United States v. Santee Sioux Tribe ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
_____________
No. 97-1546
_____________
United States of America, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* District of Nebraska.
Santee Sioux Tribe of Nebraska, a *
Federally Recognized Indian Tribe, *
*
Appellee. *
_____________
Submitted: November 19, 1997
Filed: January 29, 1998
_____________
Before BOWMAN, BRIGHT, and MURPHY, Circuit Judges.
_____________
BOWMAN, Circuit Judge.
The United States appeals the judgment of the District Court denying the
government's request for an injunction and refusing to enforce the temporary closure
order of the Chairman of the National Indian Gaming Commission ("NIGC" or
"Commission") to prevent the Santee Sioux Tribe of Nebraska ("the Tribe") from
operating a gambling casino on the Tribe's reservation. We reverse.
I.
In 1988, Congress enacted the Indian Gaming Regulatory Act ("IGRA"), Pub. L.
No. 100-497, 102 Stat. 2467 (1988) (codified as amended at 25 U.S.C. §§ 2701-2721
(1994); 18 U.S.C. §§ 1166-1168 (1994)), which authorizes class III gaming activities
on Indian lands1 provided that such activities are permitted under a tribal "ordinance or
resolution," "located in a State that permits such gaming for any purpose by any person,
organization, or entity," and "conducted in conformance with a Tribal-State compact."
25 U.S.C. § 2710(d)(1).
In March 1993, the Tribe approached the State of Nebraska to engage in tribal-
state compact negotiations necessary under the IGRA to conduct class III gaming on the
Tribe's lands. After failing to reach an agreement with the State despite extended
negotiations, the Tribe opened a class III gaming facility on tribal lands in February
1996. This casino offered tribal members and the general public the opportunity to play
video slot machines, video poker machines, and video blackjack machines. In the same
month, the Tribe filed suit against the State of Nebraska and its Governor in district court
alleging failure to negotiate in good faith for a tribal-state compact. See id. § 2710(d)(3)
(negotiation of compact), (7) (jurisdiction of federal courts). The State asserted that the
Tribe's lawsuit was barred by the Eleventh Amendment and counterclaimed, alleging that
the Tribe was conducting class III gaming in violation of
1
At all times relevant to this litigation, the IGRA defined class I gaming as
"social games . . . for prizes of minimal value or traditional forms of . . . gaming" in
connection with tribal ceremonies, 25 U.S.C. § 2703(6); see also 25 C.F.R. § 502.2
(1997), class II gaming as "the game of chance commonly known as bingo . . .
including . . . pull-tabs, lotto, punch boards, tip jars, instant bingo, and other games
similar to bingo" and certain card games, 25 U.S.C. § 2703(7)(A); see also 25 C.F.R.
§ 502.3 (1997), and class III gaming as "all forms of gaming that are not class I gaming
or class II gaming," 25 U.S.C. § 2703(8) (including "slot machines . . . and
electromechanical facsimiles of any game of chance"); 25 C.F.R. § 502.4 (1997).
-2-
the IGRA. The State requested declaratory and injunctive relief as well as a temporary
restraining order to enjoin the Tribe's gaming activities. The District Court denied the
State's motion for a temporary restraining order, holding that the State could not use a
civil injunction to enjoin purportedly illegal activity, and that the State had failed to
establish that the Tribe's gaming activity constituted a public nuisance suitable for
injunctive relief.
On March 27, 1996, the United States Supreme Court decided Seminole Tribe v.
Florida, 517 U.S. 44 (1996), wherein the Court held that Congress lacked the authority
to enact the remedial sections of the IGRA allowing an Indian tribe to sue a state, and
that these sections comprised an unconstitutional abrogation of the states' sovereign
immunity. In light of this decision, the District Court dismissed the Tribe's suit against
the state of Nebraska and denied the Tribe's motion for a new trial.2
On April 25, 1996, the Chairman of the NIGC entered a notice of violation, see
25 C.F.R. § 573.3 (1996), and an order of temporary closure, see 25 U.S.C.
§§ 2705(a)(1), 2713(b); 25 C.F.R. § 573.6(11) (1996), informing the Tribe that, in the
absence of a tribal-state compact, its class III gaming activities were being conducted
in violation of the IGRA, and demanding that the Tribe close its gaming facility on or
before May 3, 1996. The Tribe requested and was granted expedited review before the
Chairman, who declined to amend his original conclusions regarding the violations but
issued a revised order extending the date for closure to May 5, 1996. The Tribe closed
its gaming facility on May 5, 1996, in compliance with this order, but filed an appeal of
the Chairman's order with the full Commission and with the District Court. In the
District Court, the Tribe prayed for an order declaring that the tribal-state compacting
provisions of the IGRA were unconstitutional and that the State permits class III
2
On appeal, we affirmed the District Court's dismissal of the Tribe's action
against the State. See Santee Sioux Tribe v. Nebraska, 121 F.3d 427, 432 (8th Cir.
1997).
-3-
gaming; and for an order enjoining the NIGC and the United States Department of
Justice from enforcing gaming laws against the Tribe. On June 28, 1996, the Tribe
reopened its gaming facility, which it has continued to operate during the pendency of
this lawsuit.
On July 2, 1996, the United States filed a complaint against the Tribe seeking
orders declaring that the Tribe's conduct of class III gaming violates federal and state
law, enforcing the Chairman's closure order, and enjoining the Tribe from conducting
class III gaming without a valid tribal-state compact. These lawsuits were consolidated
with the agreement of the two parties.
The District Court dismissed the Tribe's case on July 7, 1996, holding that the
Chairman's temporary closure order was not final agency action subject to judicial
review. The court likewise dismissed the government's case, holding that the United
States was not entitled to a civil injunction enforcing the Chairman's order (which,
although temporary, was still in effect) because the IGRA vested authority to enforce
such orders with the NIGC and its Chairman. The court also held that civil injunctive
relief could not be employed to enjoin the Tribe's purportedly illegal activities. Finally,
the court held that there was no statute granting the court authority to enjoin the Tribe's
gaming activities and that these activities had not been established as a nuisance
subjecting them to injunction under state law.
On July 31, 1996, the NIGC upheld on appeal the Chairman's order of temporary
closure, whereupon that order became final. Subsequently, on August 7, 1996, the
United States filed a motion with the District Court seeking leave to file a supplemental
pleading given that the NIGC had issued its final order. On December 31, 1996, the
District Court denied the government's motion and suggested that the United States was
empowered only to pursue criminal prosecution under the IGRA and that the NIGC had
"neither authorized nor directed the United States Attorney to attempt to enforce the
-4-
Commission's order by seeking a civil injunction." Memorandum Opinion & Order at
6 (Dec. 31, 1996).
The United States appeals the decision of the District Court refusing to enjoin the
Tribe's gaming activities and declining to enforce against the Tribe the closure order of
the Chairman of the NIGC.
II.
We initially must determine whether the United States, acting through the
Attorney General and her United States Attorneys, is entitled to maintain this action to
enforce the closure order issued by the NIGC. The government contends that the broad
grant of authority to litigate given to the Attorney General and her United States
Attorneys under 28 U.S.C. § 516 (1994) encompasses an action to enforce the NIGC's
closure order intended to prevent the Tribe's illegal gaming activity. Section 516
provides, "Except as otherwise authorized by law, the conduct of litigation in which the
United States, an agency, or officer thereof is a party, or is interested, . . . is reserved to
officers of the Department of Justice, under the direction of the Attorney General." The
Tribe, on the other hand, contends that the Attorney General has no authority under §
516 to enforce closure orders issued by the NIGC or its Chairman. We hold that the
Attorney General is empowered under § 516 to seek enforcement of the closure orders
of the NIGC.
The IGRA authorizes the Chairman of the NIGC to issue temporary closure orders
as well as to assess civil fines for violations of the Act, the NIGC regulations, or tribal
ordinances, see 25 U.S.C. §§ 2705(a)(1), 2713(a)(1), 2713(b)(1), and provides for
appeal of the Chairman's decisions to the full Commission, which may dissolve or make
permanent the Chairman's orders, see id. §§ 2706(a)(5), 2713(b)(2). The NIGC's final
orders are then appealable to the district court. See id. § 2713(c). Neither the
-5-
IGRA nor its accompanying regulations grants specifically to the NIGC or its Chairman
independent authority to litigate the agency's decisions. Nor does the IGRA address
specifically the Attorney General's authority to institute judicial proceedings on behalf
of the Chairman or the NIGC to enforce closure orders or assessments of civil fines.
Because the IGRA is silent with respect to the authority to conduct litigation
necessary to enforce the NIGC's closure orders in the event those orders are ignored or
its assessments are left unpaid by Indian Tribes engaging in gaming activities in violation
of the Act, we must assume that Congress intended for the Attorney General to conduct
this enforcement function on behalf of the agency.3 "Pursuant to 28 U.S.C. § 516, the
Attorney General has exclusive authority and plenary power to control the conduct of
litigation in which the United States is involved, unless Congress specially authorizes an
agency to proceed without the supervision of the Attorney General." United States v.
Hercules, Inc., 961 F.2d 796, 798 (8th Cir. 1992) (construing Attorney General's
authority under CERCLA to enter cost recovery settlement). Furthermore, the Attorney
General may file suit on behalf of the United States without specific statutory authority
whenever the United States has a justiciable interest. See United States v. Republic
Steel Corp., 362 U.S. 482, 492 (1960) ("The test [is] whether the United States [has] an
interest to protect or defend."). "[T]he statutory authority of the Attorney General to
control litigation is not diminished without a clear and unambiguous directive from
Congress." Hercules, 961 F.2d at 798; see also Federal Trade Comm'n v. Guignon, 390
F.2d 323, 324 (8th Cir. 1968) (noting that agencies can
3
We note that the United States Attorney appeared before the District Court and
announced his representation of the United States and all other named defendants in
this action without complaint from the Tribe. Furthermore, the District Court noted in
its Findings of Fact and Conclusions of Law at 2 (July 10, 1996) that although the
Tribe's complaint did not name the United States as a defendant and was filed only
against the named defendants including the NIGC, it was "actually a suit against the
United States as defendant." Again, the Tribe was not heard to complain of the court's
conclusion.
-6-
conduct their own litigation only when granted "specific authorization to proceed without
the advice, assistance or supervision of the Attorney General").
We cannot imagine that Congress intended to vest in the Chairman and the NIGC
the power to assess fines against the tribal operators of the facilities and to order
temporary closures of Indian gaming facilities operating in violation of the IGRA without
providing for a means to ensure compliance with those decisions. The IGRA's silence
on the matter of enforcement of the Chairman's closure orders compels our conclusion
that the broad authority to litigate granted to the Attorney General under 28 U.S.C. § 516
envisions the action taken here by the United States Attorney to enforce, on behalf of the
NIGC and the United States as an interested party, the Chairman's order demanding that
the Tribe close its gaming facility.
III.
Because we conclude that the United States has the authority to pursue this
litigation, we must next address the government's contention that the District Court
improperly refused to enforce the Chairman's closure order. We review the District
Court's analysis of federal statutory law de novo. See Rifkin v. McDonnell Douglas
Corp., 78 F.3d 1277, 1280 (8th Cir. 1996). The Chairman's closure order was based on
the absence of a compact between the Tribe and the State of Nebraska permitting the
conduct of class III gaming on the Tribe's lands, as required under the IGRA. It is
undisputed before this Court that the video slot, poker, and blackjack machines being
operated by the Tribe constitute class III gaming devices as defined under the IGRA.
Likewise, it is undisputed that the Tribe and the State of Nebraska have not entered into
a tribal-state compact to allow class III gaming on the Tribe's lands. The District Court
concluded, however, that, "[a]lthough it would appear that the Chairman's closure order
does remain in effect notwithstanding the Tribe's appeal of that order to the Commission,
I find that the United States is not entitled to civil injunctive relief
-7-
enforcing that order." Findings of Fact and Conclusions of Law at 9-10 (July 10, 1996).
The District Court reasoned that any civil remedy available under the IGRA for
violations of the Chairman's closure order was limited to the imposition of fines by the
Chairman under 25 U.S.C. § 2713(a), and that the government was empowered under
the IGRA to seek only criminal prosecution of violations of the Chairman's orders. We
conclude, however, that under 25 U.S.C. § 2713(a), the Chairman is authorized to assess
fines for violations of the IGRA itself, not for violations of closure orders entered under
the auspices of the IGRA, and that the United States may pursue injunctive relief to
ensure the Tribe's compliance with the Chairman's closure order.
Section 2713 of the IGRA, entitled "Civil penalties," grants the Chairman the
power to either levy and collect fines for "any violation" of any tribal regulation, any
provision of the IGRA, or any regulation prescribed by the NIGC, 25 U.S.C. § 2713(a),
or to issue orders of temporary closure for "substantial violation" of tribal regulations,
any provision of the IGRA, or any NIGC regulation, 25 U.S.C. § 2713(b). In the
Commission's regulations, temporary closure orders are included in the section entitled
"enforcement," 25 C.F.R. pt. 573 (1996) (covering notices of violation and orders of
temporary closure), while civil fines are in a separate self-titled section, see id. pt. 575
(1996) (covering how and when civil fines will be assessed, as well as settlements,
reductions, waivers, and final assessments). Section 575.4 of the NIGC regulations
addresses when civil fines will be assessed and does not include the imposition of fines
for non-compliance with the Chairman's closure orders.
The text of the statute distinguishing between the options available to the
Chairman for violations of the Act and its accompanying regulations, as well as the
regulations themselves classifying closure orders as an enforcement mechanism distinct
from the assessment of civil fines, indicates that the Chairman's authority to levy fines
was not intended as a means of enforcing closure orders. We conclude that the District
Court erred in refusing to enforce the Chairman's closure order on this basis.
-8-
IV.
The United States next argues that, because it was entitled to pursue this litigation
on behalf of the Chairman and the NIGC to stop the Tribe's illegal activity and because
the assessment of civil fines is not an option available under the IGRA to ensure
compliance with the Chairman's closure orders, the District Court erred in refusing to
issue an injunction enjoining the Tribe from the further conduct of class III gaming.
"[I]njunctive relief should not be considered unless the record shows 'a real threat of [a]
future violation [of the law] or a contemporary violation of a nature likely to continue or
recur.'" Webb v. Missouri Pac. R.R., 98 F.3d 1067, 1068 (8th Cir. 1996) (quoting
United States v. Oregon State Med. Soc'y, 343 U.S. 326, 333 (1952) (internal quotation
alterations in Webb)). Because the Tribe's gaming activities constitute a continuing
violation of Nebraska law made applicable in Indian country through the IGRA, we
conclude that the District Court erred in refusing to issue an injunction--a remedy
available under Nebraska law. See infra Part IV.B.
A.
The Tribe's gaming activities violate the IGRA because they are being conducted
in contravention of Nebraska law. Under the IGRA, an Indian tribe may engage in a
gaming activity on tribal lands only if that specific gaming activity is permitted under the
laws of the State where the tribal land is located. See 25 U.S.C. § 2710(d)(1)(B).4 The
IGRA also provides that "for purposes of Federal law, all State laws pertaining to
4
Section 2710(d)(1) of Title 25 of the United States Code provides that class III
gaming shall be permissible on Indian lands only if the activities are authorized by a
tribal ordinance or resolution; "located in a State that permits such gaming for any
purpose by any person, organization, or entity"; and "conducted in conformance with
a Tribal-State compact."
-9-
the licensing, regulation, or prohibition of gambling, including but not limited to criminal
sanctions . . . shall apply in Indian country in the same manner and to the same extent
as such laws apply elsewhere in the State." 18 U.S.C. § 1166(a) (emphasis added).
It is undisputed that the Tribe is operating video poker, blackjack, and slot
machines in its gaming facility. These forms of gambling are illegal in Nebraska, see
State ex rel. Spire v. Strawberries, Inc., 473 N.W.2d 428, 436 (Neb. 1991) (per curiam)
(labeling video poker, blackjack, and dice machines "gambling devices" within the
meaning of Nebraska Revised Statutes § 28-1101), because the possession or operation
of a "gambling device," including "any mechanical gaming device, computer gaming
device, electronic gaming device, or video gaming device which has the capability of
awarding something of value," is prohibited, Neb. Rev. Stat. § 28-1101(5) (1995); see
also id. § 28-1107 (1995). This language is incorporated into related Nebraska statutes
authorizing certain forms of gambling in the State. See id. §§ 9-204(2) (Supp. 1996)
(defining "bingo" to exclude any "mechanical gaming device, computer gaming device,
electronic gaming device, or video gaming device" and any activity prohibited under
Nebraska Revised Statutes Chapter 28, article 11); 9-411(2) (Supp. 1996), 9-507(2)
(Supp. 1996) (defining "lottery" to exclude "any gambling scheme which uses any
mechanical, computer, electronic, or video gaming device which has the capability of
awarding something of value" and any activity prohibited under Nebraska Revised
Statutes Chapter 28, article 11); § 9-312 (Supp. 1996) (defining "[l]ottery by the sale
of pickle cards" to exclude any activity prohibited under Chapter 28, article 11); see also
id. §§ 9-607(2) (Supp. 1996) (defining "lottery" to exclude "any gambling scheme which
uses any mechanical gaming device, computer gaming device, electronic gaming device
or video gaming device"), 9-701(1)(a) (Supp. 1996) (excluding from the definition of
"gift enterprise" "any . . . player-activated electronic or electromechanical facsimile of
any game of chance; or any slot machine of any kind"); 9-803(5)(b) (Supp. 1996)
("[l]ottery game shall not be construed to mean any video lottery game"). The
-10-
video gaming devices operated by the Tribe clearly fall within the definition of
prohibited "gambling devices" under Nebraska law and, by virtue of 25 U.S.C.
§ 2710(d)(1)(B) and 18 U.S.C. § 1166, are likewise prohibited under the IGRA.
The Tribe's argument that its gaming devices are permitted under the Nebraska
statutes is not well taken given the uniform prohibition of these devices under the State's
statutory scheme. As noted above, the State has consistently excluded from permitted
gambling activities the use of gaming devices similar to those operated by the Tribe. The
Tribe argues that, because the Nebraska Attorney General and the Nebraska Department
of Revenue have approved the use of a device known by the acronym "SLOTS"
(Selective Lottery Output Terminal System) to display keno results, the State has
approved the use of video gaming devices. This argument, however, fails to take into
account the fundamental difference between "SLOTS" and a traditional slot machine.
The "SLOTS" device is only a means of allowing keno players to view keno results, and,
unlike a slot machine, is not a means of conducting the game itself. See Opinion of
Nebraska Attorney General at 11 (Sept. 18, 1995).
Because the video gambling engaged in by the Tribe is not permissible under
Nebraska law, this activity is being conducted in violation of the IGRA, and the
contention of the United States that it is entitled to an injunction from the District Court
enjoining the further conduct of such activity by the Tribe is correct.
B.
In denying the government's request for injunctive relief, the District Court relied
on the maxim that equity generally will not enjoin the commission of a crime. See, e.g.,
11A Charles Alan Wright et al., Federal Practice and Procedure § 2942, at 70 (2d ed.
1995). As noted by the District Court, this general rule has three exceptions under
-11-
which an injunction will issue: 1) in cases of national emergency; 2) in cases of
widespread public nuisance; and 3) in cases where a statute grants a court the power to
enjoin a crime. See id. at 71-74. The government argues that the language of 18 U.S.C.
§ 1166(a), which makes "all State laws" pertaining to gambling applicable in Indian
country, encompasses the State's civil and criminal statutory and case law. According
to the government, "all State laws" necessarily includes Nebraska civil case law
authorizing injunctive relief to effectuate the closure of gambling establishments
determined under State law to be public nuisances. We agree.
The IGRA incorporates by reference "all State laws pertaining to the licensing,
regulation, or prohibition of gambling . . . in the same manner and to the same extent as
such laws apply elsewhere in the State," 18 U.S.C. § 1166(a), and does not distinguish
between case law and statutory law. The Rules of Decision Act, 28 U.S.C. § 1652
(1994), provides that the "laws of the several states . . . shall be regarded as rules of
decision in civil actions in the courts of the United States, in cases where they apply."
The United States Supreme Court has pronounced that "judicial decisions" are laws of
the state within the meaning of the Rules of Decision Act. Commissioner v. Estate of
Bosch, 387 U.S. 456, 464 (1967). We hold that the IGRA's incorporation of "all State
laws" includes both state statutory and case law.
In Strawberries, the Nebraska Supreme Court specifically held that a gaming
operation offering video gambling machines much like those operated by the Tribe
constituted a public nuisance under Nebraska law. See 473 N.W.2d at 435 (citing cases).
The Court further noted that an injunction is the proper remedy to protect "public rights,
property, or welfare, whether or not the acts complained of violate a criminal statute or
constitute a nuisance." Id. at 436. Injunctive relief may be granted by a court "where
there has been a continuing and flagrant course of violations of the law even though
these acts may be subject to criminal prosecution." Id.
-12-
Here, the Tribe's conduct of illegal gambling has been "continuing and flagrant"
and, although potentially subject to criminal prosecution by the United States under the
provisions of the IGRA, this activity is likewise subject to injunctive relief pursuant to
applicable Nebraska law. The Tribe's ongoing gambling activity constitutes a continuing
and flagrant violation of law that the District Court should have enjoined pursuant to
Nebraska law.
Because injunctive relief is available to halt illegal gambling activity under
Nebraska State law, see Strawberries, 473 N.W.2d at 436-37, this relief has been made
available under federal law by virtue of 25 U.S.C. § 1166, and the District Court erred
in refusing to grant the government's request for an order enjoining the Tribe's gaming
activities.
V.
The Tribe argues that because of the Supreme Court's determination in Seminole
Tribe that Congress was not empowered to authorize lawsuits by Indian tribes against
states that fail to negotiate in good faith for a tribal-state compact, all provisions of the
IGRA related to compacting are unconstitutional. We decline to address this argument
given our conclusion that, under the IGRA, the State is not required to negotiate for
gambling that is illegal under Nebraska law. See Cheyenne River Sioux Tribe v. South
Dakota, 3 F.3d 273, 279 (8th Cir. 1993) ("The 'such gaming' language of 25 U.S.C.
§ 2710(d)(1)(B) does not require the state to negotiate with respect to forms of gaming
it does not presently permit."); see also Citizen Band Potawatomi Indian Tribe v. Green,
995 F.2d 179, 181 (10th Cir. 1993) ("Congress must have meant that gambling devices
be legal [within state law] absent the Tribal-State compact; otherwise it would not have
been necessary to require both that gambling devices be legal, 25 U.S.C.
§ 2710(d)(6)(A), and that the compact be 'in effect,' id. § 2710(d)(6)(B)."). As we
already have determined, the class III gambling activities in which the Tribe is engaged
-13-
are illegal under Nebraska law, ruling out any duty on the part of the State to negotiate
a compact with the Tribe for such gambling.
VI.
The decision of the District Court is reversed and the case remanded for entry of
an order enjoining the Tribe's operation of class III gaming devices and enforcing the
Chairman's closure order.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT
-14-