Pueblo of Santa Ana v. Kelly , 104 F.3d 1546 ( 1997 )

PUBLISH
UNITED STATES COURT OF APPEALS
Filed 1/10/97
TENTH CIRCUIT
PUEBLO OF SANTA ANA, PUEBLO
OF SAN JUAN, PUEBLO OF
TESUQUE, PUEBLO OF ACOMA,
PUEBLO OF SANDIA, PUEBLO OF
ISLETA, PUEBLO OF POJOAQUE,
SAN FELIPE GAMING ENTERPRISE
BOARD, PUEBLO OF TAOS,
Plaintiffs - Counter-Defendants -
Appellants,
v. No. 96-2162
JOHN J. KELLY, in his official capacity
as United States Attorney for the District
of New Mexico; JANET RENO, Attorney
General of the United States; BRUCE
BABBITT, United States Secretary of the
Interior; UNITED STATES OF
AMERICA,
Defendants - Counter-Claimants -
Appellees,
and
STATE OF NEW MEXICO,
Counter-Defendant - Appellee.
_____________________
GUY CLARK, MAX COLL, GEORGE
BUFFETT, STATE OF ALABAMA,
STATE OF ARIZONA, STATE OF
CALIFORNIA, STATE OF FLORIDA,
STATE OF IDAHO, STATE OF
MASSACHUSETTS, STATE OF
NEVADA, STATE OF RHODE
ISLAND, STATE OF HAWAII, STATE
OF KANSAS, STATE OF MICHIGAN,
STATE OF OKLAHOMA, STATE OF
VERMONT, NATIONAL INDIAN
GAMING ASSOCIATION, SAN
MANUEL BAND OF MISSION
INDIANS, SHAKOPEE
MDEWAKANTON SIOUX
COMMUNITY, and SISSETON
WAHPETON SIOUX TRIBE,
Amici Curiae.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
(D.C. NO. CIV-96-0002-MV)
Richard W. Hughes (John L. Sullivan with him on the briefs), Rothstein, Donatelli,
Hughes, Dahlstrom, Cron & Schoenburg, LLP, Santa Fe, New Mexico, for Plaintiffs -
Counter-Defendants - Appellants Pueblo of Santa Ana, Pueblo of San Juan, Pueblo of
Tesuque, Pueblo of Sandia, Pueblo of Isleta, Pueblo of Pojoaque, San Felipe Gaming
Enterprise Board, and Pueblo of Taos.
Peter C. Chestnut and Ann Berkley Rodgers, Chestnut Law Offices, Albuquerque, New
Mexico, on the brief for Plaintiff - Counter-Defendant - Appellant Pueblo of Acoma.
Christopher D. Coppin, Assistant Attorney General (Tom Udall, Attorney General of New
Mexico, with him on the brief), Albuquerque, New Mexico, for Counter-Defendant -
Appellee.
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James F. Simon (Lois J. Schiffer, Assistant Attorney General, Albuquerque, New Mexico,
John J. Kelly, United States Attorney, Phyllis A. Dow, Assistant U.S. Attorney,
Albuquerque, New Mexico, and Edward J. Passarelli, Trial Attorney, Department of
Justice, Washington, D.C., on the brief), United States Department of Justice,
Washington, D.C., for Defendants - Counter-Claimants - Appellees.
Victor R. Marshall, Victor R. Marshall & Associates, P.C., Albuquerque, New Mexico,
filed an amicus curiae brief for Amici Guy Clark, Max Coll, and George Buffett.
Thomas F. Gede, Special Assistant Attorney General (Daniel E. Lungren, Attorney
General, State of California), Sacramento, California, filed an amicus curiae brief for
Amici State of State of Alabama, State of Arizona, State of California, State of Florida,
State of Idaho, State of Massachusetts, State of Nevada, State of Rhode Island, State of
Hawaii, State of Kansas, State of Michigan, State of Oklahoma, and State of Vermont.
Jerome L. Levine and Frank R. Lawrence, Levine & Associates, Los Angeles, California
(Kurt V. BlueDog and Andrew M. Small, BlueDog, Olson & Small, Minneapolis,
Minnesota), filed an amicus curiae brief for Amici National Indian Gaming Association,
San Manuel Band of Mission Indians, Shakopee Mdewakanton Sioux Community, and
Sisseton Wahpeton Sioux Tribe.
Before ANDERSON, McWILLIAMS, and WEIS*, Circuit Judges.
ANDERSON, Circuit Judge.
This case presents a central, and dispositive, question: whether, under the Indian
Gaming Regulatory Act, the Secretary of the Interior can, by his approval, give life to a
compact which was void from its inception because the state governor who signed the
The Honorable Joseph F. Weis, Jr., United States Senior Circuit Judge for the
*
Third Circuit, sitting by designation.
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compact lacked the authority under state law to sign on behalf of the state. We hold that
the Secretary cannot, under the Act, vivify that which was never alive, and we therefore
affirm the decision of the district court.
Plaintiffs and appellants Pueblo of Santa Ana, Pueblo of San Juan, Pueblo of
Tesuque, Pueblo of Acoma, Pueblo of Sandia, Pueblo of Isleta, Pueblo of Pojoaque, and
Pueblo of Taos are federally recognized Indian tribes in New Mexico. Plaintiff and
appellant San Felipe Gaming Enterprise Board is a gaming enterprise chartered under the
laws of the Pueblo of San Felipe.1 The Tribes have been operating casinos and other
gaming facilities in New Mexico. They brought this action, seeking a declaration of the
validity of the Tribal-State gaming compacts they had entered into with the State of New
Mexico, under the Indian Gaming Regulatory Act (“IGRA”), after the New Mexico
Supreme Court held that the Governor of New Mexico, who had signed the compacts,
lacked the authority to do so and at least suggested that New Mexico law did not permit
the kind of gambling they were conducting. Defendants John J. Kelly, the United States
Attorney for New Mexico, Janet Reno, the Attorney General of the United States, Bruce
Babbitt, the United States Secretary of the Interior, and the United States of America
counterclaimed, seeking a declaration that the Tribes were conducting gambling in
violation of federal and state law, and joined the State of New Mexico as a party.2
1
We will hereafter refer to the Pueblo tribes as the “Tribes.”
2
There are three other appeals involving identical issues, the outcome of which will
(continued...)
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The Tribes and the United States filed cross-motions for summary judgment. The
state filed a brief in support of the United States’ cross-motion. The district court granted
summary judgment to the United States and the State of New Mexico, concluding that the
compacts were not valid under IGRA because the Governor lacked the authority under
New Mexico law to execute the compacts on behalf of the state. It therefore declared that
the Tribes’ class III gaming activities violated federal law. The district court granted the
Tribes’ request for a stay of its judgment, thereby permitting the Tribes’ casinos and other
gaming facilities to remain open pending this appeal. We affirm.
BACKGROUND
I. IGRA
The Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701-2721 (“IGRA”) provides a
“comprehensive regulatory framework for gaming activities on Indian lands” which
“seeks to balance the interests of tribal governments, the states, and the federal
government.” Ponca Tribe of Oklahoma v. Oklahoma, 37 F.3d 1422, 1425 (10th Cir.
1994), vacated, 116 S. Ct. 1410 (1996). It furthers the dual goals of providing “a
2
(...continued)
be determined by our decision in this case: Apache Tribe of the Mescalero Reservation v.
New Mexico, No. 96-2156; Apache Tribe of the Mescalero Reservation v. Reno, No. 96-
2199; and Jicarillo Apache Tribe v. Kelly, No. 96-2192. The district courts in those cases
reached the same conclusion as the district court here: namely, that the compacts
permitting those tribes to conduct class III gaming are invalid.
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statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal
economic development, self-sufficiency, and strong tribal governments” as well as
ensuring that gaming on Indian lands is shielded from “organized crime and other
corrupting influences.” 25 U.S.C. § 2702(1), (2). See Indian Affairs Comm., Indian
Gaming Regulatory Act, S. Rep. No. 100-446, at 1-3 (1988), reprinted in 1988
U.S.C.C.A.N. 3071, 3071-73.3
IGRA provides for three types of gaming: class I, class II and class III. Only
class III gaming, high-stakes casino-style gaming, is at issue in this case. It “includes
such things as slot machines, casino games, banking card games, dog racing, and
lotteries.” Seminole Tribe of Florida v. Florida, 116 S. Ct. 1114, 1119 (1996). Class III
gaming is permitted if it is “located in a State that permits such gaming for any purpose
by any person, organization, or entity” and is “conducted in conformance with a Tribal-
State compact entered into by the Indian tribe and the State . . . that is in effect.” 25
U.S.C. § 2710(d)(1)(B), (C). The rationale for the compact system is that “there is no
adequate Federal regulatory system in place for Class III gaming, nor do tribes have such
systems for the regulation of Class III gaming currently in place,” and thus “a logical
3
IGRA was enacted in response to the Supreme Court’s decision in California v.
Cabazon Band of Mission Indians, 480 U.S. 202 (1987), in which the Court held that
California could not enforce its state and local gaming laws on Indian lands because
California regulated, as opposed to completely prohibited, such gaming. Thus, Cabazon
established a distinction between civil/regulatory laws and criminal/prohibitory laws.
States could enforce criminal/prohibitory laws relating to gambling on Indian lands, but
not civil/regulatory laws.
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choice is to make use of existing State regulatory systems” through a negotiated compact.
S. Rep. No. 100-446, at 13-14, reprinted in 1988 U.S.C.C.A.N. 3071, 3083-84. A Tribal-
State compact “shall take effect only when notice of approval by the Secretary [of the
Interior] of such compact has been published by the Secretary in the Federal Register.”
25 U.S.C. § 2710(d)(3)(B). Indian gaming conducted in accordance with the Act’s
requirements is exempt from federal and state criminal gambling prohibitions.
II. Indian Gaming in New Mexico
Since IGRA’s passage in 1988, various Indian tribes in New Mexico have sought
to enter into class III gaming compacts with the state. Governor Bruce King appointed a
task force in 1990 to negotiate gaming compacts with two tribes, the Pueblo of Sandia
and the Mescalero Apache tribes. In 1991, after reaching some form of agreement
permitting limited class III gaming, the task force presented the compacts to Governor
King for signature, but he refused to sign them. The Pueblo of Sandia and the Mescalero
then filed suit against the Governor and the State, seeking to require them to negotiate
compacts in good faith, as required at that time by IGRA. See § 2710(d)(7).4 Governor
Our court reversed the district court’s dismissal of those suits on sovereign
4
immunity grounds. Ponca Tribe, 37 F.3d 1422 (10th Cir. 1994) (holding that neither the
Tenth nor the Eleventh Amendments barred the tribes’ suits against the states). The
Supreme Court’s decision in Seminole Tribe, 116 S. Ct. 1114, overruled our decision in
Ponca Tribe.
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King apparently refused to negotiate with any tribes during the remainder of his term as
Governor.
All but two of the Tribes commenced some form of class III gaming without
Tribal-State compacts. The Pueblo of Acoma began class III gaming in 1993. Pueblo of
Acoma Answers to Defs.’ First Set of Interrogs., Appellants’ App. Vol. V at A1617. The
Pueblo of Isleta began such gaming in 1990, Pueblo of Isleta’s Resps. to Defs.’ First Set
of Interrogs., id. at A1621; the Pueblo of Pojoaque began in 1992, Pl.’s Pojoaque Pueblo,
Resp. to First Set of Interrogs., id. at A1624; the Pueblo of San Juan in 1992, Pl. Pueblo
of San Juan’s Answers to Defs.’ First Set of Interrogs., id. at A1630; the Pueblo of Sandia
in 1986, Pl. Pueblo of Sandia’s Resps. to Defs.’ First Set of Interrogs., id. at A1633; the
Pueblo of Santa Ana in 1993, Pl. Pueblo of Santa Ana’s Resps. to Defs.’ First Set of
Interrogs., id. at A1644; and the Pueblo of Tesuque in 1992, Tesuque Pueblo’s Resp. to
Defs.’ First Set of Interrogs., id. at A1657-58. The Pueblo of San Felipe and the Pueblo
of Taos began class III gaming after they entered into compacts. Resp. to Defs.’ First Set
of Interrogs. to Pl. Pueblo of San Felipe Gaming Enter. Bd., id. at A1627; Pl. Pueblo of
Taos’s Resps. to Defs.’ First Set of Interrogs., id. at A1649-52. In May 1994, defendant
John Kelly, the U.S. Attorney, entered into non-prosecution agreements with the Tribes
who had already commenced gaming activities, agreeing not to take any enforcement
action provided the Tribes limit their gaming activities.
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Indian gaming became a significant campaign issue in the 1994 gubernatorial
campaign. Governor King was defeated for reelection by Gary Johnson, who had
publicly committed to signing Tribal-State compacts if elected Governor. At that same
election, voters approved a constitutional amendment authorizing a state lottery and
legalizing video gambling.5
Governor Johnson appointed Professor Fred Ragsdale to negotiate compacts with
various Indian tribes, and on February 13, 1995, he signed thirteen identical compacts.
The Secretary of the Interior approved twelve of the compacts on March 15, 1995, and
published notice of such approval in the Federal Register on March 22. The thirteenth
compact, between the Pueblo of Acoma and the State, was approved by the Secretary on
April 24, and notice was published in the Federal Register on May 15. Defendant Kelly
sent to the tribes letters dated March 21, stating in pertinent part:
The execution, approval and publication of your tribe’s compact should
bring it into compliance with applicable federal law. In any event, the
approval of the compacts constitutes a change in circumstances warranting
termination of the non-prosecution letter.
. . . [T]he letter of non-prosecution shall afford the tribe no protection with respect
to conduct occurring after the date of termination.
The New Mexico Supreme Court subsequently concluded that the amendment
5
was unconstitutional because it improperly conjoined two separate issues in one
amendment. State ex. rel. Clark v. State Canvassing Bd., 888 P.2d 458 (N.M. 1995).
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Montoya Aff. Ex. RM-15, Appellants’ App. Vol. II at A279; Vigil Aff. Ex. 1, id. at A325.
On July 1, 1995, the New Mexico Lottery Act became effective, creating a state-run
lottery. N.M. Stat. Ann. §§ 6-24-1 to -34.
The Tribes have spent varying amounts of money constructing new or improved
gaming facilities, and have implemented various tribal programs with existing gaming
revenues or in anticipation of such revenues.6 The economic impact of gaming on the
lives of Tribe members is significant, and gaming revenues are a major source of income
for the Tribes.
6
For example, the Pueblo of Santa Ana spent $1,265,275.00 to expand their
existing gaming facility, along with $2,786,950.00 for furnishings and equipment for the
expanded facility. Montoya Aff. at ¶ 19, Appellants’ App. Vol. II at A262-63. Joseph V.
Sanchez, Chairman of the San Felipe Pueblo Gaming Enterprise Board and previous
Governor of the San Felipe Pueblo, stated that the San Felipe Gaming Enterprise incurred
$17,266,869 in debt for the construction and expansion of a gaming facility, of which
“$16,723,869 was borrowed in reliance on the tribal-state compact.” Sanchez Aff. ¶¶ 19-
20, id. at A287. The Pueblo of Tesuque committed approximately $4.1 million “to
construction and equipment after Governor Johnson’s inauguration and the approval of
the Compact.” Vigil Aff. ¶ 9, id. at A319-20. The Pueblo of Isleta spent over $20 million
in connection with the construction of a resort/gaming/hotel complex. Lucero Aff. ¶ 4,
id. at A349-50. The Pueblo of Pojoaque borrowed or spent over $15 million dollars to
renovate and expand gaming and horse-racing facilities. Viarrial Aff. ¶¶ 5-8, id. at
A356-57. The Pueblo of Acoma borrowed $3.5 million to purchase class III gaming
equipment and casino furnishings. Shutiva Aff. ¶ 4, id. at A361. The Pueblo of San Juan
“invested approximately $2 million in buildings, furniture, fixtures, and equipment . . .
and has entered into various contracts exceeding $5 million for goods, services, and
gaming devices for the operation of Class III gaming under the Compact.” Garcia Aff.
¶ 2, id. at A364.
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III. New Mexico Supreme Court Decisions
The status of Indian gaming in New Mexico was considerably impacted by two
decisions of the New Mexico Supreme Court.
A. State ex. rel. Clark v. Johnson, 904 P.2d 11 (N.M. 1995)
On July 13, 1995, the New Mexico Supreme Court ruled that Governor Johnson
lacked the authority to sign the compacts on behalf of the state. State ex. rel. Clark v.
Johnson, 904 P.2d 11, 24 (N.M. 1995). The Supreme Court also held that “the
compact[s] and agreement[s] authorize[] more forms of gaming than New Mexico law
permits under any set of circumstances.” Id. at 21. The court reached its conclusion
about the Governor’s authority by examining both the state constitution and any relevant
state statutory authority. It held that neither source conferred upon Governor Johnson the
authority to enter into the compacts.
With respect to the New Mexico constitution and the doctrine of separation of
powers, the court held that the constitution “mandates that it is the Legislature that creates
the law, and the Governor’s proper role is the execution of the laws.” Id. at 22. Thus,
“[i]f the entry into the compacts reasonably can be viewed as the execution of law, we
would have no difficulty recognizing the attempt as within the Governor’s authority as the
State’s chief executive officer.” Id. However, if entry into the compacts “in fact
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conflict[s] with or infringe[s] upon what is the essence of legislative authority -- the
making of law,” the Governor exceeded his authority. Id.In examining the effect of the Governor’s entry into the compacts, the court
concluded that the compacts “preclude future legislative action” and “foreclose[]
inconsistent legislative action” because they “give the Tribe[s] a virtually irrevocable and
seemingly perpetual right to conduct any form of Class III gaming permitted in New
Mexico on the date the Governor signed the agreement.” Id. at 23. Furthermore, the
court concluded that the Governor’s entry into the compacts disrupted legislative
authority “because the compact strikes a detailed and specific balance between the
respective roles of the State and the Tribe in such important matters as the regulation of
Class III gaming activities, the licensing of its operators, and the respective civil and
criminal jurisdictions of the State and the Tribe necessary for the enforcement of state or
tribal laws or regulations.” Id. The New Mexico Supreme Court also held that, by
entering into compacts which authorized the Tribes to engage in “all forms of casino-style
games,” the Governor “contravened the legislature’s expressed aversion to commercial
gambling.” Id. at 24.
The court found further support for its conclusion by observing that, historically,
every other compact entered into between New Mexico and other sovereign entities was
accomplished through legislative enactment, which the Governor simply approved or
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vetoed. The court concluded these gaming compacts with Indian tribes should be handled
the same way.
The New Mexico court then considered whether any statutory authority supported
the Governor’s unilateral entry into the gaming compacts, and concluded that neither the
Joint Powers Agreements Act, N.M. Stat. Ann. §§ 11-1-1 to -7, nor the Mutual Aid Act,
N.M. Stat. Ann. §§ 29-8-1 to -3 authorized the compacts.7
B. Citation Bingo, Ltd. v. Otten, 910 P.2d 281 (N.M. 1995)
The second New Mexico Supreme Court decision relevant to this case was
Citation Bingo, Ltd. v. Otten, 910 P.2d 281 (N.M. 1995), decided in November 1995.
7
The Joint Powers Agreement Act authorizes “public agencies” to enter into
“agreements” with other public agencies. The statute defines “public agency” to include
“this state, an adjoining state or any state department or agency, [or] an Indian tribe or
pueblo.” N.M. Stat. Ann. § 11-1-2(A). Such public agencies are only authorized to enter
into agreements “[i]f authorized by their legislative or other governing bodies.” § 11-1-3.
The New Mexico Supreme Court held that “[t]his language plainly mandates that the
legislature must approve any agreement to which the State is a party.” Clark, 904 P.2d at
25.
The Mutual Aid Act permits any public agency, defined as including “the federal
government or any department or agency thereof, an Indian tribal council, Indian pueblo
council and the state or any county or municipality thereof,” N.M. Stat. Ann. § 29-8-2, to
enter into a “mutual aid agreement[]” with any other public agency “with respect to law
enforcement, provided any such agreement shall be approved by the agency involved and
the governor.” § 29-8-3. The New Mexico Supreme Court held that while the gaming
compacts included some provisions relating to law enforcement, not all of the compact
provisions related to law enforcement. Thus, it concluded that the Mutual Aid Act did
not provide the requisite authority for the compacts. Clark, 904 P.2d at 25-26.
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The specific issue before the court was “whether a hand-held electronic device known as
‘Power Bingo’ is a permissible piece of gaming equipment under the Bingo and Raffle
Act.” Id. at 281. In the course of its decision, however, the court made a number of
general statements about New Mexico’s gambling laws and policies. It began by
observing that it would “narrowly construe the terms of the [Bingo and Raffle] Act”
because such a construction was “consistent with this state’s policy against gambling.”
Id. at 282. It further noted that “[w]ith limited exceptions, gambling is a crime in New
Mexico.” Id. at 283. More significantly, the court stated as follows:
We take judicial notice of recent newspaper references to ‘the Las Vegas-
night law’ applicable to charities. While the record before this Court does
not reveal whether gambling devices traditionally found in casinos have in
fact been used in this state for gratuitous amusement or even to make bets,
we find no statutory authorization for any ‘Las Vegas-night’ gambling in
New Mexico. We are cited to no authoritative use of the term ‘lottery’ to
include casino-style gaming.
Id. at 283-84 n.2. The court also stated that “video, electromechanical, and computer
forms of specifically authorized games are against public policy.” Id. at 287.
DISCUSSION
We review de novo the grant of summary judgment, applying the same legal
standard as did the district court. Chiles v. Ceridian Corp., 95 F.3d 1505, 1510 (10th Cir.
1996); Pueblo of Sandia v. United States, 50 F.3d 856, 859 (10th Cir. 1995). We examine
the factual record and draw all inferences in favor of the party against whom judgment is
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granted. Orange v. District of Columbia, 59 F.3d 1267, 1270 (D.C. Cir. 1995). Under
Rule 56(c), summary judgment is appropriate “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” Fed. R. Civ. P. 56(c); see also Lowe v. Angelo’s Italian
Foods, Inc., 87 F.3d 1170, 1173 (10th Cir. 1996).
The Tribes argue that the compacts are valid and in effect, and that the district
court erred in determining that the compacts were void because the Governor lacked the
authority to sign them on behalf of the state. The United States argues that the compacts
are in effect under IGRA, but asserts that the class III gaming conducted by the Tribes
violates federal law, and is not conducted in compliance with IGRA, because New
Mexico prohibits such gaming “for any purpose by any person.”8 It thus urges us to
affirm the district court’s grant of summary judgment on this alternative ground. The
State, as counter-defendant, argues that the district court correctly held that the compacts
are void because invalid under state law, and it joins the United States in its argument that
the Tribes’ gaming activities are illegal under state law.
Amicus briefs have been filed by: (1) the States of Alabama, Arizona, California,
Florida, Hawaii, Idaho, Kansas, Massachusetts, Michigan, Nevada, Oklahoma, Rhode
8
The United States argues that the Tribes’ gaming violates the Johnson Act, 15
U.S.C. § 1175, the Organized Crime Control Act, 18 U.S.C. § 1955, and IGRA, 18 U.S.C.
§ 1166.
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Island, and Vermont in support of the State of New Mexico; (2) Max Coll and George
Buffet, citizens of New Mexico and legislators currently serving in the New Mexico
House of Representatives, and Guy Clark, a citizen of New Mexico who opposes the
spread of gambling, in support of the State and requesting that we immediately lift the
stay; and (3) the National Indian Gaming Association, the San Manual Band of Mission
Indians, the Shakopee Mdewakanton Sioux Community, and the Sisseton Wahpeton
Sioux Tribe, in support of the Tribes.
As we have indicated, in order for class III gaming to be exempt from the
application of federal and state criminal prohibitions, it must meet three conditions:
(1) there must be an approved tribal ordinance authorizing the class III gaming, 25 U.S.C.
§ 2710(d)(1)(A); (2) the gaming must be “located in a State that permits such gaming for
any purpose by any person, organization, or entity,” § 2710(d)(1)(B); and (3) there must
be a compact “entered into” by the tribe and the state which is “in effect.”
§ 2710(d)(1)(C). A compact “takes effect” when it is approved by the Secretary of the
Interior and notice of it is published in the Federal Register. § 2710(d)(3)(B). Failure to
comply with any one of the three conditions means the class III gaming is subject to
applicable criminal statutes.
The district court held that the compacts in question failed to meet the second
condition, in that the Governor’s lack of authority to bind the state rendered the compact
void, and the subsequent approval of the compacts and publication of notice in the
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Federal Register did nothing to give life to the void compacts. It reached this conclusion
by examining IGRA and conducting its own independent review of state law. It thus did
not reach the issue of whether the other two conditions were met.
I. Validity of Compacts
The district court held that the “entered into” and the “in effect” components of 25
U.S.C. § 2710(d)(1)(C) are essentially two separate requirements: (1) the compacts must
be validly “entered into” under applicable state law and (2) they must be “in effect”
pursuant to Secretarial approval and notice. The Tribes and the United States argue
approval by the Secretary is all that is required to make the compacts valid and in effect,
regardless of whether the compacts were valid under state law.9 The State agrees with
the district court that validity of the compacts under state law is an essential and separate
requirement under IGRA.
We hold that: (1) IGRA imposes two separate requirements--the State and the
Tribe must have “entered into” a compact and the compact must be “in effect” pursuant
to Secretarial approval--before class III gaming is authorized; (2) state law determines the
procedures by which a state may validly enter into a compact; and (3) in determining
9
It appears that the Pueblo of Acoma argues that, in fact, the Governor did have
authority to enter into the compacts. The other Tribes appear to argue that, in any event,
the Secretary’s approval cured any problem with the Governor’s execution of the
compacts.
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whether the State and the Tribes have entered into compacts, valid and binding under
New Mexico law, we agree with and follow the New Mexico Supreme Court’s decision
in Clark.
A. “Entered into” and “in effect” requirements
“‘In determining the scope of a statute, we look first to its language.’” United
States v. Silvers, 84 F.3d 1317, 1321 (10th Cir. 1996) (quoting United States v. Turkette,
452 U.S. 576, 580 (1981)). Thus, like the district court did, we first examine IGRA’s
language to determine whether the “entered into” and the “in effect” requirements are
separate or whether, as the Tribes urge us, Secretarial approval of the compacts, placing
the compact into effect under IGRA, is all that is necessary.
Section 2710(d)(1)(C) of IGRA permits class III gaming “conducted in
conformance with a Tribal-State compact entered into by the Indian tribe and the State
under paragraph (3) that is in effect.” The statute also states as follows:
The provisions of section 1175 of Title 15 shall not apply to any gaming
conducted under a Tribal-State compact that --
(A) is entered into under paragraph (3) by a State in which gambling
devices are legal, and
(B) is in effect.
§ 2710(d)(6). Both provisions separate the “entered into” requirement from the “in
effect” requirement, the latter provision more clearly than the former. IGRA
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unambiguously provides that a compact goes into “effect” when it is approved by the
Secretary and notice is published in the Federal Register. § 2710(d)(3)(B). It does not
define what is necessary for a tribe and state to “enter[] into” a compact, nor does it state
which branch of state government can or must sign a compact.10 Thus, the language of
the statute suggests that the “in effect” requirement establishes the date when the compact
becomes effective under IGRA, but arguably says nothing about whether a state has
validly entered into a compact.
The legislative history of IGRA provides some guidance. The Tribes argue the
district court “badly misinterpreted Congress’s intentions with respect to state
involvement in tribal Class III gaming.” Appellants’ Br. in Chief at 31. They argue that
the legislative history shows that the overriding purpose of IGRA was to promote tribal
self-sufficiency, and that Congress was “extremely reluctant to open the door to state
involvement in the regulation of gaming on Indian lands.” Id. As a result, so the
argument goes, a compact which was invalid under state law could nonetheless bind the
state under IGRA, so long as it receives Secretarial approval.
We do not agree that Congress expressed little concern for state interests when it
enacted IGRA. Indeed, the legislative history of the Act is replete with references to the
need to accommodate tribal and state interests:
10
IGRA does refer throughout only to the “State” as the party which can enter into
a Tribal-State compact. See also Ponca Tribe, 37 F.3d at 1437 (noting that “the state is
the only party that may enter into a compact with an Indian tribe”).
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This legislation is intended to provide a means by which tribal and State
governments can realize their unique and individual governmental
objectives, while at the same time, work together to develop a regulatory
and jurisdictional pattern that will foster a consistency and uniformity in the
manner in which laws regulating the conduct of gaming activities are
applied.
S. Rep. No. 100-446, at 6 (1988), reprinted in 1988 U.S.C.C.A.N. 3071, 3076. The
Senate Report described the tribal-state compacts as follows:
[T]he Committee concluded that the use of compacts between tribes and
states is the best mechanism to assure that the interests of both sovereign
entities are met with respect to the regulation of complex gaming
enterprises such as parimutuel horse and dog racing, casino gaming, jai alai
and so forth. The Committee notes the strong concerns of states that state
laws and regulations relating to sophisticated forms of class III gaming be
respected on Indian lands where, with few exceptions, such laws and
regulations do not now apply. The Committee balanced these concerns
against the strong tribal opposition to any imposition of State jurisdiction
over activities on Indian lands. The Committee concluded that the compact
process is a viable mechanism for setting various matters between two
equal sovereigns. . . .
In the Committee’s view, both State and tribal governments have
significant governmental interests in the conduct of class III gaming. . . . A
State’s governmental interests with respect to class III gaming on Indian
lands include the interplay of such gaming with the State’s public policy,
safety, law and other interests, as well as impacts on the State’s regulatory
system, including its economic interest in raising revenue for its citizens.
Id. at 13, reprinted in 1988 U.S.C.C.A.N. at 3083 (emphasis added).
While preservation of tribal sovereignty was clearly of great concern to Congress,
respect for state interests relating to class III gaming was also of great concern. We are
hesitant to conclude that Congress intended to permit a state to be bound by a compact
regulating class III gaming which it never validly entered. Cf. Seminole Tribe, 116 S. Ct.
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at 1119 (observing that IGRA “provides that an Indian tribe may conduct certain gaming
activities only in conformance with a valid compact between the tribe and the State”)
(emphasis added); see also Kickapoo Tribe of Indians v. Babbitt, 43 F.3d 1491, 1495
(D.C. Cir. 1995) (“Clearly, . . . the State of Kansas has an interest in the validity of a
compact to which it is a party. . . .”).
Several district courts have considered the effect, if any, of a subsequent
determination that the particular state representative who entered into the compact in fact
lacked the authority to do so. Two of the three courts have reached the same conclusion
as the three district courts in New Mexico--that a compact entered into by someone
without authority to bind the state is void and without effect, regardless of the Secretary’s
approval of the compact. Thus, they have implicitly concluded that validity of a compact
under state law is a separate requirement from Secretarial approval. See Narragansett
Indian Tribe of Rhode Island v. Rhode Island, Nos. 94-0618-T, 94-0619-T, 95-0034-T,
1996 WL 97856, at *2 (D.R.I. Feb. 13, 1996) (holding that a compact signed by the
Governor, who lacked authority under state law to sign the compact, “is void in the same
sense that any document executed without proper authority is void; namely, it has no legal
effect”); Kickapoo Tribe of Indians v. Babbitt, 827 F. Supp. 37, 46 (D.D.C. 1993)
(“[B]ecause only the Governor--a person without authority--signed the compact, the State
did not enter into the compact. Thus, the compact does not comply with § 2710(d)(8)(A)
and is invalid.”), vacated on other grounds, 43 F.3d 1491 (D.C. Cir. 1995); cf. Willis v.
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Fordice, 850 F. Supp. 523, 532-33 (S.D. Miss. 1994) (finding, in response to challenge to
Governor’s authority to enter into a compact, that the Governor in fact had the authority
under state law to enter into compact), aff’d, 55 F.3d 633 (5th Cir. 1995).11 But see,
Langley v. Edwards, 872 F. Supp. 1531, 1535 (W.D. La. 1995) (“Compact approval by
the Secretary cannot be invalidated on the basis of a governor’s ultra vires action,
because a contrary rule would compel the Secretary to consider state law before
approving any compact.”), aff’d, 77 F.3d 479 (5th Cir. 1996). We therefore conclude that
the “entered into” language imposes an independent requirement and the compact must be
validly entered into by a state before it can go into effect, via Secretarial approval, under
11
In Willis, the Secretary had approved the compact and notice had been published
in the Federal Register. Thus, IGRA’s “in effect” provision had been satisfied. The court
nonetheless examined whether the Governor had the authority under state law to sign the
compact. It is difficult to see why the court would examine that question unless it
believed that it was a separate requirement from Secretarial approval.
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IGRA.12 The Tribes make a number of arguments against this conclusion, and we address
each in turn.
12
The Tribes rely on several cases involving state retrocession of jurisdiction over
Indian reservations in support of their argument that the Secretary’s approval of the
compacts conclusively establishes their validity. See United States v. Lawrence, 595 F.2d
1149 (9th Cir. 1979); Omaha Tribe v. Village of Walthill, 334 F. Supp. 823 (D. Neb.
1971), aff’d, 460 F.2d 1327 (8th Cir. 1972); United States v. Brown, 334 F. Supp. 536 (D.
Neb. 1971).
The retrocession cases involved Congressional legislation, enacted in 1953,
permitting the transfer to states of jurisdiction over criminal and civil actions committed
or arising in Indian country located within a state’s borders. Its purpose was to encourage
Indians to become “first class citizen[s],” on the theory that “subjecting the Indian to
equality of the responsibilities of state law would make him equal in all respects to other
citizens of the state.” Brown, 334 F. Supp. at 538. Observing that it had failed to
accomplish its objective, Congress in 1968 partially repealed the legislation, and, inter
alia, authorized the United States to accept a retrocession from any state of all or any
jurisdiction acquired earlier by the state. Several states retroceded to the United States
jurisdiction over Indian lands within their borders, and the Secretary of the Interior
accepted the retrocession, only to have a subsequent challenge to the validity of the state’s
act of retrocession. The courts held that the Secretary’s acceptance of the retrocession
conclusively established the validity of the retrocession.
The district court distinguished those cases from the situation here, holding that
state retrocession “is a one-time event between the state and the United States;” that the
policy behind the retrocession statute strongly favored federal jurisdiction; that gaming
compacts are ongoing agreements imposing affirmative duties on the states; and that the
policy of finality, important to the retrocession statute, is less important to IGRA. Pueblo
of Santa Ana, 932 F. Supp. at 1295-97.
We agree with the district court that the retrocession cases involve different
considerations from this case, and do not control this case.
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1. Non-compact class III gaming under IGRA
The Tribes argue that the fact that IGRA contemplates tribes conducting class III
gaming even without a compact, if the State refuses to negotiate one or to accept one
proposed by a mediator, supports its argument that a valid compact is unnecessary. The
district court drew precisely the opposite conclusion from those provisions in IGRA, 25
U.S.C. § 2710 (d)(7)(B)(vii), and we agree with the district court’s interpretation.
As the legislative history makes clear, Congress was concerned about striking a
balance between the interests of tribes and of states in class III gaming. Thus, the Act
gives states multiple chances to negotiate a compact governing the conduct of such
gaming. As the district court observed, it is “[o]nly after rejecting several opportunities to
involve itself in the negotiation process [that] the Act terminate[s] the State’s opportunity
to participate.” Pueblo of Santa Ana v. Kelly, 932 F. Supp. 1284, 1293 (D.N.M. 1996).
Congress could have permitted Indian tribes to conduct any kind of gaming on Indian
lands without any involvement by states. The fact that it provided states with several
opportunities to become involved through the compacting process suggests Congressional
concern to permit state involvement if a state so desires. The fact that it permits such
gaming, if the other requirements of IGRA are met, when a state affirmatively refuses to
negotiate a compact in no way minimizes the importance of the compact process.
Similarly, to permit a state actor to purport to bind the state when in fact he or she lacks
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the authority to do so undermines the significance of the compact process as a means of
providing meaningful state involvement if a state so desires.
2. Finality
The Tribes also argue that the district court’s decision undermines finality and
forever subjects a compact to collateral attack on state law grounds. The United States
makes a related argument that the only way to challenge an approved compact is to ask
the Secretary to withdraw his approval, and to challenge his decision not to withdraw
approval under the Administrative Procedure Act, 5 U.S.C. §§ 701- 06. We are not
persuaded that the possibility of indefinite collateral attack is as real, or as dire, as the
Tribes claim it is. We need not reach the argument made by the United States because we
have held that, under IGRA, the existence of a valid compact is a requirement for
conducting class III gaming.
A compact is a form of contract. Texas v. New Mexico, 482 U.S. 124, 128 (1987)
(“‘[a] Compact is, after all, a contract’”) (quoting Petty v. Tennessee-Missouri Bridge
Comm’n, 359 U.S. 275, 285 (1959) (Frankfurter, J., dissenting)). As with any contract,
parties entering into one must assure themselves that each contracting party is authorized
to enter into the contract. There are familiar, and well-established, methods for obtaining
such assurance. In this case, as in the others in which the Governor’s authority to sign a
compact has been questioned, the challenge came promptly and was quickly resolved.
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Indeed, Governor Johnson signed the compacts in February 1995, they were approved by
the Secretary and published in the Federal Register in March 1995, a petition challenging
the Governor’s authority to sign the compacts was filed in April, and in mid-July of that
year (approximately 120 days following the Secretary’s approval) the New Mexico
Supreme Court unanimously declared that the Governor had lacked the authority to sign
them. See also Narragansett Indian Tribe, 1996 WL 97856 at *1 (court certified question
of Governor’s authority to sign compact within five months of signing of compact);
Langley, 872 F. Supp. at 1532 (court ruled on challenge to Governor’s authority within
three months of signing of compact); Kickapoo Tribe, 827 F. Supp. at 39 (Attorney
General filed suit seeking determination of Governor’s power to sign compact within
three weeks of signing it); cf. Willis, 850 F. Supp. at 524-25 (plaintiff filed action in state
court within ten months, and action in federal court within thirteen months of signing of
compacts). In practice, it appears that challenges are made quickly, and resolved
promptly.
Moreover, while we appreciate the enormous costs, both economic and human,
which the Tribes will incur if they must now close gaming facilities they currently operate
under these compacts, the Tribes must bear some responsibility for their dilemma,
because, as they conceded at oral argument, most of them commenced gaming well
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before these compacts were signed.13 In the face of the Tribes’ admittedly precipitous
conduct, their claimed need for finality now seems less tenable.
3. Secretarial inquiry into state law
The Tribes further argue that our interpretation places “the Secretary in an
untenable position, requiring that he determine with certainty whether or not a compact
presented for approval is fully ‘valid’ . . . that is, executed by a state official with actual
state law authority.” Appellants’ Br. in Chief at 20. We do not agree. IGRA makes it
clear that the Secretary must approve a compact within 45 days. 25 U.S.C.
§ 2710(d)(8)(C). We agree with the Tribes that Congress did not intend to force the
Secretary to make extensive inquiry into state law to determine whether the person or
entity signing the compact for the state in fact had the authority to do so. However, that
does not mean that consequences should not flow, such as a determination that the
compact is invalid, if it turns out that the state has not validly bound itself to the compact.
Indeed, as Secretary Babbitt said in a letter to Senator Jeff Bingaman of New Mexico,
concerning the compacts at issue in this case:
13
There has been a great deal of argument about whether, or to what degree, the
Tribes were aware of possible problems with the Governor’s authority to sign the
compacts. The record contains some evidence that the issue was raised, with the Tribes
and their counsel, prior to the signing of the compacts. See, e.g., Tackett Aff. ¶ 7,
Appellants’ App. Vol. IV at A1296; see also Appellants’ App. Vol. IV at A1300, A1309,
A1311; Gover Dep. at 21-22, id. at A1161, Appellants’ App. Vol. V at A1496; Yohalem
Dep. at 27-28, 57-72, id. at A1541, A1543-45.
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We agree that compacts between Indian tribes and states are valid only if
entered into by the appropriate State officials. However, given IGRA’s 45-
day time constraint and the automatic approval provision, we do not believe
that Congress contemplated that the Department would address or resolve
complex issues of State law raised by an internal challenge to a Governor’s
authority. In this regard, we must defer to the representations of Governors,
as the Chief Executive Officers of their states, unless it is clear beyond cavil
that a Governor lacks the authority to sign a compact.
Ex. 120, Appellants’ App. Vol. IV at A1271. As the Secretary observes, a compact is not
valid unless properly authorized, but the Secretary is not expected to resolve state law
issues regarding that authority in the 45-day period given to him to approve a compact.
4. Governor’s action merely voidable
The Tribes also assert that the Governor’s act of signing the compacts without
authority was merely a voidable act, which the Secretary in essence “cured” by approving
the compacts. The cases the Tribes cite as support for this argument are, however,
factually distinguishable, in that they involve an unauthorized act which was subsequently
ratified or approved by the body with clear authority to ratify or approve the action. See,
e.g., National Civil Serv. League v. City of Santa Fe, 370 F. Supp. 1128, 1132 (D.N.M.
1973) (if City Manager lacked authority to enter into contract, City Council subsequently
ratified the contract). They do not support the argument that a federal official can ratify
or authorize an unauthorized state actor’s conduct.
In sum, the Tribes’ arguments do not convince us that Secretarial approval of the
compacts is all that is necessary in order for the compacts to comply with IGRA.
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B. State law governs validity of compact
Another, but very closely related, issue about which the parties disagree is whether
federal law or state law, or both, govern the validity of a compact. We agree with the
courts in Willis, 850 F. Supp. at 532, and Kickapoo Tribe, 827 F. Supp. at 45-46 that
determining the validity of a compact necessitates an interpretation of both federal and
state law.
IGRA is a federal statute, the interpretation of which presents a federal question
suitable for determination by a federal court. Thus, we indisputably have the power to
determine whether a Tribal-State compact is valid. See West Virginia ex. rel. Dyer v.
Sims, 341 U.S. 22, 28 (1951) (“Just as this Court has power to settle disputes between
States where there is no compact, it must have final power to pass upon the meaning and
validity of compacts.”). However, that does not mean that state law plays no role at all in
the statute.
As we have held, IGRA imposes two requirements for a compact to authorize class
III gaming--the compact must be validly entered into by the state and the tribe, and it must
be in effect pursuant to Secretarial approval. The plain language of IGRA makes it clear
that Secretarial approval and publication places a compact “into effect.” However, IGRA
says nothing specific about how we determine whether a state and tribe have entered into
a valid compact. State law must determine whether a state has validly bound itself to a
compact. See Washington v. Confederated Bands and Tribes of the Yakima Indian
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Nation, 439 U.S. 463, 493 & n.39 (1979) (holding that section 6 of Pub. L. 280 (now
codified at 25 U.S.C. § 1324), authorizing “the people of any State to amend, where
necessary, their State constitution or existing statutes” to effect the transfer of civil and
criminal jurisdiction over Indian lands to the state, required the application of state law to
the procedural amendment requirement).14 We agree with the district court that IGRA’s
very silence on this point supports the view that “Congress intended that state law
determine the procedure for executing valid gaming compacts.” Pueblo of Santa Ana,
932 F. Supp. at 1294. Thus, the state and Tribe must be validly bound under state law.
C. Who decides state law issue
A final related question is whether we must independently decide whether the state
validly bound itself under state law, or whether we must follow the New Mexico Supreme
Court’s determination of that issue in Clark, or whether we need only give some
deference to the state court’s determination. The district court held that, under Sims, it
14
The Tribes attempt to distinguish Yakima by arguing that Pub. L. 280 provided
for “no federal approval, certification or ratification” of state action assuming
jurisdiction, but it provided general procedural requirements for such state action, and left
the specifics of those requirements up to state law. Appellants’ Reply Br. at 13. They
argue that IGRA, by contrast, involves only a federal act, the Secretary’s approval of the
compact, to put into effect the compact, and that it is that federal act alone which satisfies
IGRA’s procedural requirements. This ignores that fact that IGRA contemplates two
steps--the tribe and state “enter into” a compact, and the compact goes “into effect” when
approved by the Secretary. The requirement that a state “enter into” a compact is, in our
view, analogous to the procedural requirements set forth in Pub. L. 280.
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must independently review state law and determine whether the state was validly bound.
It reached the identical conclusion as the New Mexico Supreme Court--i.e., that the
Governor lacked the authority to sign the compact.
The Tribes conceded at oral argument of this case that Clark did indeed hold that
the Governor lacked the authority to enter into the compacts. They also conceded that we
are required, absent extraordinary circumstances, to accept that determination.15 They
simply argue it is irrelevant under IGRA, because Secretarial approval is all that is
necessary to make the compacts valid and binding. The State similarly argues we are
bound by the Clark decision. The question remains whether, despite these concessions,
we nonetheless are required by Sims, 341 U.S. 22 (1951), to independently examine state
law, albeit giving deference to the New Mexico Supreme Court’s decision, or whether we
simply accept that decision as the authoritative declaration of state law.
In Sims, West Virginia and seven other states had entered into a compact to control
water pollution by means of a commission with representatives from each of the states.
West Virginia’s legislature approved the compact, and attempted to appropriate funds as
part of the state’s contribution to the expenses of the commission. When the state auditor
15
Amicus National Indian Gaming Association and the tribes which have joined it
as amici argue that the Clark decision represented new law which cannot be applied
retroactively. The Tribes do not assert this argument, nor was it argued below, and we
therefore decline to address it. See Robertson v. Seattle Audubon Soc., 503 U.S. 429,
441 (1992); Knetsch v. United States, 364 U.S. 361, 370 (1960); United States v.
Singleton, 16 F.3d 1419, 1429 n.48 (5th Cir. 1994).
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refused to pay the appropriation, the West Virginia members of the commission, along
with others, brought an action in the West Virginia Supreme Court of Appeals, which
held that the legislative act approving the compact was invalid because it violated West
Virginia’s constitution. The Supreme Court, after independently reviewing West
Virginia’s law, reversed the state court, concluding that nothing in the compact offended
the state constitution. The Court did observe, however, that “[o]f course every deference
will be shown to what the highest court of a State deems to be the law and policy of its
State.” Id. at 28.
In our view, arguments exist supporting either reading of Sims--that Sims requires
us to independently examine state law, giving deference to the state court’s determination,
or that Sims requires us, in this particular case, to accept as binding the state court’s
determination. We need not explore that issue further, however, as a resolution of the
matter would not change the outcome of this case. Whether we give deference to the
New Mexico Supreme Court’s thorough and careful analysis of state law, or whether we
view ourselves as bound by it, we accept as determinative in this case the state court’s
decision on the question of whether the Governor of New Mexico had the authority,
under the New Mexico constitution or statutory law, to bind the state to the compacts.
That court unambiguously held that the Governor lacked the authority to bind the state to
the compacts. We agree with that decision. The compacts were therefore never validly
“entered into” by the state and, as a result, do not comply with IGRA.
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II. Other IGRA Requirements
Because we have held that the compacts do not comply with IGRA because the
state never validly entered into them, we need not address IGRA’s other requirements, in
particular whether, or to what extent, class III gaming is permitted in New Mexico.
CONCLUSION
For the foregoing reasons, the decision of the district court declaring that the
compacts pursuant to which the Tribes conduct class III gaming in New Mexico are
invalid is AFFIRMED. In so holding, we are acutely aware that while we have reached a
decision in this case, as we must, we have by no means solved an extremely difficult and
sensitive problem facing tribe members, citizens, and legislators in New Mexico. The
only hope for a satisfactory solution is through dialogue and good faith negotiation
between all involved parties. We hereby stay the mandate in this case, pending final
resolution of this matter, either in this court or the United States Supreme Court.
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