Lead Opinion
Plaintiffs-Appellants Pueblo of Pojoaque and its governor, Joseph M. Talachy, (collectively “the Pueblo”) appeal from the district court’s dismissal of its claim for declaratory and injunctive relief based on the State of New Mexico’s alleged unlawful interference with Class III gaming operations on the Pueblo’s lands. Pueblo of Pojoaque v. New Mexico,
Background
The Pueblo of Pojoaque is a federally recognized Indian Tribe that operates two gaming facilities on its lands; the Buffalo Thunder Resort & Casino and the Cities of Gold Hotel & Casino. In July 2005, the Pueblo and New Mexico executed a Class III gaming compact pursuant to § 2710(d) of the Indian Gaming Regulatory Act (“IGRA”), 25 U.S.C. § 2701-2721, that allowed it to operate casino-style gaming on its lands. This compact expired on June 30, 2015.
Before its expiration, .the Pueblo sought to enter into a new compact with the State. After its initial efforts proved unsuccessful, the Pueblo sued New Mexico for failing to
The Pueblo then submitted a Class III gaming proposal to the Secretary of the Interior (“the Secretary”) pursuant to § 2710(d)(7) of IGRA and 25 C.F.R. § 291 (“Part 291”). IGRA allows the Secretary to establish Class III gaming procedures if a state refuses to agree to a compact, while the regulations in Part 291 indicated the Secretary could grant an Indian tribe permission to operate Class III gaming even without the state’s consent in situations where there is no agreement and the state has asserted immunity from suit.
In August 2014, the State sued the Department of the Interior (“DOI”), challenging' the Secretary’s authority to promulgate the regulations in Part 291, and the Pueblo intervened. On summary judgment, the district court held that the Part 291 regulations were invalid and barred the Secretary from taking any further action on the Pueblo’s request for the issuance of gaming procedures under the regulations. New Mexico v. DOI, No. 1:14-cv-00695-JAP/SCY,
On November 3, 2014, the Pueblo renewed compact negotiations with New Mexico. Again, meetings proved unsuccessful and no compact was reached.
Then, on February 26,' 2015, the New Mexico Gaming Control Board (“the Gaming Board”) sought to perform its annual compliance review of the Pueblo’s gaming operations in early November. But on May 6, the Gaming Board informed the Pueblo of its intent to conduct that review earlier (in advance of the expiration of the compact on June 30), and requested any and all contracts with gaming machine manufacturers, including lease, purchase, and service agreements. The Pueblo complied on June 24.
On June 30, 2015, the compact expired at midnight. That same day, the United States Attorney for the District of New Mexico stated that, although continued gaming operations after the expiration of the compact would violate federal law, he would withhold enforcement action for- the duration of the appeal in New Mexico v. Department of the Interior. The withholding of enforcement was conditioned on the Pueblo complying with the expiring compact and placing the funds it would otherwise pay the State in trust. The Gaming Board then announced that the U.S. Attorney’s decision allowing the Pueblo’s gaming operations to continue “provides no protection to banks, credit card vendors, gaming machine vendors, advertisers, bondholders, and others that are now doing business with an illegal gambling enterprise.” Pueblo of Pojoaque,
On July 15, 2015, the Gaming Board held a closed meeting to discuss issues regarding tribal gaming compliance. It then announced its conclusion that the Pueblo’s casinos were operating illegally due to the absence of a compact, and it placed in abeyance approval-of any license application or renewal for vendors who did business with the Pueblo. No other vendor’s applications were placed in abeyance.
Three days later, the Pueblo commenced this action, asserting in'.part that New Mexico failed to conduct compact negotiations in good faith in violation of IGRA and that individual defendants conspired under the color of state law to “deprive the feder
On September 9, 2015, the Gaming Board notified gaming manufacturer vendors doing business with the Pueblo that the Pueblo’s continued gaming operations violated federal law according to the U.S. Attorney. The Gaming Board indicated that it would conduct an audit of the vendors’ records to ensure compliance with state law and the Gaming Board’s regulations. Accordingly, the Board requested production of the vendors’ communications and business records with various casinos and tribal gaming operations, including the Pueblo’s two Class III gaming facilities.
On September 25, 2015, the Gaming Board cited all vendors doing business with the Pueblo. That same day, the Pueblo sought an injunction, contending that the Gaming Board’s issuance of letters and citations was an impermissible attempt to assert jurisdiction over gaming operations on tribal lands, despite the termination of New Mexico’s jurisdiction over such activities upon the expiration of the compact.
On October 7, 2015, the district court granted the preliminary injunction and enjoined the State “from taking any action that threatens, revokes, conditions, modifies, fines, or otherwise punishes or takes enforcement against any licensee in good standing with the New Mexico Gaming Control Board based wholly or in part on grounds that such licensee is conducting business with the Pueblo.” Pueblo of Pojoaque v. New Mexico, No. 1:15-cv-0625 RB/GBW,
Meanwhile, on October 21, 2015, the Gaming Board held a formal, public meeting, during which it considered 29 applications by vendors for gaming license renewals. The Board deferred all nine applications by vendors doing business with the Pueblo and did not set a date for future consideration. As for vendors not doing business with the Pueblo, the Board approved 18 applications, deferred one for a one-month period, and took no vote on another.
In response to the Gaming Board’s actions, the Pueblo urged the court to issue an order to show cause why the Board should not be held in contempt of court for violating the preliminary injunction. According to the Pueblo, the Board’s conduct in threatening those doing business with the Pueblo constituted an attempt to assert jurisdiction over gaming operations on Pojoaque lands. The district court denied the motion on April 21, 2016, holding that the Gaming Board’s license deferrals did not “threaten” the vendor applications within the meaning of the preliminary injunction. Pueblo of Pojoaque v. New Mexico, No. CIV 15-0625 JB/GBW,
The parties then filed additional motions, including the State’s and the individual defendants’ motions to dismiss, the rulings which form the basis of this appeal. Notably, the district court determined that the State’s interlocutory appeal of the preliminary injunction did not divest the district court of jurisdiction to proceed to the merits of the case. Pueblo of Pojoaque,
Given the relief obtained, the State voluntarily dismissed its appeal from the preliminary injunction. The Pueblo then sought to stay the district court’s judgment and restore the preliminary injunction. The district court declined to do so, but we entered and extended a temporary injunction against the State mirroring the preliminary injunction entered by the district court, i.e. “from taking any action that threatens, revokes, conditions, modifies, fines, or otherwise punishes or takes enforcement action against any licensee in good standing with the New Mexico Gaming Control Board based wholly or in part on grounds that such licensee is conducting business with the Pueblo of Pojoaque.” Order, Pueblo of Pojoaque v. New Mexico, No. 16-2228 (10th Cir. Mar. 14, 2017).
On appeal, the Pueblo argues that the district court did not have jurisdiction to proceed to the merits given the interlocutory appeal of the preliminary injunction and, even if it did, it erred in concluding that IGRA does not preempt New Mexico’s regulatory action. Our review is de novo. Dutcher v. Matheson,
Discussion
A. Jurisdiction
The parties dispute whether New Mexico’s appeal of the preliminary injunction divested the district court of jurisdiction. As we stated in Free Speech v. Federal Election Commission, where there is “an appeal from an order granting or denying a preliminary injunction, a district court may nevertheless proceed to determine the action on the merits.”
To argue otherwise, the Pueblo relies upon Stewart v. Donges,
B. Preemption
The parties dispute whether IGRA preempts the State’s actions that form the basis for the Pueblo’s suit. In response to the Supreme Court’s holding in California v. Cabazon Band of Mission Indians,
IGRA provides that Class III gaming activities “shall be lawful on Indian lands only if such activities are ... conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State [in which such lands are located] ... that is in effect.” 25 U.S.C. § 2710(d)(1)(C). An Indian tribe seeking a Class III gaming compact “shall request the State ... to enter into negotiations for the purpose of entering into a Tribal-State compact governing the conduct of gaming activities. Upon receiving such a request, the State shall negotiate with the Indian tribe in good faith to enter into such a compact.” Id. § 2710(d)(3)(A).
Only the federal government can impose criminal or other sanctions against allegedly-illegal gaming on tribal lands in the absence of a tribal-state compact. See 18 U.S.C. § 1166(d); United Keetoowah,
The Pueblo claims that IGRA preempts the regulatory action at issue. According to the Pueblo, the absence of a Tribal-State compact demonstrates that New Mexico has no regulatory authority on tribal lands. The Pueblo argues that the district court erred in conducting a traditional preemption analysis and in viewing this case as one that concerns actions performed outside of Indian territory. Even given a state’s “capacious” authority to regulate off-reservation Indian gaming, Michigan v. Bay Mills Indian Cmty., — U.S. —,
For the following reasons, we conclude that the district court properly applied the traditional preemption analysis to determine that IGRA does not preempt the State’s actions.
i. The Traditional Preemption Analysis Applies t
The Pueblo contends that a non-traditional, or Bracker, preemption analysis should apply—an argument New Mexico
In White Mountain Apache Tribe v. Bracker, the Supreme Court Held that federal law preempted Arizona’s taxation of the logging activities of non-Indians conducted exclusively within tribal land.
In Wagnon v. Prairie Band Potawatomi Nation, the Supreme Court reversed this court’s decision in Prairie Band Potawatomi Nation v. Richards,
As the Pueblo recognizes, the pertinent question is not from where the State is regulating, but whether the State is regulating Indian gaming on tribal lands. If New Mexico is regulating gaming on tribal land, then the Bracker balancing test applies. If not, then the traditional preemption analysis applies.
In the abstract, the Pueblo’s argument that the State is regulating gaming on tribal lands might have facial appeal. If New Mexico’s regulatory actions had the effect of shutting down gaming on Indian lands, then the State’s conduct is little different than if the' State had shut down the Indian gaming directly, which it indisputably cannot do. But the cases on which the Pueblo relies involve much more direct State regulatory action on Indian lands.
Thus, .the relevant inquiry is whether the indirect effects on . tribal gaming are sufficient to trigger , the Bracker preemption analysis. We find persuasive precedent in the Indian taxation context that has rejected indirect-consequence arguments and allowed the states to exercise authority even where doing so affects tribal activity on tribal lands.
Although the Supreme Court and this Court have characterized the preemption analysis for Indian taxation cases as unique, the reasoning for this unique analysis is that “this jurisprudence relies ‘heavily on the doctrine of tribal sovereignty ... which historically gave state law ‘no role to play within a tribe’s territorial boundaries.’” Wagnon,
But the relation to tribal sovereignty 's not unique to the Indian taxation context. Indeed, Indian gaming similarly implicates concern for tribal sovereignty. See, e.g., 28 U.S.C. § 2702(1) (characterizing Indian gaming as a “means of promoting tribal economic development, self-sufficiency, and strong tribal governments”); Bay Mills,
In Wagnon, the Supreme Court refused to perform the Bracker preemption analysis based on “downstream economic consequences” of a state tax that applied to non-Indians based on transactions involving the receipt of motor fuel outside of Indian lands.
We conclude that this same reasoning extends to the IGRA context, thereby demonstrating that the traditional preemption analysis applies. The dissent, however, argues that this reasoning requires consideration of the Supreme Court’s decision in Ramah Navajo School Board, Inc. v. Bureau of Revenue of New Mexico,
It is the existence of a comprehensive regulatory scheme, not merely the fact that the burden of the regulatory activity may fall on a tribe, that suggests preemption. See Bracker,
Further, the dissent, like the Pueblo, emphasizes the burdensome effect of the State’s regulatory action. Although the Pueblo alleges effects that are arguably more burdensome than those in the taxation cases, we find this to be a distinction without a difference on our facts. The State action only targets non-Indian gaming vendors’ transactions with non-Indian gaming operators, not the Pueblo—a critical fact that neither the Pueblo nor the dissent persuasively addresses. Because nothing prevents the vendors’ transactions with the Pueblo, this is quite unlike a state preventing a transaction by “stripping] a utility of its license for offering utilities to the Pueblo.” Dissent Op. at 1239. Accordingly, we think any downstream consequences on the Pueblo stemming from the State’s regulatory action at issue here are too attenuated to trigger Bracker balancing.
2. Traditional Preemption Analysis
The traditional preemption analysis looks to whether federal law expressly or implicitly preempts state law. Absent express preemptive language in the statute, Congress may implicitly preempt state law “where the scheme of federal regulation is so pervasive as to make reasonable inference that Congress left no room for the States to supplement it” (“field preemption”), or “where compliance with both federal and state regulations is a physical impossibility, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” (“conflict preemption”). Gade v. Nat’l Solid Wastes Mgmt. Ass’n,
IGRA does not expressly preempt state regulatory action that occurs off Indian lands. Rather, IGRA is intended to expressly preempt state regulation of gaming activity that occurs on Indian lands. See United Keetoowah,
IGRA also does not implicitly preempt the State’s off-reservation actions. Although it is not clear whether the Pueblo is arguing field preemption, it does not apply here. “Field preemption reflects a congressional decision to foreclose any state regulation in the area, even if it is parallel to federal standards.” Arizona v. United States,
Similarly, IGRA does not implicitly preempt the State’s actions based on conflict ’ preemption. As noted, conflict preemption exists where it is impossible to 'comply with both federal and state law, or where state law poses an obstacle to congressional objectives. But here it is not impossible to comply with both federal and state law, because there are no conflicting obligations for state licensees. Moreover, the licensees can continue doing business with the Pueblo (as no license is required), and the absence of a compact demonstrates that the State is without authority to take enforcement action to prohibit or penalize, such transactions. See 18 U.S.C. § 1166(d). The state action complained of also does not pose an obstacle to congressional objectives. The purpose of IGRA is to provide a statutory basis for both the operation and regulation of gaming by Indian tribes. See 25 U.S.C. § 2702. The Pueblo’s vendors are not prohibited from transacting business with the Pueblo. And any argument that the indirect effect on the Pueblo’s' gaming operations and revenues poses an obstacle to the goals of IGRA is not persuasive. The text of IGRA clearly evinces congressional intent that Class III gaming would not occur in the absence of a" compact, 25 U.S.C. § 2710(d)(1)(C), and no such compact presently exists. Accordingly, conflict preemption also does not apply.
For similar reasons, we reject the Pueblo’s argument that the Gaming Board’s determination as to the unlawful nature of the Pueblo’s gaming activities is an improper assertion of jurisdiction preempted by IGRA. New Mexico has not' applied state law, to conclude the Pueblo’s continued gaming activities are illegal. Despite the Pueblo’s contrary characterization, it is clear that “Class III gaming activities shall be lawful on Indian lands only if such activities are ... conducted in conformance with a Tribal-State compact.” Id. Because the Pueblo’s gaming activities are not conducted pursuant to a compact or an alternative mechanism permitted under IGRA, the Pueblo’s present gaming is unlawful under federal law, and the State’s conclusion to this effect was not an exercise of jurisdiction that IGRA preempts.
AFFIRMED. The temporary injunction against the Defendants entered by this court pending appeal-is dissolved.
Notes
. This court affirmed the decision of the district court during the pendency of this appeal. New Mexico v. DOI,
. The district court also determined that the Pueblo's claim for declaratory and injunctive relief "based on the Supremacy Clause” failed to state a claim because the Supremacy Clause alone is not a source of any federal
. E.g., Alabama v. PCI Gaming Auth.,
Dissenting Opinion
dissenting.
The majority concludes that under the Indian Gaming Regulatory Act, a state’s regulation of gaming on tribal land is
The threshold issue here is which test governs the preemption issue. The district court applied a traditional preemption test, concluding that New Mexico’s regulation of the Pueblo’s vendors is not preempted by IGRA. The Pueblo urges application of a stricter preemption test, which is outlined in White Mountain Apache Tribe v. Bracker, 448 U.S, 136,
To determine which test to apply, the majority asks “whether the State is regulating Indian gaming on tribal lands.” Maj. Op, at 1233. In my view, the majority’s framing of the issue would require us to apply the stricter preemption test outlined in Bracker. Because the district court did not apply that test, I would reverse and remand.
The majority’s contrary view is based on case law involving taxation of non-Indians in Indian country. In. that setting, we have held that “ancillary effects arising from enforcement of nondiseriminatory state laws outside Indian country” do not call for a more rigorous preemption analysis. Muscogee (Creek) Nation v. Pruitt,
We have regarded the effects as “ancillary” only when they were truly minimal. For example, in Muscogee (Creek) Nation v. Pruitt, we regarded the possible effects of Oklahoma’s cigarette taxation regime on the Muscogee Nation as ancillary with respect to
• the “ ‘minimal burdens’ on Indians to collect cigarette taxes from non-Indians for transactions occurring in Indian country” and
• the unavailability of certain brands of cigarettes in Indian country.
Muscogee Nation,
In determining whether to apply Bracker, neither the Supreme Court nor our court has ever drawn a rigid distinction based on the directness of the effect- on a tribe. To the contrary, the Supreme Court’s opinions on Indian taxation establish that Bracker may be triggered even when the burden on the tribe is indirect.
For example, the Supreme Court addressed this issue in Ramah Navajo School Board, Inc. v. Bureau of Revenue,
The Supreme Court found preemption of New Mexico’s assessment of the gross receipts tax on the Ramah Navajo’s construction firm. Preemption was necessary, the Court explained, because Bmcker was “indistinguishable in all relevant respects” even though the state had levied the tax outside Indian country, directly burdening only the non-Indian construction firm. Id. at 839, 843-44,
New Mexico had urged the Supreme Court to adopt a test under which the stricter preemption test would be used only when “the legal incidence and not the actual burden of the tax” falls in Indian country. Id. at 844,
[I]n [White Mountain Apache Tribe v. Bracker,448 U.S. 136 ,100 S.Ct. 2578 ,65 L.Ed.2d 665 (1980) ], we found it significant that the economic burden of the asserted taxes would ultimately fall on the Tribe, even though the legal incidence of the tax was on the non-Indian logging company. Given the comprehensive federal regulatory scheme at issue here, we decline to allow the State to impose additional burdens on the significant federal interest in fostering Indian-run educational institutions, even if those burdens are imposed indirectly through a tax on a non-Indian contractor for work done on the reservation.
Id.
New Mexico’s actions against the Pueblo involve regulation, not taxation. But, the majority’s reliance on Indian taxation cases would also require us to apply the reasoning from Ramah Navajo. Our case involves a “comprehensive federal regulatory scheme,” embodied in IGRA, like the regulatory scheme that triggered preemption in Ramah Navajo.
The majority attempts to distinguish Ramah Navajo on the ground that IGRA does not expressly regulate licensing for vendors and contemplates the coexistence of state and federal gaming regulation. Maj. Op. at 1235. I respectfully disagree with these efforts to distinguish Ramah Navajo.
There, the statutes were also silent on the tax at issue (a tax on a non-Indian firm’s construction of a school on Indian land). See Ramah Navajo,
The same is true here: Like the regulatory scheme in Ramah Navajo, IGRA does not directly address the particular matter at issue (a state’s licensing of gaming vendors). But IGRA’s preemptive sweep is broad, just like the regulatory scheme at issue in Ramah Navajo. See Gaming Corp. of Am. v. Dorsey & Whitney,
The majority also points out that IGRA contemplated the coexistence of some state and federal regulatory laws. Maj. Op. at 1235. This is true, but does not distinguish Ramah Navajo. Though state gaming laws
Ramah Navajo requires assessment of the effect of the state regulatory action on the Pueblo. See Cabazon Band of Mission Indians v. Wilson,
The district court was considering a motion to dismiss under Rule 12(b)(6). “[F]or purposes of resolving a Rule 12(b)(6) motion, we accept as true all well-pleaded factual allegations in a complaint and view these allegations in the light most favorable to the plaintiff.” Smith v. United States,
Under this standard, we must credit the Pueblo’s allegations in the complaint. These allegations state that New Mexico was targeting vendors in order to punish the Pueblo, resulting in major disruption to the Pueblo’s gaming operations. Complaint ¶¶ 73, 76, 78, 80. This targeting of vendors for a punitive purpose would constitute regulation of the Pueblo’s gaming activity on tribal land.
Suppose that the state strips a utility of its license for offering utilities to the Pueblo, forcing it to close gaming operations on tribal property. What is the difference between that sort of regulation and an order to stop gaming operations (which the majority acknowledges is impermissible)? Maj. Op. at 1233.
As alleged in the complaint, New Mexico is regulating Indian gaming on tribal land. This form of regulation triggers the more stringent preemption test in Bracker, which applies to state regulation of tribal gaming activity on Indian land. As a result, I would remand for the district court to reconsider preemption of New Mexico’s regulatory actions under the test outlined in Bracker.
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This appeal turns on what constitutes regulation of tribal gaming. The majority answers narrowly, stating that New Mexico is regulating Indian gaming only when the regulation is directly applied to Indian gaming on tribal land. In my view, this approach is unsupportable and unrealistic. Under the allegations in the Pueblo’s complaint, New Mexico is trying—with considerable success—to disrupt the Pueblo’s gaming operations by targeting the Pueblo’s vendors. This disruption is not softened by the state’s strategy of targeting vendors.
In reviewing the dismissal for failure to state a valid claim, I would conclude that IGRA preempts New Mexico’s regulations regardless of whether the regulations af-
. The majority states that the Bracker test arises in the context of state taxation. Maj. Op. at 1232-33. That is true, but the Supreme Court and our court have also applied Bracker in various other settings; See, e.g., New Mexico v. Mescalero Apache Tribe,