

9 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 9 of 33 Proposed Count II is futile because it merely alleges that a Senator, a Congressman, and a White House official exerted political pressure by meeting with Interior officials. That allegation does not state a claim under controlling D.C. Circuit precedent, which recognizes that executive and legislative branch officials routinely interact with agency officials and that political pressure is improper only where the content of the pressure upon the [decisionmaker] is designed to force him to decide upon factors not made relevant by Congress in the applicable statute and the decisionmaker in fact does so. Sierra Club v. Costle, 657 F.2d 298, 409 (D.C. Cir. 1981); see also, e.g., ATX, Inc. v. Dep t. of Trans., 41 F.3d 1522, 1528 (D.C. Cir. 1994) ( [W]e have never questioned the authority of congressional representatives to exert pressure.... ). Plaintiffs threadbare allegations of political pressure do not satisfy that standard and ignore that Plaintiffs themselves enlisted the support of federal, state, and local officials to lobby Interior into approving the amendments. Advocacy from all sides was particularly appropriate here given the unprecedented nature of the Mashantucket s amendments and the policy consequences approval of those amendments could have throughout the country. Finally, proposed Count III is futile because it advances an unsubstantiated argument that the amendments to the Mashantucket Procedures are themselves compacts subject to the deemedapproval provisions of the Indian Gaming Regulatory Act (IGRA). This Court already rejected the analogous assertion that the Mashantucket Procedures are a compact, and that holding forecloses Plaintiffs argument. Plaintiffs novel argument also fails on its own terms: the amendments revise the Mashantucket Procedures and so are a discrete category of documents separate from compacts. IGRA s implementing regulations treat compacts and compact amendments separately, but accepting Plaintiffs argument would obliterate that distinction and render significant portions of the regulations surplusage. 3

10 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 10 of 33 BACKGROUND As discussed in the Court s order dismissing this action, ECF 59 at 5-6, the Mashantucket operate Foxwoods, an on-reservation casino governed by IGRA and Secretarial Procedures prescribed by Interior. The Mohegan Tribe, in contrast, operates its Mohegan Sun casino pursuant to a tribal-state compact with Connecticut. In 2017, both Tribes executed similar amendments to their respective gaming documents designed to facilitate operation of an off-reservation, non-igra casino that would be operated by the Tribes jointly-owned commercial entity, MMCT Venture, LLC. The Tribes submitted those amendments to Interior for review on August 2, Proposed Compl. 33. On September 15, 2017, Interior returned the amendments to the Tribes based on the Tribes failure to provide [s]ufficient information upon which to make a decision. Proposed Compl Plaintiffs, as well as the Mohegan, filed suit on November 29, 2017, challenging Interior s non-approval of their amendments. ECF 1. That complaint alleged two legal theories. Count I alleged that the deemed approval provisions of IGRA, 25 U.S.C. 2710(d)(8)(C) and 25 C.F.R , apply to both sets of amendments and mandate that they be deemed approved. Count II similarly alleged that the deemed approval requirements of IGRA impose a duty on Interior to publish a notice of deemed approval for both Tribes amendments. On February 5, 2018, Interior moved to dismiss the Mashantucket s claims on the grounds that the Mashantucket Procedures are not a compact and that therefore IGRA s deemed approval provisions for compacts are inapplicable. ECF 18. Subsequently, on June 1, 2018, Interior published a deemed approval notice regarding the Mohegan Compact amendment, stating that the amendment is considered to have been approved, but only to the extent the Amendment is consistent with IGRA. 83 Fed. Reg. 25,484 4

11 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 11 of 33 (June 1, 2018). At the same time, Interior s Bureau of Indian Affairs issued a statement indicating that Interior issued the deemed approval notice without determining whether the Mohegan compact amendment is actually consistent with the statutory framework of IGRA. Andrew Westney, BIA Says Mohegan-Conn. Gambling Deal Change Is In Effect, Law360 (May 31, 2018) (attached as Ex. A). 1 After exhaustive briefing by the parties, the Court granted Interior motion to dismiss on September 29, 2018 in a 58-page opinion discussing the differences between the amendment processes for compacts and procedures. The Court concluded that the deemed approval provisions of IGRA are inapplicable to the Mashantucket Procedures and the proposed amendments to those procedures. ECF 59. Rather than appeal that ruling, Plaintiffs elected, on October 17, 2018, to seek leave to amend their complaint to assert three additional legal theories. As noted, two of those theories echo arguments this Court has already rejected: Proposed Count I argues that Interior unlawfully treated the Mohegan Compact amendment differently from the Mashantucket Procedures amendments, compare Proposed Compl. 64 with ECF 59 at 39, 44; similarly, proposed Count III argues that the Mashantucket Procedures amendments are themselves compacts, compare Proposed Compl. 78 with ECF 59 at Plaintiffs also allege, in proposed Count II, that pressure allegedly applied by a Senator, a Congressman, and a White House official in three meetings and two phone calls over a 45-day period caused unspecified taint in the administrative process. Proposed Compl Available at The exhibits to this brief are attached to the supporting declaration of Thomas Brugato. 5

12 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 12 of 33 ARGUMENT I. PLAINTIFFS MOTION IS UNTIMELY. Plaintiffs motion for leave to amend their complaint should be denied on the basis of undue delay. Atchinson v. District of Columbia, 73 F.3d 418, 425 (D.C. Cir. 1996); see also, e.g., Mowrer v. Dep t of Transp., 326 F.R.D. 350, 352 (D.D.C. 2018) ( Undue delay in adding claims is a sufficient reason for denying leave to amend. (citation and quotation marks omitted)). 2 Plaintiffs did not seek leave until October 17, 2018, nearly 11 months after they filed their original complaint, more than a year after Interior s return of the Mashantucket amendments, and only after the Court dismissed Plaintiffs original complaint on the merits. Although mere chronological delay may not be sufficient to deny leave to amend, Plaintiffs sought leave to amend only after the Court dismissed their Complaint. As noted, the D.C. Circuit has held that district courts appropriately deny motions for leave to amend even where a motion to dismiss has been pending for many months. See supra, at 1; see also, e.g., Hajjar-Nejad v. 2 Citing a district court case, Plaintiffs argue that the burden is on the opposing party to show that there is reason to deny leave. Mot. at 6. However, the D.C. Circuit has not ruled on the issue, and the overwhelming weight of circuit authority holds that the burden is on the moving party to explain any significant delay. In re Lombardo, 755 F.3d 1, 3 4 (1st Cir. 2014) (noting that when considerable time has elapsed between the filing of the complaint and the motion to amend, the movant has [at the very least] the burden of showing some valid reason for his neglect and delay (alteration in original) (quotation marks omitted)); Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 72 (2d Cir. 1990) ( The burden is on the party who wishes to amend to provide a satisfactory explanation for the delay. ); Arthur v. Maersk, Inc., 434 F.3d 196, 204 (3d Cir. 2006) ( [T]he question of undue delay requires that we focus on the movant s reasons for not amending sooner. ); Deasy v. Hill, 833 F.2d 38, 41 (4th Cir. 1987) ( Plaintiff failed to offer to the trial court, and does not offer here, any reason for his delay.... The burden rests primarily upon the plaintiff to amend his complaint, not upon the defendant to anticipate a new claim. ); Chitimacha Tribe of Louisiana v. Harry L. Laws Co., 690 F.2d 1157, 1163 (5th Cir. 1982) ( Where there has been an apparent lack of diligence, the burden shifts to the movant to prove that the delay was due to excusable neglect. (citations omitted)); In re Engle Cases, 767 F.3d 1082, 1119 (11th Cir. 2014) ( Plaintiffs counsel suggest that it was the defendants burden to show why their request for leave to amend shouldn't have been granted. That is wrong. The party seeking leave to amend under Rule 15 bears the burden of establishing his entitlement to it particularly where there has been such a long and seemingly unjustified delay. ). 6

13 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 13 of 33 George Washington Univ., 873 F. Supp. 2d 1, 12 (D.D.C. 2011) (denying motion for leave to amend filed one year and five months after the commencement of this action and after a full round of dispositive motions had already been briefed and submitted for the Court s consideration ). Here, the rationale for denying leave to amend is even stronger because the Court has already ruled on the motion to dismiss. See, e.g., Nat l Sec. Counselors, 960 F. Supp. 2d at 135 (waiting until after the Court ruled on the motion to dismiss to seek such an amendment, when the plaintiff had ample opportunity to amend the complaint after the motion to dismiss was filed, warranted finding of undue delay). Plaintiffs provide no sound reason for [] failure to seek amendment earlier. Doe v. McMillan, 566 F.2d 713, 720 (D.C. Cir. 1977); see also James Madison Project, 208 F. Supp. 3d at 277 ( Whether there has been an unexplained delay in pleading previously-known allegations is another important consideration. (cleaned up)). Plaintiffs point only to two purportedly new factual allegations to justify their delay in seeking leave to amend, neither of which justifies their delay here. First, Plaintiffs advance the mistaken argument that it was not until their original complaint was dismissed that Plaintiffs became aware of the need to amend their complaint to account for the Federal Defendants new reading of IGRA. Mot. at 11. Defendants, however, made their position clear when they filed their motion to dismiss on February 5, 2018, more than eight months before Plaintiffs sought leave to amend. ECF Moreover, this Court s opinion makes clear that Plaintiffs never should have proceeded under the mistaken assumption that the Mashantucket 3 That position was not new, as Plaintiffs contend. Rather, Interior made clear in an internal dated September 12, 2017 that the amendments to the Mashantucket procedures ha[ve] no deadline because they amend procedures, not a compact. ECF Given Plaintiffs allegation that they were in regular contact with Interior officials during the same period, see Proposed Compl , Interior s position could not have come as a surprise to Plaintiffs. 7

14 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 14 of 33 Procedures were a compact subject to the deemed approval provisions of IGRA: IGRA unambiguously does not apply the same approval timing requirements to secretarial procedures as it does to tribal-state compacts. ECF 59 at 35. Second, although Plaintiffs vaguely state that some of the facts giving rise to Count II... were not discovered until after the lawsuit had been filed, Mot. at 11, they do not identify what those facts are. Instead, Plaintiffs candidly admit that proposed Count II relies on many of the same facts that Plaintiffs have already set forth in this litigation, citing a filing made by Plaintiffs on March 5, Mot. at 8 (citing ECF 27). Another filing made by Plaintiffs that day contains many of the same allegations as are set forth in support of Count II of Plaintiffs proposed amended complaint, demonstrating that Plaintiffs could have amended their complaint to assert proposed Count II by March 5, 2018 at the latest. ECF 23 at 5. Moreover, it is noteworthy that Plaintiffs raised an argument identical to Count I of the Proposed Complaint in June 2018, four months before moving for leave to amend. In a status report filed June 18, 2018, Plaintiffs argued that in light of Defendants recent publication of approval of the amendments to the Mohegan compact in the Federal Register, it would be arbitrary and capricious for the Defendants to treat differently a compact amendment that is substantively identical in all material respects. ECF 41 at 3. Plaintiffs acknowledged that they could have amended their complaint to state such a claim, but nevertheless determined that it was in Plaintiffs interest to refrain from doing so. Id. at 3-4. Plaintiffs must bear the consequences of that tactical decision not to present the new claim at an earlier, more appropriate stage of this litigation. Key Airlines, 745 F. Supp. at Plaintiffs do not point to the June 1, 2018 publication of the deemed approval of the Mohegan Compact amendment as an intervening development, for good reason. As is explained below, and 8

15 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 15 of 33 Accordingly, because Plaintiffs could have brought these claims many months ago, and could have brought at least proposed Counts II and III as part of their original lawsuit, Plaintiffs request should be dismissed as untimely: it is abundantly clear that Plaintiffs were fully aware of the information underlying [the new] claims long before seeking leave to amend. Onyewuchi v. Gonzalez, 267 F.R.D. 417, 421 (D.D.C. 2010); see also, e.g., Nat'l Sec. Counselors., 960 F. Supp. 2d at 134 (denying proposed amended complaint because plaintiff was aware of the facts underlying the amendment approximately three months before filing the original complaint and approximately four months before filing the First Amended Complaint. ). In these circumstances, Plaintiffs motion to amend is little more than an attempt to evade the Court s ruling on the motion to dismiss and should be denied on that basis. See Kurtz v. United States, No , 2011 WL , at *1 n.1 (D.D.C. June 20, 2011). II. PLAINTIFFS PROPOSED AMENDED COMPLAINT IS FUTILE AS A MATTER OF LAW. A court may deny leave to amend where the party s proposed amendment is futile. See Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996). Denial of leave to amend based on futility is warranted if the proposed claim would not survive a motion to dismiss. Appalachian Voices v. Chu, 262 F.R.D. 24, 27 (D.D.C. 2009) (citing James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1099 (D.C. Cir. 1996)); see also, e.g., Cole v. Boeing Co., 621 F. App x 10, 11 (D.C. Cir. 2015) (courts often deny amendments on this basis). To survive a motion to dismiss, the amended complaint must state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (cleaned up). as the Court has already ruled, that publication deems approved a different type of document under IGRA a compact, not a set of secretarial procedures and so has no bearing on Plaintiffs claims here. See infra, Part II.A. In any event, more than five and a half months passed between that event and Plaintiffs request for leave to amend. 9

16 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 16 of 33 Here, each count Plaintiffs propose to assert is futile. A. Proposed Count I Is Futile Because It Fails to State a Viable Arbitrary-and- Capricious Claim. Proposed Count I alleges that Interior s failure to approve the amendments to the Mashantucket Procedures was arbitrary and capricious. Proposed Compl The proposed complaint provides only one allegation as to why Defendants action was unlawful: there is no legitimate basis to treat as approved the identical Mohegan Compact and not approve the Tribal- State Agreement. Treating agreements which function identically in the real world different is the very definition of arbitrary and capricious. Proposed Compl. 64. This argument is foreclosed by the Court s ruling that it was reasonable for Congress to impose strict deadlines on the Secretary s review of a completed tribal-state compact, while providing the Secretary with more time and discretion relating to procedures. ECF 59 at The Court also observed that [t]he Secretary s divergent responsibilities with respect to tribalstate compacts and secretarial procedures may justify divergent approval processes. ECF 59 at 46. That alone renders proposed Count I futile: these are two different types of documents, subject to two different review processes. In addition, Plaintiffs ignore that the Mohegan Compact amendment was only deemed approved, meaning that the amendment is effective only to the extent the [amendment] is consistent with the provisions of [IGRA]. 25 U.S.C. 2710(d)(8)(C); see also 83 Fed. Reg. 25,484 (June 1, 2018) (Mohegan amendment approved only to the extent the Amendment is consistent with IGRA ). The fact that the Mohegan amendment is only approved to the extent that it is consistent with IGRA leaves unclear whether, and to what extent, it has any legal effect. Indeed, the Bureau of Indian Affairs explained that Interior allowed the Mohegan amendment to be deemed approved merely [t]o facilitate a more timely resolution of these complicated issues, 10

17 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 17 of 33 and without determining whether the Mohegan compact amendment is actually consistent with the statutory framework of IGRA. Westney, Ex. A, supra (emphasis added). 5 Because the Mohegan approval was, in fact, not an approval at all, there is no plausible basis for Plaintiffs disparatetreatment argument. Plaintiffs argument is also futile because Interior had good reason to treat the Mohegan and Mashantucket amendments differently. In contrast to compacts and compact amendments, there is no equivalent deemed approval provision applicable to gaming procedures and procedures amendments. ECF 59 at 51 & n.35, 56. Procedures and procedures amendments are prescribe[d] by the Secretary, 25 U.S.C. 2710(d)(7)(B)(vii), and must be consistent with applicable state and federal laws, 25 C.F.R (a)(4)-(7), (b)(4)-(7). As a result, Interior cannot approve procedures or procedures amendments without affirmatively determining whether they are lawful a step Interior did not take in allowing the Mohegan compact amendment 5 Interior has repeatedly taken the same approach in other cases, allowing tribal-state compacts or compact amendments to be deemed approved without reaching a final determination regarding their lawfulness. See, e.g., Letter from Assistant Secretary - Indian Affairs, U.S. Dept. of the Interior, to Hon. Robert Guenthardt, Chairman, Little River Band of Ottowa Indians (Feb. 9, 1999), (allowing compact to be deemed approved by operation of law because we are particularly concerned with the legality under IGRA of provisions of the compact ) (attached as Ex. G); Letter from Acting Secretary - Indian Affairs, U.S. Dept. of the Interior, to Hon. Harold Frank, Chairman, Forest County Potawatomi Community (Apr. 25, 2003), (allowing compact amendment to take effect without Secretarial action due to unsettled issue regarding amendment s legality) (attached as Ex. H). Indeed, a former Assistant Secretary for Indian Affairs has noted that Interior often uses deemed approvals to avoid providing a stamp of approval to terms in a compact that are problematic or potentially problematic. The deemed approval approach allows the parties to move forward with Class III gaming, but it preserves the legal issue for a potential showdown in the courts or arbitration proceeding at a later date. As a practical matter, the deemed approval approach allows the compact to take effect, but withholds the Department s endorsement of problematic terms. Kevin Washburn, Recurring Issues in Indian Gaming Compact Approval, Gaming Law Review and Economics, Vol. 20 No. 5, at 391 (2016), available at 11

18 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 18 of 33 to be deemed approved. Because the Mashantucket and Mohegan amendments seek to use IGRA s procedures in an unprecedented way to authorize a commercial casino located on nontribal lands Interior had every reason to tread more carefully in analyzing the Mashantucket amendments, for which a non-binding deemed approval was not an option. 6 Anticipating this possibility, the Connecticut Legislature made clear that both the Mashantucket and Mohegan amendments must be approved by Interior for the East Windsor casino to be authorized. In Public Act 17-89, the Connecticut Legislature provided that MMCT s casino is only authorized when the amendments to the Mashantucket Pequot procedures, the Mashantucket Pequot memorandum of understanding, the Mohegan compact and the Mohegan memorandum of understanding are approved or deemed approved by the Secretary of the United States Department of the Interior pursuant to the federal Indian Gaming Regulatory Act. Pub. Act (c)(2) (emphasis added). Requiring all of these documents to be amended before MMCT may engage in gaming was necessary for Connecticut to reduce the risk of violating the exclusivity provisions contained in each Tribe s gaming documents, because any such violation would terminate each Tribe s obligation to make revenue-sharing payments to the State. See ECF 11-1 at 4-5 & n.5, 10 (describing exclusivity scheme and Connecticut Attorney General s warning of risks to State s revenues if both sets of gaming documents are not amended). In short, the State structured Public 6 Kathryn Rand, who serves as Dean of the University of North Dakota School of Law and codirector of the Institute for the Study of Tribal Gaming Law and Policy, and who is not affiliated with MGM or the Connecticut tribes, recently explained that the Tribes amendments involve an unusual situation and are pushing the bounds of IGRA. Nick Juliano, Interior Rejected Staff Advice When Scuttling Tribes Casino, Politico (Apr. 22, 2018), (cited in Proposed Complaint, ECF ). The Mohegan Tribe s own representative acknowledged the same, indicating at a hearing before the Connecticut legislature that the Tribes amendments are clearly unique. Connecticut General Assembly, Hrg. Before the Public Safety and Security Committee (Mar. 9, 2017) (statement of George Skibine, counsel for Mohegan Tribe), available at (attached as Ex. D). 12

19 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 19 of 33 Act such that it would not move forward with approval of only one Tribe s amendments, because that would have resulted in termination of the other Tribe s revenue-sharing obligations. Connecticut was well aware of the possibility that amendments to the Mashantucket Procedures might be treated differently than amendments to the Mohegan Compact, as the Connecticut Attorney General repeatedly acknowledged the two documents were distinct gaming approvals under IGRA. ECF 30-2 at 6-7 (collecting Attorney General opinions); see also infra at 23 n.12 (discussing 1993 Attorney General opinion). As the Attorney General explained, the unique history and nature of the Mashantucket Pequot Gaming Procedures make them very different from the Mohegan Compact. Op. Atty. Gen. Ct. No , 1994 WL , at *6 (May 18, 1994). Indeed, in 2017 the Attorney General acknowledged that Interior had never approved the Mashantucket memorandum of understanding, which Plaintiffs now seek to amend, and so any Mashantucket amendments would not be similarly situated to any Mohegan amendments. Op. Atty. Gen. Ct. No , 2017 WL , at *5 (Feb. 1, 2017) (noting that approval of the original Mohegan memorandum of understanding is not conclusive evidence that [Interior] deems the Mashantucket MOU valid notwithstanding the fact that it was never submitted to and formally approved by the Department ). Accordingly, the Tribes amendments themselves incorporate this cross-dependency and pursuant to that design the Mohegan Compact amendment is not yet legally effective because its effective date hinges on approval of the Mashantucket amendments. Consistent with the structure of Public Act 17-89, both the Mohegan and the Mashantucket amendments provide that they will become effective only when conditions are satisfied, including approval of the other tribe s amendments. Thus, the Mohegan amendment provides that it shall become effective after [t]his Agreement and the Mashantucket Pequot Agreement are approved or deemed approved by the 13

20 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 20 of 33 United States Secretary of the Interior pursuant to [IGRA] and its implementing regulations and notice thereof is published in the Federal Register. ECF 9-7 at 3-4 (Mohegan amendment); see also ECF 60-2 at (similar condition in Mashantucket amendments). These cross-dependency provisions provide yet another reason why Interior could reasonably deem approve the Mohegan Compact amendments but not approve the Mashantucket amendments: approval of the latter amendments is key to the effectiveness of the entire scheme, and the automatic deemed approval of the Mohegan amendments has no legal consequence of itself by the amendments own terms. B. Proposed Count II Is Futile Because It Fails to State a Viable Improper Political-Influence Claim. To state a claim for improper political influence, Plaintiffs must do more than allege that members of Congress and White House staff expressed their views to the Interior Department they must set forth factual allegations demonstrating that any advocacy (which Plaintiffs label pressure ) was designed to force Interior to consider impermissible factors and that Interior in fact relied on those factors. Plaintiffs fail to make such allegations. 1. Plaintiffs Allegations of Mere Political Pressure on Interior Are Facially Inadequate. The Supreme Court has long recognized that Members of Congress are constantly in touch with the Executive Branch of the Government and with administrative agencies they may cajole, and exhort with respect to the administration of a federal statute. Gravel v. United States, 408 U.S. 606, 625 (1972). Likewise, [t]he ordinary duties of officers prescribed by statute come under the general administrative control of the President by virtue of the general grant to him of the executive power, and he may properly supervise and guide their construction of the statutes under 14

21 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 21 of 33 which they act. Myers v. United States, 272 U.S. 52, 135 (1926). The D.C. Circuit has also emphasized that political pressure is a core feature of our representative system of government. See, e.g., ATX, 41 F.3d at 1528 ( [W]e have never questioned the authority of congressional representatives to exert pressure.... ). 7 The justification for inter- and intra-branch advocacy is particularly strong where, as here, an agency is considering a matter of widespread public importance. The Mashantucket amendments are the first of their kind and are the product of a legislative process that included numerous public hearings and the enactment of two state statutes both of which were designed to affect the interstate flow of gaming dollars. See, e.g., ECF 11-1 at Every branch of government has acknowledged the need for public input with respect to IGRA casino gaming applications. Interior solicited public comment on the original Mashantucket Procedures from any [i]nterested parties. 56 Fed. Reg. 15,746 (Apr. 17, 1991). Congress has likewise directed that Interior may take new lands into trust for the purpose of tribal gaming establishment[s] only after considering the interests of the surrounding community and the views of the Governor of the State in which gaming activity is to be conducted. 25 U.S.C. 2719(b)(1)(A). And the courts including this Court have held that third parties whose commercial and property interests are affected by a gaming application have standing to advocate for their views. See ECF 59 at 15-33; Match-E-Be- 7 Indeed, courts recognize that political activity of members of the House and Senate is protected by the First Amendment: Members of Congress are constantly in touch with the Executive Branch of the Government and with administrative agencies they may cajole, and exhort with respect to the administration of a federal statute.... Although these types of communications are political rather than legislative in nature,... they are entirely legitimate acts, performed in the legislator's official capacity, and are protected by the First Amendment. X-Men Sec., Inc. v. Pataki, 196 F.3d 56, 69 (2d Cir. 1999) (citations omitted). 15

22 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 22 of 33 Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 567 U.S. 209, (2012) (authorizing neighbors to challenge Interior s approval of a proposed tribal casino); Forest Cty. Potawatomi Cmty. v. United States, 317 F.R.D. 6, (D.D.C. 2015) (same with respect to competing tribe). Pressure, in short, is simply the Plaintiffs label for advocacy that is permissible in the vast majority of circumstances. In light of these fundamental principles, the D.C. Circuit has made clear that mere Congressional or White House advocacy does not by itself provide a basis for invalidating an agency decision. To the contrary, such pressure is improper only where: (1) the content of the pressure upon the [decision-maker] is designed to force him to decide upon factors not made relevant by Congress in the applicable statute and (2) the [decision-maker s] determination [is] affected by those extraneous considerations. Sierra Club, 657 F.2d at 409 (citation omitted); see also, e.g., Peter Kiewit Sons Co. v. Army Corps of Eng rs, 714 F.2d 163, 170 (D.C. Cir. 1983) ( The test is whether extraneous factors intruded into the calculus of consideration of the individual decisionmaker. ); Schagticoke Tribal Nation v. Kempthorne, 587 F.3d 132, 134 (2d Cir. 2009) (per curiam) ( To support a claim of improper political influence on a federal administrative agency, there must be some showing that the political pressure was intended to and did cause the agency s action to be influenced by factors not relevant under the controlling statute. ). Thus, an agency s patient audience to a member of Congress will not by itself constitute the injection of an extraneous factor. Nor would a simple plea for more effective enforcement of the law, including expressing a view as to the legality or illegality of a potential agency action. DCP Farms v. Yeutter, 957 F.2d 1183, 1188 (5th Cir. 1992). 16

23 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 23 of 33 Plaintiffs factual allegations fail to state a claim under this controlling standard. Plaintiffs merely allege the existence of political pressure, not that such political pressure urged consideration of improper factors or that Interior in fact considered improper factors. Specifically, Plaintiffs make four allegations of pressure : (1) that Senator Dean Heller of Nevada directly pressured Secretary [Ryan] Zinke at a July 30, 2017 meeting, Proposed Compl. 42; (2) that Representative Mark Amodei of Nevada met with Associate Deputy Interior Secretary James Cason on September 13, 2017, during which he pressured the Department to change its position, id. 46; (3) that Senator Heller called Cason and Secretary Zinke on September 14 and 15, respectively, to further pressure Interior, id. 47, 49; and (4) that Secretary Zinke met with White House official Rick Dearborn who exerting Executive-level pressure, requested the Department to not approve the Mashantucket amendment, id. 48. Plaintiffs then allege that Interior returned the Mashantucket amendments [i]n response to the extraordinary political pressure. Id. 50. These allegations are insufficient on their face: nowhere do Plaintiffs even attempt to allege (much less plausibly allege) that anyone urged Interior to consider improper factors in evaluating the Mashantucket amendments. 8 As in DCP Farms, meetings with Congressional representatives relating to agency decisionmaking do not amount to improper political interference, and courts are cautious in reading extraneous factors too broadly, lest they impair agency flexibility in dealing with Congress. 957 F.2d at Moreover, as this Court has observed, Interior has significant 8 Although Plaintiffs proposed complaint contains the conclusory allegation that Interior s actions were motivated by improper and undue political influences, pressures, and considerations, Proposed Compl. 70, Plaintiffs nowhere explain what those considerations were. At most, this allegation is a [t]hreadbare recital[] of the elements of a cause of action, supported by merely conclusory statements that do[es] not suffice to withstand a motion to dismiss. Iqbal, 556 U.S. at 678; see also id. at 679 ( [W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged but it has not show[n] that the pleader is entitled to relief. (second alteration in original)). 17

24 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 24 of 33 discretion over whether to approve amendments to gaming procedures. See ECF 59 at (Congress has provided the Secretary with discretion to draft procedures consistent with state law, the IGRA, existing proposals, and the Secretary s obligations to the tribes ); see also 25 C.F.R (a). Indeed, Plaintiffs own conduct demonstrates that mere political advocacy is commonplace and proper. Plaintiffs allies including federal, state, and local officials all contacted Interior pressuring the Secretary to approve the amendments. For example, Connecticut state legislators wrote to Secretary Zinke urg[ing] him to expeditiously review and approve the amendments. Letter from Conn. Legislators Sen. Catherine A. Osten, Sen. Paul Formica, Rep. Kevin Ryan, and Rep. Mike France to Secretary Ryan Zinke (Aug. 11, 2017), ECF Likewise, East Windsor officials wrote the Secretary to urge [him] to approve the amendments. Letter from East Windsor, Conn. Board of Selectman to Secretary Ryan Zinke (Aug. 14, 2017) (attached as Ex. B). Shortly after the Secretary issued his September 15 decision, Senator Blumenthal, Senator Murphy, and Representative Courtney wrote the Secretary urg[ing] him to approve the Tribe s amendments and arguing that Interior s decision posed serious legal and regulatory questions. Letter from Sen. Richard Blumenthal, Sen. Christopher Murphy, and Rep. Joe Courtney to Secretary Ryan Zinke, at 3 (Nov. 2, 2017) (attached as Ex. C). That letter followed a meeting between Senator Blumenthal, Senator Murphy, Representative Courtney, Associate Deputy Secretary James Cason, and other Interior staff the week of October 23, 2017, during which the elected officials expressed their concerns regarding Interior s September 15, 2017 decision. Id. at 1. In 9 The Court may take judicial notice of these letters, which Intervenor-Defendant obtained from Interior through a FOIA request, as official government documents sent from local, state, and federal officials to Interior. See, e.g., Detroit Int l Bridge Co. v. Gov t of Can., 133 F. Supp. 3d 70, 85 (D.D.C. 2015). 18

25 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 25 of 33 short, if mere political pressure were improper, Plaintiffs own actions would preclude Interior from approving the Mashantucket amendments. See generally Kevin Washburn, Recurring Issues in Indian Gaming Compact Approval, Gaming Law Review and Economics, Vol. 20 No. 5, at 391 (2016) (observing that powerful external political forces are often brought to bear to discourage the Department from issuing disapproval ) Plaintiffs Arguments in Support of Their Political-Influence Claim Are Meritless. Plaintiffs arguments in support of their political-influence claim fail for two reasons. First, Plaintiffs cite no authority that supports their claim. Two of the three cases on which Plaintiffs rely involved quasi-judicial proceedings, in which Congressional pressure is of heightened concern and even an appearance of bias is improper. ATX, Inc., 41 F.3d at 1527; Aera Energy LLC v. Salazar, 642 F.3d 212 (D.C. Cir. 2011). The Mashantucket amendments were not evaluated in a quasi-judicial proceeding before an administrative law judge on a formal evidentiary record, so these cases are inapposite. The third case, Volpe, adopts the standard that forecloses Plaintiffs claim here: Congressional and White House advocacy is improper only if the representative advocates for, and the decisionmaker took into account[,] considerations that Congress could not have intended to make relevant. D.C. Fed n of Civic Ass ns v. Volpe, 459 F.2d 1231, 1247 (D.C. Cir. 1971) (quotation marks omitted). In that case, a Congressman threaten[ed] to withhold money unless the Secretary changed course, Aera Energy, 642 F.3d at 220; no such allegation is present here. Second, Plaintiffs wrongly suggest that improper political pressure can be inferred because the Department abruptly reversed over 17 months of consistent assurances to the Tribes from 10 Available at 19

26 Case 1:17-cv RC Document 63 Filed 11/07/18 Page 26 of 33 Associate Deputy Secretary Cason and unnamed Department officials that the amendment would be approved. Proposed Compl. 30, 35-37, 40, 44, 50. As an initial matter, the supposed assurances were made by subordinate officials whose views, standing alone, did not bind the Department. See, e.g., Devon Energy Corp. v. Kempthorne, 551 F.3d 1030, 1040 (D.C. Cir. 2008) (explaining that a definitive and binding statement on behalf of the agency must come from a source with the authority to bind the agency, and collecting cases where letters, s, and other assurances from lower-level officials were held to be not binding); see also Washburn, Recurring Issues in Indian Gaming Compact Approval, at 390 (noting that while Interior provides informal guidance, the gaming staff at the Department usually will decline to issue any sort of pre-approval in deference to the fact that they are not the final decision makers ). Moreover, the assurances were nothing of the sort. The only two written assurances cited by Plaintiffs are two 2016 and 2017 technical assistance letters from Interior. The 2016 letter made clear that it should not be construed as[] a preliminary decision or advisory opinion regarding compacts or procedures that are not formally submitted to the Department for review and approval. ECF Far from signaling approval of the proposed amendment, the technical assistance letter merely stated the obvious: that the proposed amendment, if approved, would mean that the proposed MMCT casino would not violate the Tribe s exclusivity arrangement. Id. The same is true of the 2017 letter. ECF That letter similarly noted that [t]he Department does not provide preliminary decisions or advisory opinions regarding compacts, secretarial procedures, or amendments to compacts or procedures, and so neither it nor the previous letter should be construed as preliminary decisions or advisory opinions. In addition, the 20