STATE OF IDAHO, a sovereign State of the United States v. COEUR D‘ALENE TRIBE, a federally recognized Indian tribe
No. 14-35753
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
July 22, 2015
Opinion by Judge Hawkins
D.C. No. 2:14-cv-00170-BLW; Argued and Submitted April 6, 2015—Seattle, Washington
OPINION
Appeal from the United States District Court for the District of Idaho
B. Lynn Winmill, Chief District Judge, Presiding
Before: Michael Daly Hawkins, Johnnie B. Rawlinson, and Consuelo M. Callahan, Circuit Judges.
Indian Gaming Regulatory Act / Preliminary Injunction
The panel affirmed (1) the district court‘s denial of a motion to dismiss the State of Idaho‘s action alleging that the Coeur d‘Alene Tribe‘s offering of Texas Hold‘em poker violated a Tribal-State Gaming Compact entered into under the Indian Gaming Regulatory Act, and (2) the district court‘s grant of a preliminary injunction.
The panel held that IGRA severed tribal sovereign immunity because Texas Hold‘em was explicitly prohibited by Idaho law and therefore was “Class III” gaming under
The panel held that venue was proper because the Compact permitted litigation as well as arbitration of disputes.
The panel concluded that its immunity analysis determined that Idaho was likely to succeed on the merits. The district court did not err in determining that the State would likely suffer irreparable harm to its economic and public policy interests if the Tribe were not enjoined from offering Texas Hold‘em in violation of IGRA and the Compact. The district court did not err in finding that the
COUNSEL
Joseph H. Webster (argued) and F. Michael Willis, Hobbs, Straus, Dean & Walker, LLP, Washington, D.C.; Howard Funke and Kinzo Mihara, Howard Funke & Associates, PC, Coeur d‘Alene, Idaho, for Defendant-Appellant.
Hon. Lawrence G. Wasden, Attorney General, Steven L. Olsen, Chief of Civil Litigation, Clay R. Smith (argued) and Tim A. Davis, Deputy Attorneys General, Boise, Idaho; Cally A. Younger, Office of the Governor, Boise, Idaho, for Plaintiff-Appellee.
Scott D. Crowell and Bruce Didesch, Crowell Law Offices, Tribal Advocacy Group, Sedona, Arizona; William Bacon, Office of the Reservation Attorney, Shoshone-Bannock Tribes, General Counsel, Fort Hall, Idaho, for Amicus Curiae Shoshone-Bannock Tribes.
HAWKINS, Circuit Judge:
The Coeur d‘Alene Tribe (“Tribe“) appeals the preliminary injunction prohibiting the Tribe from offering Texas Hold‘em (“Hold‘em“) poker. The Tribe argues that tribal sovereign immunity was not abrogated and that venue was improper under the terms of the Tribal-State Gaming Compact (“Compact“). We affirm because the Indian Gaming Regulatory Act (“IGRA“) severed tribal immunity and the Compact did not bar the litigation. Lastly, we affirm the grant of injunctive relief because the district court‘s findings were not clearly erroneous.
FACTUAL AND PROCEDURAL BACKGROUND
As this appeal hinges on the regulation of Indian gaming, we begin with a brief introduction to the IGRA. Congress passed the IGRA in 1988 “in order to provide a statutory basis for the operation and regulation of gaming by Indian tribes.” Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 48 (1996). “The Act divides gaming on Indian lands into three classes—I, II, and III—and provides a different regulatory scheme for each class.” Id. “Non-banking” card games (including poker) can be either Class II or Class III gaming, depending on the laws of the state in which the gaming takes place.1 See
Several years after Congress enacted the IGRA, the State and Tribe executed a Compact authorizing the Tribe to offer Class III gaming. The parties failed to reach accord on the scope of gaming allowed by Idaho law. The State argued that Idaho law only permitted the state lottery and parimutuel betting, while the Tribe countered that it allowed “all games that contain the elements of chance and or skill, prize and consideration.” The Compact authorized the parties to seek a declaratory judgment to resolve the dispute.
The Tribe filed suit in federal court in pursuit of such a declaration. The district court held on summary judgment that Idaho law only allowed “a lottery and parimutuel betting” and that “Idaho law and public policy clearly prohibit all other forms of Class III gaming, including the casino gambling activities which the Tribes have sought to include in compact negotiations with the State.” Coeur d‘Alene Tribe v. Idaho, 842 F. Supp. 1268, 1283 (D. Idaho 1994)
In March 2014, Idaho officials learned that the Tribe intended to offer Hold‘em at the Coeur d‘Alene Casino. Shortly after providing notice of non-compliance, the State filed a complaint and moved for a temporary restraining order and a preliminary injunction. The Tribe moved to dismiss pursuant to Rules 12(b)(1), (3), & (6), arguing that tribal sovereign immunity applies and that venue was improper.
The district court denied the motion for injunctive relief as moot, granted the Tribe‘s request to compel arbitration, stayed the litigation, and directed the parties to file a joint status report, concluding that the Compact prohibited the State from litigating at that juncture. The court “refrain[ed] from rendering an opinion” as to whether the parties could litigate the dispute if neither party invoked arbitration.
The joint status report informed the court that neither party had invoked arbitration and asked the court to decide the pending motion to dismiss. The court denied the motion to dismiss and granted a preliminary injunction, determining that the Tribe had elected to pursue litigation. The court concluded that the statute abrogated tribal immunity, and determined that an injunction was warranted because the State otherwise lacked effective remedies and the continued offering of unlawful gaming would cause irreparable harm. The Tribe filed timely notice of appeal.
JURISDICTION AND STANDARD OF REVIEW
“The general federal-question statute,
The existence of sovereign immunity is a question of law reviewed de novo. See Allen v. Gold Country Casino, 464 F.3d 1044, 1046 (9th Cir. 2006). The classification of Texas Hold‘em hinges on statutory interpretation, which is also reviewed de novo, see Schleining v. Thomas, 642 F.3d 1242, 1246 (9th Cir. 2011), as is the district court‘s venue ruling. Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 (9th Cir. 2010).
A preliminary injunction ruling “is subject to limited appellate review, and we will reverse only if the district court ‘abused its discretion or based its decision on an erroneous legal standard or on clearly erroneous findings of fact.‘” Nat‘l Wildlife Fed‘n v. Nat‘l Marine Fisheries Serv., 422 F.3d 782, 793 (9th Cir. 2005) (quoting United States v. Peninsula Commc‘ns, Inc., 287 F.3d 832, 839 (9th Cir. 2002)).
I. Tribal Sovereign Immunity
An Indian tribe is subject to suit only when Congress has abrogated the tribe‘s sovereign immunity by statute or when the tribe has waived its immunity. Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754 (1998). To abrogate immunity by statute, Congress must unequivocally express its intent to do so. See C & L Enters., Inc. v. Citizen Band Potawatomi Tribe of Okla., 532 U.S. 411, 418 (2001).
The relevant federal statute provides that “district courts shall have jurisdiction over . . . any cause of action initiated by a State or Indian tribe to enjoin a class III gaming activity located on Indian lands and conducted in violation of any Tribal-State compact. . . .”
In Bay Mills, the statute did not abrogate immunity because the conduct Michigan sought to enjoin was not located on Indian land and was not Class III gaming. 134 S. Ct. at 2032–34. Likewise, the Tribe contends here that the statute does not abrogate immunity because Hold‘em is Class II gaming and the Compact does not address it. Thus, the immunity inquiry necessarily requires the determination of whether Hold‘em qualifies as Class III gaming.
As discussed supra, non-banking card games are Class II gaming if they are either “explicitly authorized by the laws of the State” or “are not explicitly prohibited by the laws of the State and are played at any location in the State.”
The Idaho Constitution provides that “[g]ambling is contrary to public policy and is strictly prohibited. . . .”
The Tribe‘s interpretation would also force the specific prohibition on poker to yield to a general exception for “contests of skill.” See Morton v. Mancari, 417 U.S. 535, 550–51 (1974) (weighting the general in favor of the specific is impermissible, unless the drafters clearly intended the effect). The Tribe does not show that the legislature intended this effect.
Nor does the “promotional contests” exception authorize Hold‘em. In a handful of clearly distinguishable cases, courts have determined that gaming statutes permitting casino nights for charitable purposes establish that gaming is “explicitly authorized by the laws of the State” and that a Tribe may thus
Uneven enforcement of the poker prohibition does not convert Hold‘em into Class II gaming. Whether Hold‘em is “played at any location in the State” is largely irrelevant because the statute is conjunctive and one of the conditions is not satisfied. See
The Tribe next argues that the statute does not abrogate tribal sovereign immunity because the Compact only encompasses a subset of Class III gaming. We affirm because the Compact comprehensively addresses the full range of Class III gaming.
As discussed supra, Article 6.2 of the Compact only permits the lottery, parimutuel betting, and additional games that “may hereafter be authorized to be conducted in the State.” The parties disagreed as to the scope of gaming permitted and agreed to pursue a declaratory judgment, which Coeur d‘Alene I resolved by stating that no other gaming was permitted in Idaho.
Article 6.5 of the Compact squarely addresses this contingency in providing that, upon conclusion of the litigation, “[i]n the event the court(s) determines that no additional types of games are permitted in Idaho under the Act, the Tribe‘s gaming shall be limited to the gaming authorized in Article 6.2.” Articles 6.2 and 6.5 comprehensively address which Class III games are permitted and prohibited.
The Tribe argues that our decision in Cabazon Band of Mission Indians v. Wilson, 124 F.3d 1050 (9th Cir. 1997), shows that the Tribe did not violate the Compact. But the Compact in Cabazon only addressed parimutuel betting. Id. at 1059. Thus, we determined that slot machines were “not the subject of a Tribal-State compact.” Id. Here, in contrast, the Compact covers all Class III gaming. The finding that the Band did not breach the Compact “[b]ecause the slot machines . . . are not mentioned,” id. at 1060, does not apply
II. Venue
The Tribe argues that venue was improper because the Compact provides an exclusive dispute resolution mechanism. The court did not analyze the arbitration clause, instead concluding that the Tribe “decided it would prefer to litigate.” We affirm based on the Compact.8
The Compact permits litigation, provided neither party has given notice of its intent to pursue arbitration. It provides “[i]f the dispute is not resolved . . . within sixty days after service of the notice . . . either party may pursue binding arbitration to enforce or resolve disputes.” Tribal-State Gaming Compact at 27 (emphasis added). In contrast, the Compact contains an exclusive complaint mechanism. Id. Interpreting the contract “as a whole and every part . . . with reference to the whole,” Shakey‘s Inc. v. Covalt, 704 F.2d 426, 434 (9th Cir. 1983), the Compact contains a mandatory complaint mechanism and a permissive arbitration mechanism.
“To be mandatory, a clause must contain language that clearly designates a forum as the exclusive one.” N. California Dist. Council of Laborers v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034, 1037 (9th Cir. 1995). The arbitration clause does not clearly designate an exclusive forum. Rather, it provides that “both parties consent to binding arbitration as provided herein.” A clause in which parties consent to
Applying the principle of expressio unius est exclusio alterius, see Lares v. West One Bank (In re Lares), 188 F.3d 1166, 1169 (9th Cir. 1999) (citing Ace Realty, Inc. v. Anderson, 682 P.2d 1289, 1296 (Idaho Ct. App. 1984)), the clause providing arbitral exclusivity in a narrow circumstance supports the interpretation that litigation is not barred in other circumstances or in general. The Compact states that “[o]nce a party has given notice of intent to pursue binding arbitration . . . the matter in controversy may not be litigated in court.” The parties could have only logically intended that, absent such notice, litigation would be permitted. Otherwise, this clause would be meaningless surplusage, informing the parties that in addition to always barring litigation, the Compact also bars it when arbitration is invoked. See Wright v. Vill. of Wilder, 117 P.2d 1002, 1003 (Idaho 1941) (“[T]he various provisions of a contract or statute must be so construed (if possible) as to give force and effect to every part thereof.“).9
III. Preliminary Injunction
To obtain a preliminary injunction, the moving party “must establish that: (1) it is likely to succeed on the merits;
On the irreparable harm prong, the district court did not err in determining that the State would likely suffer irreparable harm to its economic and public policy interests if the Tribe were not enjoined from offering Hold‘em in violation of IGRA and the Compact. See Kansas v. United States, 249 F.3d 1213, 1228 (10th Cir. 2001). Purely economic harms are generally not irreparable, as money lost may be recovered later, in the ordinary course of litigation. Sampson v. Murray, 415 U.S. 61, 61–62, 89–92 (1974) (reversing injunction against firing of probationary government employee because loss of earnings is not irreparable harm). But, as the Tribe conceded at argument, the Tribe‘s sovereign immunity likely would bar the State from recovering monetary damages incurred during the course of this litigation due to the Tribe‘s violation of IGRA and the Compact. See
CONCLUSION
We affirm the district court‘s denial of the Tribe‘s motion to dismiss. The district court correctly determined that the elements of the statute were satisfied, such that the Tribe‘s sovereign immunity was abrogated. We affirm the court‘s venue ruling, although we do so on the basis of the terms of the Compact. Lastly, we affirm the grant of injunctive relief because the district court‘s findings are supported by the record.
AFFIRMED.
HAWKINS, Circuit Judge