LAC DU FLAMBEAU BAND OF LAKE SUPERIOR CHIPPEWA INDIANS, Plaintiff-Appellant, v. Gale NORTON and United States Department of the Interior, Defendants-Appellees, and Ho-Chunk Nation, Intervenor-Appellee.
No. 04-3571
United States Court of Appeals, Seventh Circuit
Argued March 31, 2005. Decided September 1, 2005.
422 F.3d 490
Kathryn E. Kovacs (argued), Department of Justice, Environment & Natural Resources Division, Washington, DC, for Defendant-Appellee Gale A. Norton.
Richard D. Humphrey, Office of the United States Atty., Madison, WI, for Defendant-Appellee United States Dept. of the Interior.
Lester J. Marston, Rapport & Marston, Ukiah, CA, for Intervenor-Appellee.
Before FLAUM, Chief Judge, and POSNER and EVANS, Circuit Judges.
FLAUM, Chief Judge.
1. The Indian Gaming Regulatory Act (“IGRA“),
2. The Lac du Flambeau Band of Lake Superior Chippewa Indians (“LDF“), another tribe in Wisconsin, filed this suit under the Administrative Procedures Act (“APA“) against the Secretary,1 challenging her decision to permit the amended compact to take effect. After Ho-Chunk intervened, it and the Secretary moved to dismiss the suit. The district court granted their motions, holding that LDF lacked standing and that the Secretary‘s action was not reviewable under the APA. The court also concluded that it was required to dismiss the case because Ho-Chunk was a necessary and indispensable party which, because of its sovereign immunity, could not be joined as a defendant. LDF appeals. For the reasons stated herein, we affirm.
A. The IGRA
3. Before turning to the pleadings, we briefly outline the IGRA‘s statutory scheme. The IGRA regulates gaming conducted by Indian tribes on their reservations or on lands held in trust for their benefit by the Secretary. The Act divides all gaming into three classes, regulating each class to varying degrees.
4. The IGRA imposes an additional layer of restrictions when a tribe seeks to conduct Class III gaming on lands that are neither within nor contiguous to the boundaries of its reservation. See
5. the Secretary . . . determines that a gaming establishment on newly acquired lands would be in the best interest of the Indian tribe and its members, and would not be detrimental to the surrounding community, but only if the Governor of the State in which the gaming activity is to be conducted concurs in the Secretary‘s determination.
6.
B. Factual Allegations
7. Because this is an appeal from a dismissal under
8. the State shall send a written notice . . . to [Ho-Chunk] that it has received a submission from the Secretary to concur in the Determination. . . . [T]he State shall not concur in the Determination if [Ho-Chunk] has notified . . . the State, within sixty (60) days of receipt of the Notice, that the operation of the Establishment will cause a substantial reduction . . . of Class III gaming revenues at any of [Ho-Chunk‘s] existing gaming facilities, unless the State has entered into a binding indemnification agreement with [Ho-Chunk] to compensate it for the Reduction or the mandatory negotiations required herein have concluded and the binding arbitration procedures required herein have commenced.
10. LDF is a federally recognized Indian tribe residing in Wisconsin. It currently has an application pending with the Secretary under
11. LDF then filed this suit against the Secretary, relying on the APA as the sole basis for subject matter jurisdiction. Plaintiff alleges that the Secretary violated her fiduciary duty to treat all Indian tribes equally by allowing the compact to take effect. Specifically, LDF‘s amended complaint states that the Secretary exceeded her authority “by granting the Ho-Chunk an affirmative right to be free from economic competition.” It seeks as a remedy, among other things, “an order declaring Paragraph 16 void.” Ho-Chunk, which was not named as a defendant, moved to intervene for the limited purpose of seeking to dismiss the suit. The district court concluded that Ho-Chunk had an interest in defending the compact and allowed the intervention. Ho-Chunk and the Secretary then moved to dismiss, and the court granted their motions on three grounds. First, the district court held that LDF had not alleged an actual or imminent injury, and therefore lacked standing to challenge the Secretary‘s action. It reasoned that one of several contingencies could occur to prevent LDF from being harmed by the anti-competitive provisions of the amended compact. Second, the court held that the APA‘s grant of judicial review did not extend to the Secretary‘s passive approval of the compact. Third, it concluded that because LDF sought to invalidate a portion of the compact, Ho-Chunk, as a signatory to that agreement, was a necessary and indispensable party. Because Ho-Chunk enjoys sovereign immunity, however, the district court concluded that it could not be joined as a defendant. Accordingly, the court held that dismissal was required by
II. Discussion
12. We review the district court‘s dismissal of LDF‘s amended complaint de novo. Centers v. Centennial Mortgage, Inc., 398 F.3d 930, 933 (7th Cir. 2005). “A court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.” Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229, 81 L. Ed. 2d 59 (1984).
13. Appellees argue that dismissal was proper because: (i) LDF lacks standing; (ii) the APA does not afford judicial review of the Secretary‘s action; and (iii) Ho-Chunk is a necessary and indispensable party which cannot be joined due to its sovereign immunity. As we explain below, LDF has standing to bring this suit. We hold, however, that plaintiff has forfeited any claim that the APA affords judicial review of the Secretary‘s decision. Accordingly, we do not address whether the suit must be dismissed under
14. The requirement of standing derives from the recognition that
15. First, the plaintiff must have suffered an injury in fact — an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of — the injury has to be fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the independent action of some third party not before the court. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.
16. Id. at 560-61 (internal citations and quotations omitted). “The party invoking federal jurisdiction bears the burden of establishing these elements.” Id. at 561. “[E]ach element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.” Id. “At the pleading stage, general factual allegations of injury resulting from the defendant‘s conduct may suffice, for on a motion to dismiss we `presum[e] that general allegations embrace those specific facts that are necessary to support the claim.‘” Id. (quoting Lujan v. Nat‘l Wildlife Fed‘n, 497 U.S. 871, 889, 110 S. Ct. 3177, 111 L. Ed. 2d 695 (1990)).
17. LDF alleges that the Secretary harmed it by allowing the anti-competitive provisions of the Tribal-State compact to take effect. Plaintiff, which currently has an application pending with the Secretary to open a casino outside of its reservation, can do so lawfully only if that application is approved by both the Secretary and Wisconsin.
1. Injury in Fact
18. The Secretary argues that LDF lacks standing because it has not adequately pleaded an injury in fact. Defendant asserts that any injury arising out of ¶ 16 of the amended compact is not particular to LDF because it will affect all Indian tribes in Wisconsin other than Ho-Chunk equally.
19. Defendant‘s argument is based on a flawed understanding of the particularity requirement. To confer standing, an injury must be “particularized,” meaning that it “must affect the plaintiff in a personal and individual way.” Defenders of Wildlife, 504 U.S. at 560 n. 1. In other words, “a plaintiff raising only a generally available grievance about government — claiming only harm to his and every citizen‘s interest in proper application of the Constitution and laws, and seeking relief that no more directly and tangibly benefits him than it does the public at large — does not state an Article III case or controversy.” Id. at 573-74. But the particularity requirement does not mean, contrary to the Secretary‘s interpretation, that a plaintiff lacks standing merely because it asserts an injury that is shared by many people. Fed. Election Comm‘n v. Akins, 524 U.S. 11, 23-25, 118 S. Ct. 1777, 141 L. Ed. 2d 10 (1998). “Often the fact that an interest is abstract and the fact that it is widely shared go hand in hand. But their association is not invariable, and where a harm is concrete, though widely shared, the [Supreme] Court has found `injury in fact.‘” Id. at 24. See also United States v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 687-88, 93 S. Ct. 2405, 37 L. Ed. 2d 254 (1973) (“[S]tanding is not to be denied simply because many people suffer the same injury. . . . To deny standing to persons who are in fact injured simply because many others are also injured, would mean that the most injurious and widespread Government actions could be questioned by nobody.“); cf. Defenders of Wildlife, 504 U.S. at 572 (finding no standing but distinguishing a hypothetical case “where concrete injury has been suffered by many persons“). LDF alleges that the Secretary‘s passive approval of the compact places it at a competitive disadvantage when seeking state approval for off-reservation gaming. This clearly amounts to a concrete injury. See Clinton v. City of New York, 524 U.S. 417, 433, 118 S. Ct. 2091, 141 L. Ed. 2d 393 (1998) (quoting Kenneth Davis & Richard Pierce, Administrative Law Treatise 13-14 (3d ed. 1994)) (“The [Supreme] Court routinely recognizes probable economic injury resulting from [government actions] that alter competitive conditions as sufficient to satisfy the [Article III `injury-in-fact’ requirement].“). That this injury may be shared by other tribes in Wisconsin does not undermine LDF‘s standing. We therefore reject the Secretary‘s particularity argument.2
20. Next, appellees argue that LDF has pleaded an injury that is at most conjectural, not actual or imminent. The Secretary and Ho-Chunk point to a number of contingencies that, as they see it, could prevent LDF from being harmed by the Tribal-State compact. For example, they argue that the compact could harm LDF only if Wisconsin decides to reject plaintiff‘s application for off-reservation gaming because of the State‘s duty to indemnify Ho-Chunk under that agreement. Appellees posit that Wisconsin might reject LDF‘s application for reasons unrelated to the compact, thereby averting the harm to plaintiff.
21. This argument misperceives the nature of the injury for standing purposes.
22. When the government erects a barrier that makes it more difficult for members of one group to obtain a benefit than it is for members of another group, a member of the former group seeking to challenge the barrier need not allege that he would have obtained the benefit but for the barrier in order to establish standing. The “injury in fact” in an equal protection case of this variety is the denial of equal treatment resulting from the imposition of the barrier, not the ultimate inability to obtain the benefit.
24. Under that approach, it is clear that a decision by Wisconsin to reject LDF‘s application for reasons unrelated to the compact would not avert the harm alleged by plaintiff. The harm is not LDF‘s “inability to obtain the benefit,” here, approval of its off-reservation gaming application. Rather, the harm lies in “the denial of equal treatment,” in this case, being forced to seek approval under the cloud created by the amended compact. The possibility that Wisconsin might reject LDF‘s application for legitimate reasons is therefore irrelevant to the standing analysis.
25. Appellees also argue that the compact is unlikely to harm LDF because there is no guarantee that the Secretary will approve LDF‘s application at all, much less anytime soon. Until the Secretary approves that application, defendant and Ho-Chunk assert that a possible rejection by Wisconsin is moot. See
26. LDF does not argue that the compact between Ho-Chunk and Wisconsin has tainted the Secretary‘s consideration of plaintiff‘s pending application. Thus, a denial of LDF‘s application by the Secretary, unlike a denial by Wisconsin, would prevent LDF from having to compete on an unlevel playing field. Nevertheless, we conclude that on a motion to dismiss, the chance that the Secretary might deny LDF‘s application does not render plaintiff‘s injury speculative.
27. First, we reiterate that “[e]ach element [of standing] must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of litigation.” Defenders of Wildlife, 504 U.S. at 561. A motion to dismiss for lack of standing should not be granted unless there are no set of facts consistent with the complaint‘s allegations that could establish standing. See Hishon, 467 U.S. at 73. Nothing in the amended complaint is inconsistent with the Secretary‘s prompt approval of LDF‘s application. While its pleading is silent on the point, LDF‘s appellate brief asserts that it filed its application with the Secretary in 2001. See Highsmith v. Chrysler Credit Corp., 18 F.3d 434, 439 (7th Cir. 1994) (when reviewing the grant of a motion to dismiss, “we will consider new factual allegations raised for the first time on appeal provided they are consistent with the complaint.“). It is fully consistent with the complaint‘s allegations to conclude that the Secretary has had ample time to review the application and will approve it shortly.
29. The President argued among other things that the City lacked standing to challenge the line item veto because HHS had yet to act on the State‘s pending waiver request. The Court disagreed: “[t]he State now has a multibillion dollar contingent liability that had been eliminated by . . . the Balanced Budget Act of 1997. . . . [T]he State, and [the City] `suffered an immediate, concrete injury the moment that the President used the Line Item Veto to cancel‘” the relevant section of the Balanced Budget Act. Id. at 430 (quoting district court). “The revival of a substantial contingent liability immediately and directly affects the borrowing power, financial strength, and fiscal planning of the potential obligor.” Id. at 431.
30. We applied similar reasoning in rejecting a challenge to the plaintiffs’ standing in Alliant Energy Corp. v. Bie, 277 F.3d 916 (7th Cir. 2002). There, an electric utility and its parent company raised Commerce and Equal Protection Clause challenges to statutes regulating the corporate structure of electric utilities in Wisconsin. Id. at 917. One of the contested regulations prohibited electric utility holding companies from selling 10% or more of their stock in a Wisconsin utility to a single person without prior administrative approval. The parent company‘s pleadings alleged that it would have sold more than 10% of the subsidiary‘s stock but for the challenged regulation, but did not identify a potential buyer or the price at which it intended to sell the stock. The district court dismissed the complaint for lack of standing, concluding that these vague allegations pleaded only a conjectural injury.
31. We reversed, finding it “easy to imagine facts consistent with this complaint . . . that will show plaintiffs’ standing, and no more is required.” Id. at 920. We reasoned that the plaintiff could establish a concrete injury even if it were unable to identify any potential buyers of its stock. “The 10% . . . limit[ ] interfere[s] with the competition for capital. An economist would say that [it] deprive[s] the firm of an option value — that is, of the power to sell a 10% bloc . . . in the event that step should prove to be profitable.” Id. at 921. Moreover, the option to “sell 10% of one‘s stock . . . has a positive value even if no one wants to buy today.” Id. “A firm with the ability to sell such blocs in the future, when conditions change, is worth more in the market today than a firm hamstrung by laws cutting off its opportunities. This difference in value supplies standing.” Id.
32. Likewise, it is easy to conceive of facts consistent with the complaint showing that LDF is harmed by the compact now, even if the Secretary‘s approval is uncertain. Plaintiff contends that it must court potential investors years in advance to make its planned casino a reality. Recognizing that the compact gives Wisconsin an incentive to reject LDF‘s application, potential lenders will see LDF‘s venture as a more risky, and therefore less attractive, investment. LDF will be forced to compensate for this risk by offering a higher rate of return. The increased cost of capital harms LDF now, whether or not the Secretary approves plaintiff‘s application.
34. None of these possibilities show that LDF has failed to plead an actual or imminent injury. Ho-Chunk admits that it operates six casinos within Wisconsin‘s borders. The amended compact authorizes Ho-Chunk to open three more, meaning that intervenor may be operating as many as nine facilities in the State by the time LDF presents its application to Wisconsin. Although the amended complaint and its attachments do not plead the precise location of Ho-Chunk‘s current or planned casinos, the compact requires Ho-Chunk to spread its facilities across six counties. Economic self-interest, moreover, might push Ho-Chunk to avoid clustering its casinos too tightly in any one location to prevent them from competing among themselves. It is therefore possible that Ho-Chunk‘s network of casinos extends throughout a substantial portion of the State, and that a new LDF casino would compete with one of them. Indeed, Ho-Chunk almost certainly understands this reality, and we therefore find it highly implausible that it would forego its right to be indemnified against lost revenues in the face of a pending application by another tribe.3 And while Wisconsin might choose to indemnify Ho-Chunk for revenues lost to a competing LDF casino, we find it unlikely that the State would do so without exacting some concession from LDF. More importantly, none of these contingencies shows that actual or imminent harm to LDF is inconsistent with the pleadings. Nor does our independent review of the amended complaint reveal that LDF has pleaded itself out of court on this element. Accordingly, LDF has sufficiently alleged an injury in fact.
2. Causation
35. Defendant and intervenor also contend that LDF lacks standing because it alleges a harm that was not caused by the Secretary. The causation element of standing demands that the injury be “fairly. . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the independent action of some third party not before the court.” Defenders of Wildlife, 504 U.S. at 560-61 (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41-42, 96 S. Ct. 1917, 48 L. Ed. 2d 450 (1976)). Appellees assert that plaintiff has not met this standard because Wisconsin and Ho-Chunk, not the Secretary, caused any injury suffered by LDF by negotiating the compact. Because neither Wisconsin nor Ho-Chunk are named or could be joined as defendants, appellees assert that plaintiff cannot establish causation.
36. While the Secretary may not be the only party responsible for the injury alleged here, a plaintiff does not lack standing merely because the defendant is one of several persons who caused the harm. See Warth, 422 U.S. at 504-05; Defenders of Wildlife, 504 U.S. at 562. That circumstance may make it more difficult, but not impossible, to establish causation. “When . . . a plaintiff‘s asserted injury arises from the government‘s” failure to regulate someone other than the plaintiff, causation “ordinarily hinge[s] on the response of the . . . regulable[] third party to the government . . . inaction.” Id. In such a case, causation depends on “choices made by independent actors not before the courts . . . and it becomes the burden of the plaintiff[ ] to adduce facts showing that those choices have been or will be made in such a manner as to produce causation.” Id. (internal citations and quotation omitted). LDF easily clears that threshold. In this case, the regulable third parties — Ho-Chunk and Wisconsin — have already made the choices that give rise to the potential harm by negotiating the compact. The Secretary‘s silent approval caused that potential to become a reality because, but for her approval, the compact would have no effect. See
38. We disagree. In this instance, the Secretary‘s silence was the functional equivalent of an affirmative approval. By saying nothing, the Secretary has allowed the parties to the compact to behave as if it were lawful in all respects. Had the Secretary rejected the compact, it would be clear to Ho-Chunk, Wisconsin, and potential investors in LDF‘s proposed casino that the anti-competitive provisions of the agreement have no legal effect. That
3. Redressability
39. The final challenge to LDF‘s standing turns on the element of redressability. Redressability “examines the causal connection between the alleged injury and the judicial relief requested.” Allen v. Wright, 468 U.S. 737, 753 n. 19, 104 S. Ct. 3315, 82 L. Ed. 2d 556 (1984). On a motion to dismiss, a plaintiff need only plead “that there is a `substantial likelihood’ that the relief requested will redress the injury claimed.” Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 75 n. 20, 98 S. Ct. 2620, 57 L. Ed. 2d 595 (1978).
40. The relief requested by LDF includes “[a]n order declaring Paragraph 16 void . . . thereby severing it from the Ho-Chunk compact.” Ho-Chunk argues that this relief is not a remedy that the IGRA affords and, because it cannot be granted, will not redress the alleged injury. Instead, intervenor contends, the IGRA authorizes the district court at most to remand the case to the Secretary with the instruction that she reconsider whether to approve the compact under the standards set forth in the statute. Ho-Chunk predicts that the Secretary, applying those standards, inevitably would reapprove the compact, affording LDF no relief.
41. This argument confuses standing with the merits. See ASARCO Inc. v. Kadish, 490 U.S. 605, 624, 109 S. Ct. 2037, 104 L. Ed. 2d 696 (1989) (quoting Warth, 422 U.S. at 500) (standing is a threshold inquiry that “in no way depends upon the merits of the [claim]“). Ho-Chunk‘s position relies upon one particular interpretation of the IGRA. But “the Article III requirement of remediable injury in fact. . . (except with regard to entirely frivolous claims) has nothing to do with the text of the statute relied upon.” Steel Co. v. Citizens for a Better Env‘t, 523 U.S. 83, 97 n. 2, 118 S. Ct. 1003, 140 L. Ed. 2d 210 (1998). Ho-Chunk does not assert, and we do not conclude, that LDF‘s position regarding the available remedies is frivolous. Redressability thus depends upon the relief requested, not the relief LDF could prove it was entitled to on the merits. Here, there is a substantial likelihood that the requested relief would alleviate the harm. A judicial declaration voiding ¶ 16 of the amended compact would terminate Wisconsin‘s duties under that provision. With no duty to indemnify Ho-Chunk, Wisconsin would have no incentive to reject LDF‘s application unfairly. Accordingly, LDF has pleaded a redressable injury, and it has standing to bring this suit.
B. Reviewability Under the APA
42. Generally, the APA confers upon persons “aggrieved by agency action” the right to seek judicial review of that action.
III. Conclusion
44. Although LDF has standing to bring this suit, it has forfeited any argument that the Secretary‘s actions are reviewable under the APA. Accordingly, we AFFIRM the judgment of the district court dismissing LDF‘s amended complaint.