Case Information
JFUNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA WEST FLAGLER ASSOCIATES et al. ,
Plaintiffs ,
v.
No. 21-cv-2192 (DLF) DEB HAALAND,
Secretary, U.S. Department of the Interior,
et al. ,
Defendants. MONTERRA MF, LLC et al. ,
Plaintiffs , v. No. 21-cv-2513 (DLF) DEB HAALAND,
Secretary, U.S. Department of the Interior,
et al. ,
Defendants. MEMORANDUM OPINION
In August 2021, the Secretary of the Interior approved a gaming compact between the State of Florida and the Seminole Tribe of Florida. The Compact authorizes the Tribe to offer online sports betting throughout the State, including to bettors located off tribal lands. In these related cases, the plaintiffs argue that the Compact violates the Indian Gaming Regulatory Act, the Unlawful Internet Gambling Enforcement Act, the Wire Act, and the Equal Protection Clause. They accordingly ask this Court to “set aside” the Secretary’s approval of the Compact pursuant to the Administrative Procedure Act. 5 U.S.C. § 706(2)(A).
Before the Court are the plaintiffs’ Motions for Summary Judgment in both the West Flagler case and the Monterra case, Dkt. 19 ( West Flagler ), Dkt. 37 ( Monterra ); the Tribe’s respective Motions to Intervene, Dkt. 13 ( West Flagler ), Dkt. 31 ( Monterra ); and the Secretary’s respective Motions to Dismiss, Dkt. 25 ( ), Dkt. 35 ( Monterra ). [1] For the reasons that follow, the Court will hold that the Compact violates IGRA and grant the West Flagler plaintiffs’ motion for summary judgment. Additionally, the Court will deny the Monterra plaintiffs’ motion as moot, deny the Tribe’s motions, and deny the Secretary’s motions.
I. BACKGROUND
A. Statutory Background
The Indian Gaming Regulation Act (IGRA) “creates a framework for regulating gaming
activity on Indian lands.”
Michigan v. Bay Mills Indian Cmty.
,
IGRA closely regulates the Secretary’s review of gaming compacts. To start, it provides
that the Secretary may disapprove a compact “only if [it] violates” another provision of IGRA,
“any other provision of Federal law that does not relate to jurisdiction over gaming on Indian
lands,” or “the trust obligations of the United States to Indians.”
Id.
§ 2710(d)(8)(B). IGRA also
provides that the Secretary must either approve or disapprove each compact within 45 days of
receiving it.
See id.
§ 2710(d)(8)(C). Otherwise, the compact shall “be considered to have been
approved by the Secretary, but only to the extent the compact is consistent with” IGRA. The
D.C. Circuit has squarely held, first, that these default approvals are “reviewable” in federal
court and, second, that the Secretary “must . . . disapprove” unlawful compacts.
Amador Cty. v.
Salazar
,
B. Factual Background
This case concerns a class III gaming compact between the State of Florida and the Seminole Tribe of Florida. See Compl. Ex. A (Compact), Dkt. 1-1 ( West Flagler ). Before the Compact took effect, Florida law prohibited wagering on “any trial or contest of skill, speed[,] power or endurance.” Fl. Stat. § 849.14 (2020). Although that prohibition contained a narrow exception for horse racing, dog racing, and jai alai, see id. § 550.155(1), it barred betting on all major sports, including football, baseball, and basketball, see id. § 849.14; also State of Fl. Amicus Br. at 1, 8, Dkt. 28 ( ). The Florida Constitution also limited the conditions in which the State could expand sports betting going forward. Fl. Const. art. X, § 30(a). Specifically, it provided that the State could only expand such betting through a “citizens’ initiative,” id. §§ 30(a)–(b), with the caveat that “nothing herein . . . limit[s] the ability of the state or Native American tribes to negotiate gaming compacts” under IGRA, id. § 30(c).
The compact in this case expanded the Tribe’s ability to host sports betting throughout the State. In relevant part, the Compact defines “sports betting” to mean “wagering on any past or future professional sport or athletic event, competition or contest,” Compact § III(CC); classifies “sports betting” as a “covered game,” id. § III(F); and authorizes the Tribe “to operate Covered Games on its Indian lands, as defined in [IGRA],” id. § IV(A). The Compact also provides that all in-state wagers on sporting events “shall be deemed . . . to be exclusively conducted by the Tribe at its Facilities where the sports book(s) . . . are located,” even those that are made “using an electronic device” “by a Patron physically located in the State but not on Indian lands.” Id. § III(CC)(2); see also id. § IV(A) (providing that “wagers on Sports Betting . . . shall be deemed to take place exclusively where received”). In this manner, the Compact authorizes online sports betting throughout the State. And because the State has not entered a similar agreement with any other entity, the Compact grants the Tribe a monopoly over both all online betting and all wagers on major sporting events. See Tribe’s Mot. to Intervene at 1–3, Dkt. 13 ( West Flagler ).
On June 21, 2021, the Secretary of the Interior received a copy of the Compact. Compl. Ex. F (Approval Letter) at 1, Dkt. 1-6 ( ). Because the Secretary took no action on it within forty-five days, id. , she approved the Compact by default on August 5, see 25 U.S.C § 2710(d)(8)(C). The next day, the Secretary explained her no-action decision in a letter to the Tribe. generally Approval Letter. The letter reasoned that IGRA allows the Tribe to offer online sports betting to persons who are not physically located on its tribal lands. at 6–8. To support that conclusion, the letter noted that IGRA allows states and tribes to negotiate the “allocation of criminal and civil jurisdiction,” 25 U.S.C. § 2710(d)(3)(c)(i)-(ii), emphasized that Florida consented to the Compact, and argued that “IGRA should not be an impediment to tribes that seek to modernize their gaming offerings.” Id. at 7. At the same time, the letter insisted that Florida residents could not place sports bets while “physically located on another Tribe’s Indian lands.” Id. at 8 & n.14 (emphasis added). To do so, it reasoned, would violate IGRA’s instruction that gaming is “lawful on Indian lands” only if such gaming is authorized by the “Indian tribe having jurisdiction over such lands.” (quoting 25 U.S.C. § 2710(d)(1)(A)(i)).
On August 11, the Secretary published notice of the Compact in the Federal Register. See Indian Gaming; Approval by Operation of Law of Tribal-State Class III Gaming Compact, 86 Fed. Reg. 44,037 (Aug. 11, 2021). At that point, the Compact took effect and acquired the force of law. See 25 U.S.C. § 2710(d)(3)(B). Pursuant to that Compact, as well as a Florida statute that implements its terms, see Fl. Stat. § 285.710(13)(b), online sports betting is now available in Florida. Although the Tribe initially represented that it would not offer such betting until November 15, see Pls.’ Mot. for Summ. J. Ex. C (Savin Decl.) ¶ 23, Dkt. 19-3 ( West Flagler ), it in fact launched online betting on November 1, Pls.’ Notice of Material Factual Development at 1 & Ex. A, Dkt. 39 ( ).
C. Procedural History
On August 16, plaintiffs West Flagler Associates and Bonita-Fort Myers Corporation brought a civil action to challenge the Secretary’s approval of the Compact. See West Flagler Compl. Both entities own brick-and-mortar casinos in Florida. Savin Decl. ¶¶ 3, 15. To establish Article III standing, they allege that the Compact’s allowance for online betting will divert business from their facilities. See id. ¶¶ 25–29. On the merits, they argue that the Compact’s authorization of online betting violates IGRA, the Unlawful Internet Gambling Enforcement Act (UIGEA), the Wire Act, and the Equal Protection Clause. Compl. ¶¶ 124– 28; Pls.’ Mot. for Summ. J. at 18–38, Dkt. 19 ( West Flagler ). Of these, their leading argument is that the Compact violates IGRA because it authorizes class III gambling outside of “Indian lands.” Pls.’ Mot. for Summ. J. at 18 (quoting 25 U.S.C. § 2710(d)(8)(A)).
On September 17, the Tribe moved to intervene for the limited purpose of filing a motion to dismiss. See Tribe’s Mot. to Intervene, Dkt. 13 ( West Flagler ). The Tribe argues that it may intervene as of right because it has an economic interest in the Compact and because the Secretary will not adequately protect that interest. See id. at 9–13; see also Fed. R. Civ. P. 24(a). The Tribe further argues that it is an indispensable party to this litigation, Fed. R. Civ. P. 19, but that its sovereign immunity prevents its joinder. See Tribe’s Proposed Mot. to Dismiss at 4– 11, Dkt. 13-4 ( West Flagler ). Finally, the Tribe argues that filing its motion to intervene did not waive its sovereign immunity. See id. at 5–6. To the contrary, it argues that “limited intervention [is] an appropriate mechanism through which parties may file motions to dismiss under Rule 19 . . . based on sovereign immunity.” Tribe’s Mot. to Intervene at 5. See also Tribe’s Mot. to Intervene, Dkt. 31, and Proposed Mot. to Dismiss, Dkt. 31-4 (raising the same argument in the Monterra litigation).
On September 27, Monterra MF and its co-plaintiffs filed a separate challenge to the Secretary’s approval. Compl., Dkt. 1 ( Monterra ). All but one of these co-plaintiffs live, work, or own property near Florida casinos. See id. ¶¶ 22–29. The remaining plaintiff, No Casinos, is a nonprofit organization that opposes the expansion of gambling in Florida. See id. ¶ 30. To establish Article III standing, these plaintiffs allege that the expansion of gambling in Florida will increase neighborhood traffic, increase criminal activity, and reduce their property values. Pls.’ Mem. in Supp. of Mot. for Summ. J. at 12, Dkt. 37-4 ( Monterra ). On the merits, they join the plaintiffs in arguing that the Compact’s online gambling rules violate IGRA, UIGEA, and the Wire Act. See id. at 15–23. They also argue that the Compact’s expansion of in-person gambling violates both the Florida Constitution and a separate provision of IGRA, which conditions the lawfulness of class III gaming on whether the state “permits such gaming for any purpose by any person, organization, or entity,” 25 U.S.C. § 2710(d)(1)(B). See id. at 23–28.
The West Flagler plaintiffs moved for summary judgment on September 21. Dkt. 19 ( West Flagler ). The Monterra plaintiffs followed suit on October 15. Dkt. 35 ( Monterra ). The Secretary then moved to dismiss both plaintiffs’ cases for lack of standing. See Gov’t’s Mot. to Dismiss at 8–17, Dkt. 25 ( West Flagler ); Gov’t’s Mot. to Dismiss at 8–15, Dkt. 35 ( Monterra ). The Secretary also argued that the plaintiffs failed to state a claim under IGRA, that IGRA does not require her to consider questions of state law, and that West Flagler’s constitutional argument fails. See Gov’t’s Mot. at 17–31 ( West Flagler ); Gov’t’s Mot. at 15–19 ( Monterra ). The Secretary did not, however, address whether the online gaming contemplated by the Compact occurs on or off “Indian lands,” 25 U.S.C. § 2710(d)(8)(A).
On November 5, the Court held a hearing on the above motions. [2] The cases are now ripe
for review.
II. LEGAL STANDARD
A court grants summary judgment if the moving party “shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a);
see also Anderson v. Liberty Lobby, Inc.
,
In an Administrative Procedure Act case, summary judgment “serves as the mechanism for deciding, as a matter of law, whether the agency action is supported by the administrative record and otherwise consistent with the APA standard of review.” Sierra Club v. Mainella , 459 F. Supp. 2d 76, 90 (D.D.C. 2006). The Court will “hold unlawful and set aside” agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” 5 U.S.C. § 706(2)(A), “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right,” id. § 706(2)(C), or “unsupported by substantial evidence,” id. § 706(2)(E).
III. ANALYSIS
A. West Flagler Has Article III Standing
Before reaching the merits of either action, this Court must first determine whether at
least one plaintiff has Article III standing.
See Steel Co. v. Citizens for a Better Env’t
, 523 U.S.
83, 94–95 (1998). To establish standing, a plaintiff must demonstrate that he has suffered an
“injury in fact” that is “concrete and particularized” and “actual or imminent, not conjectural or
hypothetical.”
Lujan v. Defs. of Wildlife
,
Under the “basic law of economics,”
New World Radio, Inc. v. FCC
,
Here, West Flagler alleges that the Compact “will divert business that would have been
spent at [its facilities] and cause it to be spent on online sports gaming offered by the Tribe.”
Savin Decl. ¶ 25. In its view, this diversion will occur because some customers “will prefer the
ease of online gaming” to gaming in-person at West Flagler’s casino.
Id.
That prediction is
reasonable and hardly “speculative.”
Lujan
,
The Secretary’s objections to standing do not persuade.
First, West Flagler’s survey supports its bottom-line conclusion. Although the Secretary
challenges the survey’s methodology,
see
Gov’t’s Mot. at 10–15 ( ), West Flagler
retained an expert to both design the survey’s approach and defend it in exacting detail,
see
Chavez Decl. at 3–7. Many of the Secretary’s objections to that approach lack any merit.
[3]
And
even if they had merit, each of them concerns only to the “magnitude” of West Flagler’s
competitive injury, “which has no bearing on whether it [] established Article III standing.”
Ipsen Biopharmaceuticals
,
Second, West Flagler’s injury does not “depend[] on [its] own business decisions.” Gov’t’s Mot. to Dismiss at 15. It is true that West Flagler could offer sports betting in its casino by partnering with the Tribe. See id. But West Flagler has shown a substantial probability that this partnership would leave it less profitable than it was before. Savin Decl. ¶¶ 34–38. Under the partnership, the Tribe would place sports-betting kiosks in West Flagler’s casino and receive up to 40% of the revenue that the kiosks generate. See Compact § III(CC)(3)–(4); Savin Decl. ¶ 36. That arrangement would both require substantial upfront investments and substantially decrease the average, long-term yield from the games West Flagler offers. See Savin. Decl. ¶¶ 34, 36–37. For those reasons, forcing West Flagler to choose between entering the partnership and losing further competitive ground is itself an injury. That injury is amplified by the Secretary’s earlier suggestion that this kind of partnership may independently violate IGRA. [4] Approval Letter at 11–12. And in any event, even if West Flagler could offer in- person sports betting on the same terms as the Tribe, its inability to host online sports betting would still create a competitive injury. See supra.
For the reasons above, the Court finds that West Flagler has adequately established a
competitive injury. It also finds that this injury was both caused by the conduct challenged in
this action and redressable by a favorable decision on the merits.
See Lujan
,
This Court need not address whether the other plaintiffs in these actions have standing.
As a general matter, “the presence of one party with standing is sufficient to satisfy Article III’s
case-or-controversy requirement.”
Rumsfeld v. F. for Acad. & Institutional Rts., Inc.
, 547 U.S.
47, 52 n.2 (2006). Although the
West Flagler
and
Monterra
suits raise different claims, they
seek the same relief—principally, the vacatur of the Secretary’s default approval. Compl. at
42 (
West Flagler
); Compl. at 37, Dkt. 1 (
Monterra
). And because the Court will grant that relief
in the action, it has no occasion to consider the separate arguments in the
Monterra
filing, let alone whether the
Monterra
plaintiffs independently have Article III standing.
See
Louie v. Dickson
,
B. The Tribe Is Not an Indispensable Party
Next, the Court must resolve the Tribe’s motion to intervene,
see
Dkt. 13, and motion to
dismiss, Dkt. 13-4. As both parties acknowledge, federal courts disagree on whether a
sovereign may intervene in an action while preserving its sovereign immunity.
Compare
,
e.g.
,
Cnty. Sec. Agency v. Ohio Dep’t of Com.
,
The Federal Rules of Civil Procedure require joining each person that has “an interest
relating to the subject of the action” if that person is subject to suit and if “disposing of the action
in [his] absence” might “impede the person’s ability to protect the interest.” Fed. R. Civ. P.
19(a)(1)(B)(i). The Tribe is a “required party,” in this respect, because it “has an interest in the
validity of [its] compact . . ., and [its] interest would be directly affected by the relief that [West
Flagler] seeks.”
Kickapoo Tribe of Indians of Kickapoo Rsrv. in Kansas v. Babbitt
, 43 F.3d
1491, 1495 (D.C. Cir. 1995). The Federal Rules further provide that, if a required party “cannot
be joined,” the court must “determine whether, in equity and good conscience, the action . . .
should be dismissed.” Fed. R. Civ. P. 19(b). In this case, the Tribe cannot be joined because it
“enjoys sovereign immunity.”
Kickapoo Tribe
,
Federal Rule 19(b) lists four factors that bear on whether a party is indispensable. Fed. R. Civ. P. 19(b). They are, first, “the extent to which a judgment rendered in the person’s
absence might prejudice that person or the existing parties;” second, “the extent to which any
prejudice could be lessened or avoided;” third, “whether a judgment rendered in the person’s
absence would be adequate;” and fourth, “whether the plaintiff would have an adequate remedy
if the action were dismissed for nonjoinder.” Although the Federal Rules present these
factors as non-exclusive, the D.C. Circuit has held that “there is very little room for balancing of
other factors” where a necessary party is immune from suit.
Kickapoo Tribe
,
Beginning with the first factor, resolving this case in the present posture would not
prejudice the Tribe.
See
Fed. R. Civ. P. 19(b)(1)–(2). Although the Tribe argues that this case
implicates its sovereign immunity, Proposed Mot. to Dismiss at 8–9, the Tribe is not a party
to this case, and the plaintiffs make no attempt to bind either the Tribe or its agents.
Wuterich v. Murtha
,
Moreover, although the Tribe has a financial interest in the Compact, it is unclear how
proceeding in its absence would harm that interest. The first factor in Rule 19(b) asks whether a
party suffers prejudice from the fact that an adverse decision is “rendered in [its] absence,” not
simply from the fact that a decision is adverse. Fed. R. Civ. P. 19(b)(1);
see also
Fed. R. Civ. P.
19(a)(1)(B)(i) (similarly asking whether “a person’s absence may . . . impair or impede [his]
ability to protect [an] interest”). Here, the Tribe’s absence is not prejudicial because both the
Secretary and the State of Florida have defended the Compact on its merits. Gov’t’s Mot. to
Dismiss at 17–31; Fl. Amicus Br., Dkt. 28; Gov’t’s Suppl. Memo, Dkt. 41 (all
West Flagler
).
The Secretary and the State share the Tribe’s position on the key issue in this case—
i.e.
, that the
Compact is consistent with IGRA. The Tribe never identifies how its litigation interests differ
from those of the other sovereigns.
See
Tribe’s Reply in Supp. of Mot. to Intervene at 11–13,
Dkt. 24 ( ). And although the Tribe asks this Court to simply assume that their
interests conflict,
see id.
at 11, its request is inconsistent with applying Rule 19(b) based on
“practical considerations in the context of particular litigation,” as controlling precedent requires,
Kickapoo Tribe
,
The second Rule 19(b) factor does not alter this analysis. Having found that the extent of any prejudice to the Tribe does not warrant dismissal, it makes little sense to ask whether “protective provisions in [this Court’s] judgment” or “shaping [its] relief” would lessen that prejudice. Fed. R. Civ. P. 19(b)(2). The ability to minimize prejudice, in other words, bears on indispensability only when there is prejudice to be minimized.
Moreover, because the Court can issue an “adequate” judgment in the Tribe’s absence,
the third Rule 19(b) factor also favors allowing this action to proceed. Fed. R. Civ. P. 19(b)(3).
As used in this context, “adequacy refers to the public stake in settling disputes by wholes,
whenever possible.”
Pimentel
,
Finally, because the plaintiffs would have no “adequate remedy if the action were
dismissed for nonjoinder,” the fourth Rule 19(b) factor also favors proceeding. Fed. R. Civ. P.
19(b)(4). Dismissing this suit would not allow the plaintiffs to proceed in an alternate forum, for
example, after curing a defect in personal jurisdiction. To the contrary, holding that the Tribe is
indispensable in this case, where the Tribe has made no particularized showing of prejudice,
would require treating tribes as indispensable in
every
case that challenges the Secretary’s
approval of a gaming compact. And under that rule, those approvals will
never
be subject to
judicial review because the nonjoinder of a tribe will
always
require dismissal. The D.C. Circuit,
which reached the merits in another compact-approval case, has not adopted that extreme and
unworkable conclusion.
See Amador Cty.
,
The Tribe’s remaining arguments, both of which rely on unpublished and out-of-circuit
decisions, do not persuade. To start, the Tribe invokes
Friends of Amador County v. Salazar
,
For the reasons above, the Court finds that “equity and good conscience” permit this action to continue in the Tribe’s absence. Fed. R. Civ. P. 19(b). This conclusion resolves the Tribe’s motion to intervene. Because the Tribe moved to intervene solely to move for dismissal, because the Tribe seeks dismissal on the sole ground that it is indispensable, and because the Tribe is not indispensable, the Tribe’s motion for limited intervention is denied as moot.
C. The Compact violates IGRA by authorizing gaming off Indian lands On the merits, it is well-settled that IGRA authorizes sports betting only on Indian lands.
This requirement stems from IGRA § 2710(d)(8)(A), which authorizes the Secretary to approve
compacts “governing gaming on Indian lands.” 25 U.S.C. § 2710(d)(8)(A). It is repeated in
IGRA § 2710(d)(1), which lists the conditions under which “[c]lass III gaming activities shall be
lawful on Indian lands.”
Id.
§ 2710(d)(1). Altogether, over a dozen provisions in IGRA regulate
gaming on “Indian lands,”
[6]
and none regulate gaming in another location. Indeed, if there were
any doubt on the issue, the Supreme Court has emphasized that “[e]verything—literally
everything—in IGRA affords tools . . . to regulate gaming on Indian lands, and nowhere else.”
Bay Mills
,
It is equally clear that the Secretary must reject compacts that violate IGRA’s terms. The
D.C. Circuit addressed this very issue in
Amador County v. Salazar
, which held that IGRA
imposes “an obligation on the Secretary to affirmatively disapprove any compact” that is
inconsistent with its terms,
The instant Compact attempts to authorize sports betting both on and off Indian lands. In
its own words, the Compact authorizes such betting by patrons who are “physically located in the
State [of Florida] but
not on
[
the Tribe’s
]
Indian Lands
.” Compact § III(CC)(2) (emphasis
added). That italicized phrase is no slip of the tongue, but instead describes the basic
consequence of authorizing online betting throughout the State. Most locations in Florida are not
Indian lands, which IGRA defines to mean lands “within the limits of any Indian reservation,”
“held in trust by the United States for the benefit of any Indian tribe,” or “over which an Indian
tribe exercises governmental power,” 25 U.S.C. § 2703(4). And although the Compact
“deem[s]” all sports betting to occur at the location of the Tribe’s “sports book(s)” and
supporting servers,
see
Compact § III(CC)(2), this Court cannot accept that fiction. When a
federal statute authorizes an activity only at specific locations, parties may not evade that
limitation by “deeming” their activity to occur where it, as a factual matter, does not.
See CSX
Transp., Inc. v. Ala. Dep't of Revenue
,
The Supreme Court’s decision in
Michigan v. Bay Mills Indian Community
confirms that
conclusion. In that case, the State of Michigan sought to enjoin class III gaming at a casino that
was operated by an Indian tribe but located outside Indian lands.
Bay Mills
,
The Secretary’s Approval Letter, as submitted to the Tribe on August 6, 2021, lacks a
plausible defense of the Compact’s scope. First, the letter notes that IGRA allows gaming
compacts to govern the “application” of state and tribal laws that are relevant to class III gaming
and the “allocation of criminal and civil jurisdiction” between states and tribes with respect to
enforcing those laws, 25 U.S.C. § 2710(d)(3)(c)(i)-(ii).
See
Approval Letter at 7. But those
provisions, which concern states and tribes’ regulatory responsibilities, say nothing about
whether gaming activity occurs on “Indian lands,” 25 U.S.C. § 2710(d)(8)(A). Second, the
Approval Letter notes that “[m]ultiple states have enacted laws that deem a bet to have occurred
at the location of the [hosting] servers” and argues that the “Compact reflects this modern
understanding of how to regulate online gaming.” Approval Letter at 8. But regardless of what
states have done in their own jurisdictions, changes in state law do not affect the federal-law
issues in this case. Finally, the Approval Letter argues that online sports betting has practical
benefits.
See id.
at 8–9. But “[s]uch policy arguments, though proper for legislative
consideration, are irrelevant” here.
Coopers & Lybrand v. Livesay
,
The Secretary’s lead argument in this litigation fares no better. That argument insists that the Compact authorizes only the online gaming activities that occur on Indian lands, including the receipt of online sports bets that are placed elsewhere. Gov’t’s Supplementary Mem. at 9, Dkt. 41 ( ). The Secretary further argues that a Florida statute permits the remaining gaming activities, which include placing those bets in the first instance. See id. at 9– 10 (citing Fl. Stat. § 285.710(13)(b)). Finally, the Secretary argues that the sole purpose of the Compact’s “deeming” language is to divide regulatory responsibilities between the State and the Tribe. See id. at 12. For these reasons, the Secretary argues that all sports betting in Florida, including both placing bets and processing them, is lawful where it occurs.
The principal problem with the above argument is that it is incompatible with the
Compact’s text. The interpretation of tribal-state gaming compacts is a question of federal law.
Cachil Dehe Band of Wintun Indians of Colusa Indian Cmty. v. California
,
Other provisions in the Compact make clear that the “deemed” clause in Section IV(A)
plays an authorizing, rather than regulatory role. Gov’t’s Suppl. Mem. at 4. The title of
Section IV, “Authorization and Location of Covered Games,” suggests that the location of
gaming is relevant to its authorization.
See Almendarez-Torres v. United States
,
The final problem with the Secretary’s argument is that, although it attempts to read the Compact in pari materia with Florida law, its account of that law is inconsistent with the Florida Constitution. Article X, Section 30 of that Constitution provides that the State may expand sports betting only through a citizen’s initiative or an IGRA gaming compact. Fl. Const. art. X, §§ 30(a)–(c). And because no citizens’ initiative has approved online sports betting, such betting can be lawful in Florida only if it is authorized by a gaming compact. See id. Against this backdrop, it makes little sense to argue that the Florida Legislature authorized sports betting independently of the instant Compact. See Gov’t’s Suppl. Mem. at 4. To the contrary, the better explanation of the Legislature’s conduct is that it intended to remove any state-law barriers to the gaming it understood the Compact to authorize. See Fl. Stat. § 285.710(13)(b) (providing that games “conducted pursuant to” the Compact “do not violate the laws of this state”). It is important to be clear: this Court is not issuing a final decision on any question of Florida constitutional law. Nonetheless, to the degree that the Secretary invokes Florida law to explain the Compact’s terms, her argument misses the mark.
For the reasons above, the Court concludes that the Compact authorizes gaming both on and off Indian lands. The Compact accordingly violates IGRA’s “Indian lands” requirement, which means that the Secretary had an affirmative duty to reject it. This disposition warrants granting the West Flagler plaintiffs’ motion for summary judgment and eliminates any need to address their other arguments on the merits.
D. The Appropriate Remedy Is to Vacate the Compact
The last issue in this case is the plaintiffs’ remedy. The issue is governed by § 706 of the
APA, which directs courts to “hold unlawful and set aside agency action” that is “not in
accordance with law.” 5 U.S.C. § 706(2)(A). The “agency action” under review is the
Secretary’s default approval of the Compact. Compl. ¶ 1 (
West Flagler
).
Amador County
confirms that vacating the Secretary’s approval is appropriate.
The remedy also resolves the
Monterra
action. It is true that the
Monterra
plaintiffs have
challenged the Compact under a broader legal theory than is addressed in this opinion.
See
Mem. in Supp. at 23–28 (
Monterra
). But those plaintiffs seek the same relief that this opinion
provides.
See
Compl. ¶ 139 (
Monterra
) (requesting an “order setting aside defendants’ unlawful
approval of the 2021 Compact”). And because vacating the Compact fully redresses the injuries
that those plaintiffs allege, their request for summary judgment on other grounds is dismissed as
moot.
See Dickson
,
* * *
In the Court’s understanding, the practical effect of this remedy is to reinstate the Tribe’s prior gaming compact, which took effect in 2010, see Indian Gaming, 75 Fed. Reg. 38,833 (July 6, 2010), and which may remain in effect until 2030, Compl. Ex. D. (Prior Compact) § XVI(B), Dkt. 1-4 ( West Flagle r). See Fl. Stat. § 285.710(3)(b). In that respect, this decision restores the legal status of class III gaming in Florida to where it was on August 4, 2021—one day before the Secretary approved the new compact by inaction. Because the more recent Compact is no longer in effect, continuing to offer online sports betting would violate federal law. 25 U.S.C. § 2710(d)(1)(C) (providing that “[c]lass III gaming activities shall be lawful on Indian lands only if . . . [they are] conducted in conformance with a Tribal-State compact . . . that is in effect”).
This decision does not foreclose other avenues for authorizing online sports betting in
Florida. The State and the Tribe may agree to a new compact, with the Secretary’s approval, that
allows online gaming solely on Indian lands. Alternatively, Florida citizens may authorize such
betting across their State through a citizens’ initiative. Fl. Const. art. X, §§ 30(c). What the
Secretary may not do, however, is approve future compacts that authorize conduct outside
IGRA’s scope. And IGRA, as the Supreme Court explained in
Bay Mills
, authorizes gaming “on
Indian lands, and nowhere else.”
CONCLUSION
For the foregoing reasons, the plaintiffs’ Motion for Summary Judgment is granted, the Monterra plaintiffs’ Motion for Summary Judgment is denied as moot, the Tribes’ Motions to Intervene are denied, and the Secretary’s Motions to Dismiss are denied. A separate order consistent with this decision accompanies this memorandum opinion. __
DABNEY L. FRIEDRICH United States District Judge November 22, 2021
Notes
[1] The Court resolves these cases together because they challenge the same gaming compact, raise overlapping questions of law, and seek overlapping forms of relief. For clarity, the Court will use parentheticals to identify the case name with which each filing is associated.
[2] At the hearing, government counsel was unable to take a position on the location of online gaming under the Compact. Rough Hr’g Tr. at 51–53. The Court thus directed counsel to file a supplemental brief on the merits on or before November 9. Min. Order of Nov. 5, 2021. Counsel has since done so. See Dkt. 40–41 ( ); Dkt. 52–53 ( Monterra ).
[3] For instance, the Secretary challenges the inference, from a respondent’s answer that he would
“open an online sports wagering account,” Chavez Decl. at 9, that he would “
actually
place bets
online,” Gov’t’s Mot. at 13 (emphasis in original). But placing bets online is the obvious
purpose of opening an online betting account. And nothing in the requirement of an “imminent”
injury, as described in
Clapper v. Amnesty International USA
,
[4] The Secretary suggested that this kind of partnership may violate 25 U.S.C. § 2710(b)(2)(A) by giving non-Indian entities a proprietary interest in Indian gaming. Approval Letter at 11–12. The Secretary never addresses the tension between encouraging West Flagler to enter such a partnership in this litigation and advising that such partnerships are unlawful elsewhere.
[5] The Tribe cites
Crossroads Grassroots Policy Strategies v. FEC
,
[6] These provisions include 25 U.S.C. § 2710(a)(1), (a)(2), (b)(1), (b)(2), (b)(4), (d)(1), (d)(2)(A), (d)(2)(C), (d)(3)(A), (d)(5), (d)(7)(A)(ii), (d)(8)(A).
[7] The Approval Letter also argues that patrons may not wager online while “physically located on another Tribe’s Indian lands,” Approval Letter at 8 & n.14, on the theory that IGRA allows gaming “on Indian lands” only if that gaming is authorized by the “Indian tribe having jurisdiction over such lands,” id. (quoting 25 U.S.C. § 2710(d)(1)(A)(i)). That argument concedes that online betting occurs at the bettor’s location.
[8] At oral argument, the plaintiffs suggested that the Court could set aside the
compact only to the extent that it conflicts with IGRA. But the Secretary forfeited any request
for severance by omitting it from its motions to dismiss, its corresponding replies, and its
supplemental briefs. In any event, the Court reads
Amador County
, which identifies the
appropriate relief in this case as ordering the Secretary “to reject the compact,” as foreclosing
line-by-line review of the Compact’s terms.