UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

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1 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 1 of 35 NO UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT CHEMEHUEVI INDIAN TRIBE and CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS, Plaintiffs-Appellants, v. EDMUND G. BROWN, Jr., Governor of California; STATE OF CALIFORNIA, Defendants-Appellees, On Appeal from the United States District Court For The Central District of California, Riverside Case No. 5:16-cv JFW-MRW The Honorable John F. Walter APPELLANTS REPLY BRIEF Lester J. Marston RAPPORT AND MARSTON 405 West Perkins Street Ukiah, California Tel. (707) Fax. (707) Attorney for Plaintiffs-Appellants

2 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 2 of 35 TABLE OF CONTENTS INTRODUCTION The State Failed to Properly Apply the Rules of Statutory Construction, Failed to Show that a Termination Provision Is a Proper Subject of Negotiation, and Failed to Demonstrate that its Interpretation Is Consistent with the Supreme Court s Decision in Bay Mills The State Failed to Demonstrate that its Interpretation of the IGRA Is Consistent with the Intent of Congress There Is No Agency Interpretation of the IGRA to Which this Court Could Afford Deference Under Chevron or Skidmore The Indian Canons of Construction Apply to the Court s Interpretation of the IGRA in this Case CONCLUSION...29 i

3 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 3 of 35 TABLE OF AUTHORITIES Federal Cases Artichoke Joe s Cal. Grand Casino v. Norton, 353 F.3d 712 (9th Cir. 2003)... 4 Big Lagoon Rancheria v. California, 759 F. Supp. 2d 1149 (N.D. Cal. 2010)...13 Brown v. Gardner, 513 U.S. 115 (1994)... 7 Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837 (1984)... passim Colorado River Indian Tribes v. Nat l Indian Gaming Comm n, 383 F. Supp. 2d 123 (D.C. Cir. 2005)...13 Confederated Tribes of Chehalis Indian Reservation v. Washington, 96 F.3d 334 (9th Cir. 1996)... 25, 26 Crow Tribal Hous. Auth. v. United States HUD, 781 F.3d 1095 (9th Cir. 2015)...23 Flandreau Santee Tribe v. Gerlach, 2017 U.S. Dist. LEXIS (D.S.D. 2017)... passim Gaming Corp. of Am. v. Dorsey & Whitney, 88 F.3d 536 (8th Cir. 1996)...9, 13 In re Indian Gaming Related Cases, 331 F.3d 1094 (9th Cir. 2003)... 13, 17 Montana v. Blackfeet Tribe of Indians, 471 U.S. 759 (1985)...24 Pueblo of Sandia v. Babbitt, 47 F. Supp. 2d 49 (D.D.C. 1999)...21 Rancheria v. Jewell, 776 F.3d 706 (9th Cir. 2015)...2, 25 Rincon Band of Luiseno Mission Indians of the Rincon Reservation v. Schwarzenegger, 602 F.3d 1019 (9th Cir. 2010)...13 Rumsey Indian Rancheria of Wintun Indians v. Wilson, 64 F.3d 1250 (9th Cir. 1994)...4, 5 Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996)...20 Skidmore v. Swift & Co., 323 U.S. 134 (1944)... passim United States v. Mead Corp., 533 U.S. 218 (2001)...23 ii

4 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 4 of 35 Williams v. Babbitt, 115 F.3d 657 (9th Cir. 1997)...24 United States Codes 25 U.S.C passim 25 U.S.C , 12, U.S.C passim Regulations 25 C.F.R C.F.R C.F.R C.F.R Other Authorities Black s Law Dictionary 984 (5th ed. 1979)... 5 S. Rep. No (1988)... 4 iii

5 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 5 of 35 INTRODUCTION In response to the Appellant Tribes ( Tribes ) detailed discussion of the Indian Gaming Regulatory Act, 25 U.S.C et. seq. ( IGRA ), its legislative history, and the court decisions interpreting the IGRA, the State of California and Governor Brown ( State ) dismiss the facts underlying the Tribes claims as irrelevant and deem citation to legal authority in support of the State s arguments as largely unnecessary. Rather than interpret the IGRA in accordance with the rules of statutory construction established by this Court, the State urges the Court to adopt a reasonable or common sense interpretation of the statute, a standard that has no basis in the law. The State s strategy is understandable. Not only has the central issue in this case not been addressed by any court (other than the District Court), it has not been addressed by the Department of the Interior, the agency that is primarily responsible for implementation of the IGRA, in either formal opinions or lower level administrative decisions that are entitled to deference by this Court. Interpreting the IGRA broadly is easier than engaging in the necessary, detailed analysis of the applicable law. Dismissing the relevance of the facts underlying the Tribes claims removes the incentive for coming to terms with the impact that the termination provision ( Termination Provision ) in the Tribes compacts has on the Tribes ability to conduct gaming. 1

6 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 6 of 35 The Tribes urge the Court to resist the State s invitation to accept its superficial analysis. The facts of this case reveal the need for a detailed examination of the IGRA, applying the rules of statutory construction developed by this Court and the IGRA s explicitly stated purposes in the context of the Tribes groundbreaking claims. This brief will focus on four aspects of the State s Answering Brief. First, the State failed to properly apply the rules of statutory construction to the question of whether the Termination Provision runs contrary to the plain wording of the IGRA and failed to show that a termination provision is a proper subject of negotiation under the IGRA. Second, the State s discussion of Congress s purposes in enacting the IGRA failed to demonstrate how those purposes are not frustrated by the Termination Provision. Third, the State failed to address the cases cited by the Tribes that reveal that there are no agency interpretations applicable to the Tribes claims that are entitled to Chevron or Skidmore deference. Finally, the single case cited by the State in support of its argument that the Indian canons of construction ( Indian canons ) do not apply in this case, Rancheria v. Jewell, 776 F.3d 706 (9th Cir. 2015) does not provide a basis for refusing to apply the Indian canons and interpret the IGRA in favor of the Tribes. 2

7 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 7 of The State Failed to Properly Apply the Rules of Statutory Construction, Failed to Show that a Termination Provision Is a Proper Subject of Negotiation, and Failed to Demonstrate that its Interpretation Is Consistent with the Supreme Court s Decision in Bay Mills. In their Opening Brief, the Tribes argued that the Termination Provision is invalid because: (1) it conflicts with the plain wording of 25 U.S.C. 2710(d)(1), which allows a tribe to engage in any gaming that the State authorizes under state law; and (2) it is not a proper subject of negotiation under 25 U.S.C. 2710(d)(3)(c), since a Termination Provision is neither a standard nor a subject directly related to the operation of gaming activities. The Tribes demonstrated that 25 U.S.C. 2710(d)(1) is clear and unambiguous. It gives the Tribes the unconditional right to engage in gaming activities, provided that the Tribes have enacted a gaming ordinance, entered into a compact that authorizes the gaming, and the state permits the gaming under state law. Since the Tribes meet all three of these requirements, the Termination Provision, which requires the Tribes to cease all gaming on a date certain, conflicts with the Tribes absolute right to conduct gaming under 2710(d)(1). As long as the State permits others to engage in the gaming that the Tribes desire to conduct, the State cannot use the Termination Provision in the Compact to compel the Tribes to cease gaming. This interpretation of 2710(d)(1) is consistent with Congress s stated purpose in enacting the IGRA, to provide a statutory basis for 3

8 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 8 of 35 the operation of gaming by Indian tribes U.S.C (emphasis added). Unless the State amends its laws and prohibits all forms of gaming or prohibits the games the Tribes wish to play, the Tribes have the unconditional right to engage in gaming and the State cannot use the Termination Provisions in the Compact or the compacting process to deny the Tribes that right. Artichoke Joe s Cal. Grand Casino v. Norton, 353 F.3d 712, 726 (9th Cir. 2003); S. Rep. No , at 14 (1988), reprinted in 1988 U.S.C.C.A.N In Appellees Answering Brief ( Answering Brief or AB ), the State does not respond to this argument. Instead, the State argues only that a Termination Provision is a proper subject of negotiation for a Class III Compact because it is either a standard or a subject directly related to the operation of gaming activities. In doing so, the State ignores this Court s rules of statutory construction. The State argues that the Court must accept the State s interpretation of the phrases standards for the operation of such activity and subjects that are directly related to the operation of gaming activities because the State s interpretation is reasonable and common sense. AB 22, 26. That is not the test for determining the meaning of words or phrases contained in a federal statute. In interpreting a statute, the Court initially applies the ordinary dictionary definitions to the words in the statute to ascertain their meaning. Rumsey Indian Rancheria of Wintun Indians v. Wilson, 64 F.3d 1250, 1258 (9th Cir. 1994) 4

9 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 9 of 35 ( Rumsey ). In this case, the relevant language is not merely the single words standards, subjects, and gaming activities. The Court must analyze those terms as they are used in the phrases standards for the operation of such activity and subjects that are directly related to the operation of gaming activities. 25 U.S.C. 2710(d)(1)(c)(vi) and (vii). When the phrases operation of such activities and operation of gaming activity are given their ordinary dictionary meaning, it is clear that a Termination Provision is not a standard or subject directly related to the operation of gaming activities and, therefore, is not a proper subject of negotiation under 25 U.S.C. 2710(d)(1)(c)(vi) and (vii). Black s Law Dictionary 1 defines operation as the process of operation or mode of action; an effect brought about in accordance with a definite plan; action; activity. Black s Law Dictionary 984 (5th ed. 1979) (emphasis added). Thus, the definition of operation requires some action or activity to be taking place. As was discussed at length in the Opening Brief, the phrases gaming activities and such activity were conclusively defined by the Supreme Court in Michigan v. Bay Mills Indian Community, U.S., 134 S. Ct (2014) ( Bay Mills ), as what goes on in a casino each roll of the dice and spin of the wheel. Id. at This Court used Black s Law Dictionary to define the word permits in 25 U.S.C. 2710(d)(1)(B) of the IGRA in Rumsey. 5

10 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 10 of 35 Recognizing the threat that the Supreme Court s decision in Bay Mills represents to its broad interpretation of the topics of negotiation, the State attacks the application of that case from a variety of angles, none of which stand up under scrutiny. The State begins by suggesting that Bay Mills does not support the Tribe s interpretation because the decision is focused on the grant of jurisdiction and abrogation of tribal sovereign immunity set forth in Section 2710(d)(3)(A)(ii), not the topics of negotiation listed in Section 2710(d)(3)(C). It is, the State argues, merely dicta. AB 33. This argument is meritless. A substantial section of the Supreme Court s analysis in Bay Mills is devoted to a discussion of the meaning of the term gaming activities. Bay Mills at That analysis is essential to the Supreme Court s decision, because it refutes one of Michigan s main arguments. Had the Supreme Court concluded that the definition of gaming activities was broad enough to encompass the on-reservation gaming authorization, licensing, and operational activities of the Bay Mills tribe, the Supreme Court would likely have ruled in favor of Michigan. In supporting this argument, furthermore, the State seems to suggest that the meaning of the term gaming activities, as established in Bay Mills, applies only to certain subsections of the IGRA and not to the subsections of Section

11 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 11 of 35 relating to the topics of negotiation. AB This argument, too, is selfevidently without merit. First, the suggestion that the definition of gaming activities changes from one section of the IGRA to another violates a fundamental rule of statutory interpretation. [T]here is a presumption that a given term is used to mean the same thing throughout a statute.... Brown v. Gardner, 513 U.S. 115, 118 (1994). Applying this presumption to the repeated use of gaming activities and such activities in the IGRA would compel the Court to interpret those phrases to have the same meaning throughout the statute. Moreover, the presumption [is] surely at its most vigorous when a term is repeated within a given sentence.... Id. at 118. The topics of negotiation listed in Section 2710(d)(3) are set forth in one sentence and, thus, the repeated use of gaming activities and such activities must be understood to have the same meaning. Second, the Supreme Court itself explicitly applied the definition to uses of the phrase throughout the IGRA. Bay Mills at [N]umerous provisions of IGRA show that class III gaming activity means just what it sounds like the stuff involved in playing class III games. For example, 2710(d)(3)(C)(i) refers to the licensing and regulation of [a class III gaming] activity.... Id. at 2032 (emphasis added). 7

12 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 12 of 35 As for the State s argument, AB 35, that the context of the use of the term gaming activities changes its meaning, that simply makes no sense. It would be impossible to enforce the provisions of the statute if the term gaming activities meant something different in each of the following phrases: the licensing and regulation of such activity, the standards for the operation of such activity, or any other subjects that are directly related to the operation of gaming activities. It also flies in the face of the Supreme Court s analysis. The Court reached its conclusion as to the limited meaning of the term gaming activities by demonstrating that the narrow definition of the term is the only logical definition given the use of the term throughout the statute. Bay Mills at The State attempts to bolster its context argument by citing to Flandreau Santee Tribe v. Gerlach, 2017 U.S. Dist. LEXIS (D.S.D. 2017) ( Flandreau ). AB The Flandreau case, however, does not support the State s position. First, the legal issues addressed in Flandreau did not relate to a compact negotiation dispute. The Flandreau case addressed whether the IGRA preempted the imposition of a state use tax on non-indian patrons of a number of tribal enterprises located on the Flandreau tribe s reservation lands. Its discussion of the topics of negotiation is dicta. Second, the State misrepresents Flandreau. The State asserts that: 8

13 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 13 of 35 AB 36. The Flandreau court discussed that application of the Bay Mills definition of gaming activity to subsections (vi) and (vii) would render 2710(d)(3)(C)(vii) superfluous because subsection (i) already provides a means by which states and tribes may negotiate regarding the application of civil laws and regulations that are directly related to, and necessary for, the licensing and regulation of such activity. 25 U.S.C. 2710(d)(3)(C)(i). Flandreau, at * The Flandreau court indeed discussed the application of Bay Mills to subsections (vi) and (vii), but the court did not conclude that the application of the Bay Mills definition of gaming activities would render subsection (vii) superfluous. The Flandreau court s reference to provisions of 25 U.S.C. 2710(d)(3)(C) becoming superfluous related to the preemption analysis set forth in Gaming Corp. of Am. v. Dorsey & Whitney, 88 F.3d 536, 549 (8th Cir. 1996), not to the Bay Mills decision. Flandreau, 2017 U.S. Dist. LEXIS , * Flandreau, furthermore, did not suggest that the Bay Mills definition of gaming activities was not applicable to the analysis of the scope of Section 2710(d)(3)(C)(vi) and (vii). On the contrary, Flandreau applied the definition of gaming activities, as the Bay Mills court directed, 2 by inserting it into the provision that was at issue in the case. [T]his Court must determine what is 2 Those phrases make perfect sense if class III gaming activity is what goes on in a casino each roll of the dice and spin of the wheel. But they lose all meaning if, as Michigan argues, class III gaming activity refers equally to the off-site licensing or operation of the games. (Just plug in those words and see what happens.) Bay Mills at (emphasis added). 9

14 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 14 of 35 directly related to the operation of gaming activities, or, in the words of the Supreme Court in Bay Mills, what is directly related to the operation of the gambling in the poker hall. Flandreau at *16 (emphasis original). The Flandreau decision is, thus, entirely consistent with the Tribes analysis of the topics of negotiation. When any variant of termination provision, duration provision, or term provision is inserted into subsections (vi) and (vii) to replace gaming activities, those provisions make no sense. In seeking to show that the Flandreau decision identifies a significant difference between the Bay Mills analysis and the legal issues in Flandreau, the State also misrepresents the Bay Mills decision: The Court did not discuss the concept relevant to this case, the operation of gaming activities, included in both 25 U.S.C. 2710(d)(3)(C)(vi) and (vii), but absent from subsection (i). AB 34. This assertion is in direct conflict with the text of the Bay Mills decision. Bay Mills specifically cited to the phrase operation of gaming activities in one of the many examples of the use of gaming activities in the statute that require the narrow definition articulated by the Court: [N]umerous provisions of IGRA show that class III gaming activity means just what it sounds like the stuff involved in playing class III games. For example, 2710(d)(3)(C)(i) refers to the licensing and regulation of [a class III gaming] activity and 2710(d)(9) concerns the operation of a class III gaming activity. Bay Mills at

15 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 15 of 35 Equally important, the Flandreau ruling simply does not support the State s position. The Flandreau court concluded that subsection (vii) did not preempt every transaction that is even peripherally related to gaming. Rather, the court found that the IGRA only preempted those transactions that occurred in that tribe s gaming facility and related facilities. Flandreau at * The Flandreau court ruled that the IGRA did not preempt taxation of transactions in the tribe s convenience store that were unrelated to gaming because the mere fact that the convenience store falls within the same business enterprise operated by the Tribe is not sufficient to equate such services as directly related to the operation of gaming. Id. at *31. Flandreau, thus, does not stand for the proposition that the term gaming activities or the phrase directly related to the operation of the gaming activities is so broad as to include purely contractual provisions like a Termination Provision that are not directly related to the practical, day-to-day operation of a casino. Finally, application of the dictionary definition of standards or subjects rebuts the State s argument that the Termination Provision constitutes a standard[] for the operation of such activity. The Law Dictionary defines standards as a [w]ritten limit, definition or rule that is approved and monitored by an agency as 11

16 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 16 of 35 the minimum benchmark acceptable. 3 It is clear from this definition that the term standards, as used in Section 2710(d)(3)(C)(vi), relates to definitions or rules for the operation of tribal gaming facilities and the conduct of gaming in tribal gaming facilities. It defines how the gaming is to be conducted. A termination provision does not establish any rule or measure to be applied to how the gaming is to be conducted. It is a provision that defines how long the compact will be in effect. This interpretation of standards is consistent with the Congressional findings in the IGRA: The Congress finds that... (3) existing Federal law does not provide clear standards or regulations for the conduct of gaming on Indian lands. 25 U.S.C. 2701(3) (emphasis added). It is also consistent with the Congressional purposes set forth in the IGRA: [T]he establishment of Federal standards for gaming on Indian lands... [is] necessary to meet congressional concerns regarding gaming and to protect such gaming as a means of generating tribal revenue. 25 U.S.C. 2702(3) (emphasis added). The topics of negotiation identified in the IGRA unmistakably reflect Congress s intent to provide regulation of the gaming through the establishment of [w]ritten limit[s], definition[s] or rule[s] that [are] approved and monitored by an agency as the minimum benchmark[s] acceptable. That intent, and Congress s use of the term standard or standards, does not encompass a Termination Provision

17 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 17 of 35 The dictionary definitions of standard and standards are also consistent with the use of that term by courts in interpreting the term as it is used in the IGRA. See Gaming Corp. of Am. v. Dorsey & Whitney, 88 F.3d 536, 544 (8th Cir. 1996); Colorado River Indian Tribes v. Nat l Indian Gaming Comm n, 383 F. Supp. 2d 123, , (D.C. Cir. 2005)[Under the IGRA, tribes adopt standards to regulate the day-to-day gaming activities at Class III operations. ] Revealingly, after citing to Flandreau and the Ninth Circuit cases discussed therein, 4 the State does not offer any definition of, or even any parameters for defining, standards, gaming activities, or operation of gaming activities. It just skips right on to an unsupported assertion: A duration provision is at least as closely related to the operation of gaming activity as would be the tribal revenuesharing provisions, tribal labor relations provisions, and environmental mitigation measures that have already been held to be permissible subjects for negotiation under IGRA.... These various compact provisions all beyond mere rules for playing class III games have been held to be within the scope of subsections (vi) and (vii). AB In re Indian Gaming Related Cases, 331 F.3d 1094 (9th Cir. 2003) ( Coyote Valley ), Rincon Band of Luiseno Mission Indians of the Rincon Reservation v. Schwarzenegger, 602 F.3d 1019 (9th Cir. 2010), and Big Lagoon Rancheria v. California, 759 F. Supp. 2d 1149 (N.D. Cal. 2010). 13

18 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 18 of 35 The State fails to explain how the Termination Provision is at least as closely related to the operation of gaming activities as would be the tribal revenuesharing provisions, tribal labor relations provisions, and environmental mitigation measures. All of those provisions were related to the operation of the gaming facility and the purposes of Congress in supporting the development of tribal economies, not to a purely contractual provision. Moreover, the Tribes have not argued that the operation of gaming activities relates exclusively to mere rules for playing class III games. Rather, the Tribes maintain that the phrase relates to the practical, day-to-day operation of a casino, from the rules of the games to security and surveillance, the handling of money, the days and hours of operation, and many other practical matters. Those matters are consistent with the Supreme Court s analysis in Bay Mills and the provisions permitted under the Ninth Circuit cases addressed in Flandreau. Based upon Bay Mills and Flandreau, the definitions of standards, operation, and gaming activities, taken together, make it clear that the operation of gaming activities relates to the Tribes conduct and regulation of Class III games played in their casinos. The Termination Provision has absolutely nothing to do with the business operation of the casino or the playing of the games within the casinos. The Termination Provision requires the termination of the Tribes casino operations and the gaming activities in their casinos. 14

19 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 19 of The State Failed to Demonstrate that its Interpretation of the IGRA Is Consistent with the Intent of Congress. The State offers only a brief response to the Tribes demonstration that the Termination Provision is inconsistent with the stated purposes of the IGRA. 25 U.S.C The State s argument avoids entirely the question of how termination of tribal gaming could ever be consistent with Congress s goal to provide a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments. Section 2702(1) (emphasis added). It also ignores the fact that the Termination Provision does not provide any benefits to the Tribes that are consistent with Congress s intent that would counterbalance the negative impacts of the Termination Provision. The State s arguments are simply an exercise in misdirection. The State argues that nothing in IGRA or its legislative history demonstrates that Congress intended IGRA to ensure that tribes could generate necessary levels of revenue from gaming or gain access to sufficient funding to develop desired gaming operations, related hotel and recreational facilities, and the like. AB The Tribes did not argue that Congress intended that the IGRA ensure specific amounts of revenue. Congress did, however, intend to promote tribal economic development, self-sufficiency, and strong tribal governments. 15

20 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 20 of 35 Congress did not intend to preclude or obstruct that development. By preventing the Tribes from obtaining financing that would allow them to sufficiently expand their gaming operations to raise their members out of their current levels of poverty, the Termination Provision interferes with Congress s intent to promote tribal economic development. The State argues then that [m]any factors affect whether a tribal operation is financially successful, including the location of a tribe s gaming-eligible lands, competition from other tribal and non-tribal gaming, and the state of the economy. AB 39. There are, indeed, many reasons why tribal gaming can be more or less successful. That observation, however, is not responsive to the Tribes demonstration that the Termination Provision prevented them from obtaining financing that would allow them to expand their gaming, which is inconsistent with Congress s purposes. The State presented no evidence to the District Court establishing that the Tribes difficulty in obtaining financing arose from any of the factors it argues could affect the financial success of a tribal gaming operation. In fact, the State does not address the impact of the Termination Provision at all. The State just lists other possible factors and offers no analysis as to how that observation supports the State s assertion that the Termination Provision is consistent with Congress s intent. 16

21 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 21 of 35 The State further observes that the provision for sharing gaming revenue with small-gaming and non-gaming tribes, the Revenue Sharing Trust Fund ( RSTF ), was placed in the 1999 Compact because of the obstacles to the development of gaming operations faced by some tribes. AB 39. That may well be true, but, again, the RSTF provision reveals nothing about Congress s intent. The RSTF is a creation of the State and the Indian tribes of California, not Congress. Revealingly, however, this Court concluded that the RSTF is a permissible provision because it was designed to alleviate, to some degree, the dire conditions of Indian tribes throughout California in 1999, which is consistent with Congress s intent to promote tribal economic development, self-sufficiency, and strong tribal governments. Coyote Valley at Termination of the 1999 Compacts, in contrast, would be inconsistent with both Congress s purposes and the purpose of the RSTF because it would terminate the tribal gaming operations that produce the tribal revenue from which the RSTF payments derive. It is unclear how the fact that [t]he poorest of tribes have remained the poorest communities in the United States, AB 39, constitutes evidence of the fulfillment of Congressional intent or an argument in support of the validity of termination provisions. The Termination Provision is an obstacle to the development of gaming operations that are intended to raise the Tribes members out of poverty. The continuing existence of profoundly impoverished tribal 17

22 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 22 of 35 communities is evidence of the need for more and expanded tribal gaming, not the termination of tribal gaming or the restriction of tribal access to financing for the expansion of gaming activities that would lead to increased revenue for those impoverished communities. In the State s final attempt to divert attention from the Tribes argument, it argues that [w]hile IGRA established a statutory basis for the operation of gaming, it did not endeavor to insulate tribes from market forces or to remove all barriers to tribal gaming operations generating sufficient revenues to meet tribal needs. AB 40. The Tribes never argued that Congress intended to do so. The Tribes maintain that Congress intended to create a statutory scheme that would promote tribal economic development through the operation of gaming, that termination provisions conflict with that intention, and that termination provisions do not promote any of IGRA s purposes. 3. There Is No Agency Interpretation of the IGRA to Which this Court Could Afford Deference Under Chevron or Skidmore. In their Opening Brief, the Tribes demonstrated that the Court is not required to afford deference to the Department of the Interior s interpretation of the IGRA. In its Answering Brief, the State does not address the cases and arguments presented by the Tribes. Instead, the State argues that the regulations promulgated by the Secretary of the Interior ( Secretary ) in 25 C.F.R. Part 293 and 25 C.F.R. 18

23 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 23 of 35 Part 291 constitute agency interpretations of the IGRA that are entitled to deference pursuant to Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837 (1984). AB In the alternative, the State argues that the Secretary s approvals of compacts with termination provisions should be afforded deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944). AB Neither of the State s arguments has merit. While 25 C.F.R. Part 293 includes references to extensions and timeframes, the Secretary included no reasoning or analysis explaining why extensions and timeframes were referenced in the regulations. Part 293 does not address, in any fashion, whether a tribal-state compact may include a termination provision. The State, nevertheless, argues that, by defining the term extensions in 25 C.F.R (b)(3) and by providing that extensions of compacts do not require secretarial approval in 25 C.F.R , the Secretary has determined that compact timeframes (e.g., end dates) are permissible under the IGRA. AB 42. The State does not explain how the definition of the word extension in the federal regulations reflects the agency s interpretation of the scope of the proper subjects of negotiation. The State merely points to the existence of the two regulations and asserts that, by promulgating 25 C.F.R (b)(3) and 25 C.F.R , the Secretary has interpreted the IGRA and found that a termination provision is a permissible subject of negotiation. The State then blithely asserts that [t]his 19

24 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 24 of 35 interpretation of the IGRA by the administering agency is entitled to considerable deference [under Chevron]. Id. The State, in effect, asks the Court to give Chevron deference to what the State believes the Secretary implied by promulgating the regulations. Instead of constituting an agency s interpretation of the IGRA to which this Court could defer, the references to extensions and timeframes simply recognize the realities of the tribal-state compact negotiation process. As a result of the Supreme Court s decision in Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996), many states enjoy sovereign immunity from suits filed by tribes alleging that the state has refused to negotiate in good faith. In those states, Indian tribes, because of the lack of an enforcement mechanism, are forced to take or leave the offers made by the states, regardless of whether the tribes believe that the provisions of the proposed compacts are permissible under the IGRA. The Secretary, in turn, has allowed a number of compacts to be approved by operation of law, even where a provision of the compact violates the IGRA, because the alternative would be that the tribes would not be able to conduct class III gaming. 5 5 Significantly, nothing in 25 C.F.R. Part 293 requires the Secretary to disapprove a compact if it includes provisions that violate the IGRA. See 25 C.F.R [ The Secretary may disapprove a compact or amendment only if it violates the IGRA. (emphasis added)]. Thus, Secretarial approval does not constitute the Secretary s determination that the provisions of an approved contract do not violate 20

25 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 25 of 35 See e.g. Pueblo of Sandia v. Babbitt, 47 F. Supp. 2d 49, 51 (D.D.C. 1999). Some of those compacts include termination provisions. As a result, the Secretary is compelled to recognize that some compacts will require extensions. Under these circumstances, it makes sense that the Secretary would promulgate regulations that address timeframes or extensions of compacts. That does not constitute an affirmative conclusion on the part of the Secretary that termination provisions are consistent with the language and purposes of the IGRA. The State next argues that, because secretarial procedures issued pursuant 25 C.F.R. Part 291 must include the length of time the procedures will remain in effect, 25 CFR 291.4(j)(18), the Secretary has interpreted the IGRA to authorize termination provisions in gaming compacts. AB The State s argument is nothing more than an unsupported leap of logic. The purposes of, and process for promulgating, secretarial procedures are significantly different from the purposes of, and requirements for, compact negotiation, agreement, and approval. Cf. 25 U.S.C. 2710(d)(3)-(4) with 25 U.S.C. 2710(d)(7). The inclusion of a duration provision in secretarial procedures, which are imposed as a result of a state s refusal to agree to a compact, provides states with an opportunity to consider the effects of the gaming conducted the IGRA. It reveals, at most, that the Secretary concluded that the approval of a particular compact was in the best interests of the tribe. 21

26 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 26 of 35 under the procedures at the end of the term, and to reconsider the state s original opposition to entering into a compact. The duration provision, thus, provides states with an additional opportunity to reach agreement on a compact, Congress s intended mechanism for authorizing and regulating Class III gaming. 6 The fact that duration is contemplated by 25 C.F.R. Part 291, which governs gaming in the absence of a tribal-state compact, provides no basis for concluding that the Secretary has determined that the inclusion of a termination provision in gaming compacts is authorized by the IGRA. Finally, the State argues that, [i]f this Court determines that IGRA s implementing regulations are not entitled to Chevron deference, then the agency s construction of IGRA as established by Part 293, its consistent and uniform practice of affirmatively approving class III gaming compacts with duration provisions (including the 1999 Compact), and its deeming approved other compacts with duration provisions, is entitled to traditional deference under Skidmore. AB This argument fails because the elements necessary to invoke Skidmore deference are not present in this case. Under Skidmore, the weight [accorded to an administrative] judgment in a particular case will depend upon the thoroughness evident in its consideration, the 6 The Secretary has also acknowledged that secretarial procedures, like compacts, may include provisions that violate the IGRA, but that tribes have accepted such provisions as a compromise. See ER

27 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 27 of 35 validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control. Skidmore, 323 U.S. at 140. As the Tribes have demonstrated, the Secretary has never addressed whether a termination provision is a proper subject of negotiation under the IGRA. There is, therefore, no agency consideration of the issue for the Court to review. As a result, Secretarial approval of compacts with termination provisions is not entitled to any weight under Skidmore. Moreover, even if the Court were to conclude that the Secretary s approval of compacts with duration provisions might be entitled to Skidmore deference, that deference would have to give way to the Indian canons of statutory construction. In Crow Tribal Hous. Auth. v. United States HUD, 781 F.3d 1095 (9th Cir. 2015), this Court stated that, where an agency s actions may be entitled to some deference under Skidmore..., [but where] its power to persuade would be minimal due to the lack of any formal or thorough interpretive process, the Indian canons of statutory construction must guide the Court s interpretive analysis not Skidmore. Id., citing United States v. Mead Corp., 533 U.S. 218, (2001). 23

28 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 28 of The Indian Canons of Construction Apply to the Court s Interpretation of the IGRA in this Case. The State argues that the Indian canons 7 do not apply to the interpretation of IGRA in this case. The State s arguments are meritless. The State initially asserts that, if the IGRA were to be considered ambiguous with regard to the Tribes claims, the deference accorded administrative construction of a statute under Chevron trumps the Indian canon of construction. AB 47, citing Williams v. Babbitt, 115 F.3d 657, 660 (9th Cir. 1997) ( Babbitt ). In Babbitt, the court concluded that, where an agency interpretation is entitled to Chevron deference, that deference trumps the Indian canons. Babbitt, 115 F.3d at 663, n. 5. However, there are no agency interpretations addressing termination provisions. See Section 3, above. Thus, there is no agency interpretation to which Chevron deference applies. Babbitt has no application to the Tribes claims and does not bar the application of the Indian canons. The State next argues that the Indian canon requires a determination that all tribal interests are aligned and that the statutory construction is favorable to all Indians, not just to the tribe requesting the determination. AB 47, citing 7 [S]tatutes are to be construed liberally in favor of the Indians, with ambiguous provisions interpreted to their benefit. Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 766 (1985). 24

29 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 29 of 35 Rancheria v. Jewell, 776 F.3d 706, 713 (9th Cir. 2015) ( Jewell ) (emphasis added). The State s assertion is simply wrong. In Jewell, the court initially observed that [t]he canon has been applied only when there is a choice between interpretations that would favor Indians on the one hand and state or private actors on the other. Jewell, 776 F.3d at 71. The court went on, however, stating that [t]his court has explained that the Blackfeet presumption does not apply when tribal interests are adverse because [t]he government owes the same trust duty to all tribes.... It cannot favor one tribe over another. Id., citing Confederated Tribes of Chehalis Indian Reservation v. Washington, 96 F.3d 334, 340 (9th Cir. 1996) ( Confederated Tribes ). The Jewell court s analysis does not support the State s position, as this case presents a choice between interpretations that would favor Indians on the one hand and state or private actors on the other. The Jewell court s citation to Confederated Tribes further undermines the State s argument. In Confederated Tribes, the Shoalwater Bay Tribe and the Confederated Tribes of the Chehalis Indian Reservation asserted a number of fishing rights claims, including a claim that they were entitled to the treaty fishing rights of the Quinault Tribe. After acknowledging the broad reach of the Indian canons, the Confederated Tribes court explained why the Indian canons did not apply to the unusual circumstances of that case: 25

30 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 30 of 35 The rules of construction, however, are of no help to the Tribes in their claim to Quinault fishing rights because of the countervailing interests of the Quinaults. The government owes the same trust duty to all tribes, including the Quinault.... We cannot apply the canons of construction for the benefit of the Tribes if such application would adversely affect Quinault interests. Id. at 340 (emphasis added). The Confederated Tribes court, thus, concluded that the Indian canons did not apply because the dispute involved a direct and demonstrable conflict between Indian tribes and the federal government s obligations to those tribes. That stands in stark contrast with this case. Conflicting trust obligations of the United States are not involved. Tribes are not opposing one another in this litigation. There is no evidence in the record that would provide a basis for concluding that invalidating the Termination Provision in the Tribes compacts would have a negative impact on any other tribe. No tribe has attempted to intervene in this case in order to contest the Tribes claims. No tribe has filed an amicus brief expressing concerns about the potential negative impact of the Tribe s claims on the interests of Indian tribes. The exception to the Indian canons identified in Jewell and Confederated Tribes does not, therefore, apply to this case. The State, nevertheless, posits three potential adverse impacts of a perpetual compact term on other tribes. First, the State asserts that, if the Termination Provision is invalidated, payments to the RSTF would be capped in perpetuity. AB 26

31 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 31 of Second, the State argues that a perpetual 1999 Compact would limit the expansion of class III gaming by 1999 Compact tribes to 2,000 slot machines. AB 49. Finally, the State argues that [t]he availability of new compact terms would be made more difficult with a compact subject to a perpetual term, and impossible with regard to subjects not covered by a modification provision. AB 49. None of these theoretical assertions provide a basis for barring application of the Indian canons to the Tribes claims. The 1999 Compact contains a provision that allows the parties to amend the Compact: The terms and conditions of this Gaming Compact may be amended at any time by the mutual and written agreement of both parties Compact, Section 12.1, ER 177. Section 12.1 is not limited to specific topics or only to certain sections of the Compact. The parties are free at any time to amend the Compact to increase the RSTF payment, increase the cap on the number of slot machines, or amend any provision of the Compact that would warrant modification based on changed circumstances. The State has, in fact, done just that. It renegotiated at least ten 1999 Compacts, lifting the cap on the number of slot machines, increasing the payments to the RSTF, and changing other provisions of the Compacts based on changed circumstances. See, e.g., the amended compacts of 27

32 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 32 of 35 the Pechanga Band of Indians (2016), the Jackson Rancheria (2016), and the Sycuan Band of Indians (2015). 8 The State attempts to support its position by arguing that the good faith requirement of the IGRA would not apply to negotiations carried out under Section 12 of the 1999 Compact. AB 50. That is not true. Section 12.3 requires that negotiations be carried out in good faith: ER 177. Unless expressly provided otherwise herein, all matters involving negotiations or other amendatory processes under... this Section 12.0 shall be governed, controlled, and conducted in conformity with the provisions and requirements of IGRA, including those provisions regarding the obligation of the State to negotiate in good faith and the enforcement of that obligation in federal court. A termination provision is, furthermore, neither the only nor the best means of ensuring that the parties have the ability to negotiate amendments and modifications to the 1999 Compact. The threat of termination is not necessary to successful negotiations. If the State concludes that it would be to its benefit to include a more detailed or compulsory provision addressing the amendment or modification of the 1999 Compact, the State could propose negotiation of such a 8 Available, respectively, at the California Gambling Control Commission s website: a_compact_2016.pdf; pacts/jackson_compact_amendment_2016.pdf; and 20Compact%202015%20(3).pdf. 28

33 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 33 of 35 provision pursuant to Section 12.1 or pursuant to the parties inherent right to renegotiate provisions of the 1999 Compact whenever the parties agree to do so. Even if the Court were inclined to consider the State s argument sympathetically, the State s position suffers from an even more fundamental flaw. Assuming that the opportunity to amend and modify compacts is valuable to the parties to the 1999 Compact, the State does not and cannot explain how the benefit to tribes of negotiating amendments to, and modifications of, the 1999 Compacts pursuant to the Termination Provision outweighs the benefit to tribes of an unassailable right to conduct gaming. The State has not, therefore, identified any actual conflict between the interests of the Tribes in this case and any other tribes. The alleged conflicts are merely imagined conflicts concocted by the State s attorneys. The Indian canons were developed to protect Indians and Indian tribes from deceptive and dishonest interpretations of laws by state and federal officials. To allow states to evade the effect of the Indian canons by merely alleging imagined conflicts would be to permit states to behave in precisely the manner that necessitated the development of the Indians canons in the first place. CONCLUSION The State s arguments reveal why the Tribes claims are in the interests of all tribes that are parties to the 1999 Compact. The State believes that the only 29

34 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 34 of 35 negotiations that should occur, and the only negotiations in which the State will participate in good faith, are those that occur when tribes are compelled to do so. The State resists the Tribes interpretation of the Termination Provision because it would take away the State s leverage to negotiate with the Tribes when they are under the duress arising from the threat of termination. The invalidation of the Termination Provision would level the playing field: the Tribes and the State would be able to negotiate any changes that they desire, the Tribes and the State would be compelled to negotiate in good faith, and the Tribes and the State would be able to negotiate as equal partners and as equal sovereigns. 30

35 Case: , 03/09/2018, ID: , DktEntry: 23-1, Page 35 of 35 CERTIFICATE OF SERVICE I hereby certify that I electronically filed the forgoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system on March 9, I certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the CM/ECF system. /s/ Ericka Duncan Ericka Duncan 31

36 Form 8. Case: , 03/09/2018, ID: , DktEntry: 23-2, Page 1 of 1 Certificate of Compliance Pursuant to 9th Circuit Rules (f), 29-2(c)(2) and (3), 32-1, 32-2 or 32-4 for Case Number Note: This form must be signed by the attorney or unrepresented litigant and attached to the end of the brief. I certify that (check appropriate option): This brief complies with the length limits permitted by Ninth Circuit Rule The brief is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable. The brief's type size and type face comply with Fed. R. App. P. 32(a)(5) and (6). This brief complies with the length limits permitted by Ninth Circuit Rule The brief is 6,936 words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable. The brief's type size and type face comply with Fed. R. App. P. 32(a)(5) and (6). This brief complies with the length limits permitted by Ninth Circuit Rule 32-2(b). The brief is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable, and is filed by (1) separately represented parties; (2) a party or parties filing a single brief in response to multiple briefs; or (3) a party or parties filing a single brief in response to a longer joint brief filed under Rule 32-2(b). The brief's type size and type face comply with Fed. R. App. P. 32(a)(5) and (6). This brief complies with the longer length limit authorized by court order dated The brief's type size and type face comply with Fed. R. App. P. 32(a)(5) and (6). The brief is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable. This brief is accompanied by a motion for leave to file a longer brief pursuant to Ninth Circuit Rule 32-2 (a) and is words or pages, excluding the portions exempted by Fed. R. App. P. 32 (f), if applicable. The brief s type size and type face comply with Fed. R.App. P. 32(a)(5) and (6). This brief is accompanied by a motion for leave to file a longer brief pursuant to Ninth Circuit Rule 29-2 (c)(2) or (3) and is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable. The brief's type size and type face comply with Fed. R. App. P. 32(a)(5) and (6). This brief complies with the length limits set forth at Ninth Circuit Rule The brief is words or pages, excluding the portions exempted by Fed. R. App. P. 32(f), if applicable. The brief s type size and type face comply with Fed. R. App. P. 32(a)(5) and (6). Signature of Attorney or Unrepresented Litigant /s/ Lester J. Marston Date 03/09/2018 ("s/" plus typed name is acceptable for electronically-filed documents) (Rev.12/1/16)

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