330 F. Supp. 3d 269
D.C. Cir.2018Background
- Forest County Potawatomi Community (FCPC) and Wisconsin negotiated multiple Class III gaming compact amendments (1992, 1998, 2003, 2005); FCPC paid large lump sums and revenue shares in reliance on compact terms.
- A 2014 arbitration-selected amendment (the "2014 amendment") would require state Mitigation Payments to FCPC if a new Class III facility opened 30–50 miles away; the amendment anticipated the Applicant (Menominee) or other third parties would make those payments.
- Menominee sought approval to take land in Kenosha (≈33 miles from FCPC casino) into trust for Class III gaming; the Assistant Secretary approved that trust decision in 2013, subject to gubernatorial concurrence.
- FCPC submitted the 2014 amendment to the Assistant Secretary; the Assistant Secretary disapproved it in January 2015 on the ground it exceeded IGRA's permissible subjects for tribal‑state compacts.
- FCPC sued under the Administrative Procedure Act challenging the disapproval; Menominee intervened. The district court reviewed the administrative record and treated the matter as agency-review under the APA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IGRA's catchall ("directly related to the operation of gaming") is ambiguous and whether agency interpretation merits Chevron deference | Catchall is unambiguous and should be read broadly in tribes' favor under Indian‑law canons; agency rulings lack precedential force so no Chevron | Catchall is ambiguous; Assistant Secretary's interpretation is reasonable, fits IGRA's purpose, and merits Chevron deference | Court: provision ambiguous; Assistant Secretary's interpretation entitled to Chevron deference |
| Whether the 2014 amendment impermissibly makes one tribe (Menominee) liable for another tribe's (FCPC) lost revenues | Text names the State as responsible; FCPC says amendment is a state obligation under arbitration and thus permissible | Agency found that in practice Menominee would bear the obligation (only named Applicant, lockbox references, supporting letters); such inter‑tribal revenue guarantees exceed permissible compact subjects | Court: agency's factual and predictive determinations supported by the record; disapproval not arbitrary or capricious |
| Whether the 2014 amendment improperly covers non‑Class III revenue (Class II, hotel, food/beverage, entertainment) | Revenues from ancillary activities are related to and flow from Class III operations; catchall allows related subjects | IGRA contemplates compacts for Class III only; allowing Class II/ancillary coverage would expand state regulatory control beyond IGRA's design | Court: agency reasonably construed catchall as tied to Class III; amendment impermissibly covers non‑Class III revenues; disapproval upheld |
| Whether the Assistant Secretary failed to distinguish prior compact approvals (arbitrary change) | FCPC cites prior approvals/deemed approvals that allegedly allow similar protections/exclusivity | Agency distinguished prior compacts on material grounds (consent of affected tribes, different remedies, lack of off‑reservation applicant guarantees) | Court: agency provided adequate, reasonable distinctions; no arbitrary departure |
Key Cases Cited
- Amador County v. Salazar, 640 F.3d 373 (D.C. Cir. 2011) (describing Class III gaming examples)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (U.S. 1984) (agency deference framework)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (arbitrary and capricious standard)
- Gonzales v. Oregon, 546 U.S. 243 (U.S. 2006) (delegation and Chevron inquiry principles)
- U.S. v. Mead Corp., 533 U.S. 218 (U.S. 2001) (when Chevron deference is warranted)
- Rincon Band of Luiseno Mission Indians v. Schwarzenegger, 602 F.3d 1019 (9th Cir. 2010) (interpretation of IGRA catchall in context of IGRA purposes)
- Citizens Exposing Truth about Casinos v. Kempthorne, 492 F.3d 460 (D.C. Cir. 2007) (deference to IGRA‑context agency decisions)
- United States Sugar Corp. v. EPA, 830 F.3d 579 (D.C. Cir. 2016) (agency action arbitrary only if contrary to record)