economic development

Ironies of the Patchak Decision

Matthew L.M. Fletcher2 Comments

Here are some interesting ironies of the reasoning and outcome in Patchak.

First, the prudential standing of David Patchak to sue the federal government to protect the rural character of his community (and related objections) — under Michigan law (I think) Patchak would have a much more difficult proof than he does under the conglomeration of statutes Patchak is using (APA, QTA, and I guess IGRA). Just a few weeks ago, the Michigan Court of Appeals (Tobin v City of Frankfort — thanks to B.A. for pointing this one out for me) rejected the standing of a landowner to challenge a development in Benzie County. Here were the injuries complained of:

Intervenor argues that it has established through its members’ affidavits that it has standing to intervene and pursue its member’s claims. The relevant declarations by FOBB members in their September 2000 affidavits primarily detail concerns about (1) increases in population, traffic, noise levels, lights, air pollution, and property taxes; (2) decreases in home values, aesthetics of the neighborhood, and environmental value caused by tree and vegetation removal attributable to the development; and (3) the potential presence of commercial establishments. The generalized concerns relating to environmental impacts, population increases, aesthetics, and pecuniary harm do not suffice to demonstrate “special damages . . . different in kind from those suffered by the community, so as to qualify [intervenor] as an aggrieved party.” Joseph, 5 Mich App at 571. Alternately phrased, development-related aesthetic changes, population increases, environmental impacts, and pecuniary harm will be experienced by other community members to the same extent as affiants.

But that’s not prudential standing, you say. True, but what an irony. This is Patchak’s list of alleged injuries in a nutshell:

To establish his standing to bring suit, Patchak contended that he lived “in close proximity to” the Bradley Property and that a casino there would “destroy the lifestyle he has enjoyed” by causing “increased traffic,” “increased crime,” “decreased property values,” “an irreversible change in the rural character of the area,” and “other aesthetic, socioeconomic, and environmental problems.”

Justice Kagan’s majority opinion then uses the Cohen Handbook as support for the proposition that since Interior takes land into trust for the benefit of Indian tribes (often economic benefit), then anyone seemingly opposed to tribal economies has standing (sorry for the long block quote):

Patchak’s suit satisfies that standard, because §465 has far more to do with land use than the Government and Band acknowledge. Start with what we and others have said about §465’s context and purpose. As the leading treatise on federal Indian law notes, §465 is “the capstone” of the IRA’s land provisions. F. Cohen, Handbook of Federal Indian Law §15.07[1][a], p. 1010 (2005 ed.) (hereinafter Cohen). And those provisions play a key role in the IRA’s overall effort “to rehabilitate the Indian’s economic life,” Mescalero Apache Tribe v. Jones, 411 U. S. 145, 152 (1973) (internal quotation marks omitted). “Land forms the basis” of that “economic life,” providing the foundation for “tourism, manufacturing, mining, logging, . . . and gaming.” Cohen §15.01, at 965. Section 465 thus functions as a primary mechanism to foster Indian tribes’ economic development. As the D. C. Circuit explained in the MichGO litigation, the section “provid[es] lands sufficient to enable Indians to achieve self-support.” Michigan Gambling, 525 F. 3d, at 31 (internal quotation marks omitted); see Morton v. Mancari, 417 U. S. 535, 542 (1974) (noting the IRA’s economic aspect). So when the Secretary obtains land for Indians under §465, she does not do so in a vacuum. Rather, she takes title to properties with at least one eye directed toward how tribes will use those lands to support economic development.

So in Michigan, someone who objects to development can’t sue because no one has adopted a statute specifically authorizing such development. In Indian law, someone who objects to tribal development can sue because Congress specifically did adopt a statute authorizing land purchases. The fact that Section 5 exists to remedy incredible tribal land dispossession and poverty is irrelevant.

Second, the land development question — Gun Lake Casino is up and running, and the State of Michigan and the local units of government (well, and the Tribe), are raking in millions upon millions. Patchak wants that to end (because apparently he didn’t care that Wayland’s football players were under a pay-to-play arrangement; more details here).

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Fitch Press Release on Patchak Decision

Kate Fort1 Comment

Here.

NEW YORK, Jun 19, 2012 (BUSINESS WIRE) — On June 18, 2012, the Supreme Court ruled 8-1 that David Patchak, an individual, has standing and can file suit against the government’s decision to take land into trust on behalf of a Native American tribe. The court offered no conclusions regarding the merits of Patchak’s case; it simply allows the case to proceed in the lower courts. Fitch believes this ruling has several key credit implications for the gaming sector:

–It is likely to result in increased challenges from anti-gaming interests regarding land-into-trust decisions for tribes, as it lengthens the statute of limitations on judicial review to six years from 30 days;

–Raising capital for Native American casino projects could become more difficult/expensive, as investors are likely to have heightened concern about potential challenges regarding land-into-trust decisions;

–Casino operators that face the possibility of increased competition from potential casino projects tied to land-into-trust decisions could benefit from a longer regulatory process.

Nathalie Martin and Joshua Schwartz on the Implications of Tribal Payday Lending

Matthew L.M. Fletcher3 Comments

Nathalie Martin and Joshua Schwartz have posted their paper, “The Alliance between Payday Lenders and Tribes: Are Both Tribal Sovereignty and Consumer Protection at Risk?,” on SSRN. The paper appears in the Washington & Lee Law Review. Here is the abstract:

This article explores how tribal sovereign immunity is being used in the context of payday lending to avoid state law and explores the ramifications of this for both consumer-protection regulation and tribes. It discusses payday loans and tribal sovereignty generally, as well as tribal sovereign immunity, then discusses what might be done to address this consumer protection issue. More specifically, we discuss who in society has the power and resolve to dissolve this alliance, identifying tribes themselves, the Supreme Court, Congress, the Federal Trade Commission, and the Consumer Financial Protection Bureau as possibilities.

This is an important piece of scholarship from balanced scholars. Some tribal leaders and lawyers are thinking that payday lending is the new gaming for Indian country, but there seems to me that a certain amount of consent is missing in the way some payday lenders are behaving. I don’t think we saw the extent of bad faith in the early days of Indian gaming that we are sometimes seeing now with some of these tribal payday lenders. It’s important for Indian country as a whole to come together on this question as soon a possible, or else Congress will.

Fixing Carcieri for Michigan

Matthew L.M. Fletcher

Fixing Carcieri for Michigan

Matthew L.M. Fletcher

Congressional action to correct the Supreme Court’s decision in Carcieri v. Salazar would cost American taxpayers nothing and would be an enormous win for Michigan tribes and the Michigan economy. Carcieri, a decision that undermines the certainty of the Department of Interior’s authority to acquire land in trust for some Indian tribes, makes borrowing money for several Michigan tribes more difficult and more expensive – for some Michigan tribes, the price to borrow money for capital growth increases by millions in increased interest or even the inability to borrow. In short, Carcieri costs the Michigan economy jobs and economic growth.

The Carcieri Decision

The Carcieri decision held that the Department of Interior could not take land into trust for the benefit of the Narragansett Indian Tribe in Rhode Island under Section 5 of the Indian Reorganization Act (“IRA”), a statute that authorizes the Secretary of Interior to do so for any Indian tribe. The IRA’s definition of “Indian tribe” includes any tribe “now under federal jurisdiction.” The Interior Department had interpreted the IRA to authorize trust land acquisitions for tribes under federal jurisdiction at the time of the application, using federal recognition as a proxy for federal jurisdiction. But the Supreme Court held that the Narragansetts were under state jurisdiction at the time of the enactment of the IRA in 1934, and so Interior could not take land into trust for them.

The Department of Interior had “administratively terminated” several Michigan Indian tribes – all of the six Ottawa and Potawatomi tribes now federally recognized – in the late 19th century. These tribes are “treaty tribes,” meaning that they have an ongoing treaty relationship with the federal government that has never been extinguished by Congress. The Sixth Circuit has recognized that “administrative termination” was an illegal administrative act, and the concurrences and dissent in Carcieri also recognized that the Michigan tribes probably were “under federal jurisdiction” in 1934. Still, those tribes, and two other tribes in the Upper Peninsula that became federally recognized in the 1970s and 1980s may be affected by Carcieri.

Impacts on Michigan Tribes

The Michigan tribes are among the tribes most adversely affected by the Carcieri decision, even though every one of them is a treaty tribe. They are affected in two important ways:

First, each of the tribes potentially affected by Carcieri may be forced to engage in a costly, protracted historical and legal determination by the Interior Department that they were “under federal jurisdiction” in 1934. In other words, the tribes may have to expend precious tribal resources to prove that they are eligible tribes in the frivolous lawsuits that are destined to be filed. There are currently 62 non-gaming related Michigan tribes trust applications pending in the Department of Interior now. These applications are for agriculture, housing, public safety, and other infrastructure projects. Many of these projects involve multi-million dollar construction jobs and long-term job creation. Every day that these trust applications are delayed slows down Michigan job growth and economic development. Nationally, a Carcieri fix is estimated to generate 140,000 jobs, many of those in Michigan.

Derek Bailey, the former chairman of my tribe, the Grand Traverse Band of Ottawa and Chippewa Indians, testified before Congress in 2009 about the clear economic consequences of trust land acquisition delays:

As one example, Parcel 45 in Antrim County is a 78-acre parcel that is zoned for residential development by the local township and county. In order to obtain this zoning, we spent 1.5 million dollars of tribal money for roads and for sewer, water, and electrical infrastructure to render the parcels ready for individual housing. The parcel contains two homes owned by tribal members, two Grand Traverse Band rental homes, and 22 empty lots available for Tribal members to construct housing. However, until the land is placed into trust, tribal members cannot obtain the Bureau leases necessary to secure housing financing.

Second, the cloud of Carcieri stifles any development project by potentially affected Michigan tribes. Carcieri increases risks to lenders – the risk that a court finds that a tribe is not eligible because of the Carcieri case, even if low, increases exposure – and that translates to millions of dollars in increased interest rates and occasionally shuts down the project altogether by eliminating the ability of the tribe to borrow money at all. Carcieri has all but killed off investment in Indian country. This issue extends to tribes that may have a Carcieri problem and tribes that already have established economic enterprises. Lower Michigan tribes, especially in southwest Michigan, are enormous economic engines that have generated massive economic growth despite the specter of Carcieri. Relieving these economic engines of this unnecessary burden is only going to improve Michigan’s economy.

In conclusion, fixing Carcieri is costless to American taxpayers and a big win-win for Michigan and Michigan tribes.

Agamenv LLC v. Lavedure

Kate Fort

North Dakota federal district court refrains from issuing a TRO in a dispute between Turtle Mountain Tribal Council, Tribal Court, and gaming company.

Order

Complaint-FDC

Brief

Complaint-tribal court

Ex Parte TRO – tribal court

Motion to Withdraw TRO-tribal court

 

Brief in Gordon v. Holder (PACT Act Injunction Case)

Kate Fort

The Government’s brief arguing against Judge Lamberth’s injunction is here.

Previous coverage is here.

Update in Federal Trade Commission Suit against Tribal Payday Lenders et al.

Matthew L.M. Fletcher3 Comments

Here are additional pleadings in Federal Trade Commission v. AMG Services, Inc. (D. Nev.):

Scott Tucker & AMG Response

Robert Campbell Response

Part 269 Response

Muir Law Firm Response

Little Axe Response

Don Brady Response

Scott Tucker & AMG Motion to Dismiss

Little Axe Motion to Dismiss

Joint Motion to Dismiss

The “responses” are responses to the FTC’s motion for a preliminary injunction. That motion and the complaint are here and here.

News coverage via Pechanga here.

Business Week Article on Tribal Payday Lenders

Matthew L.M. Fletcher

Important article. Here.

H/t to Pechanga.

En Banc Ninth Circuit Holds Forest Service Violated the Endangered Species Act in Approving Mining at Klamath Nat’l Forest

Matthew L.M. Fletcher2 Comments

Here is today’s opinion in Karuk Tribe of California v. USFS.

Audio and video of the en banc argument here. Briefs here.

An excerpt:

There are two substantive questions before us.

The first is whether the Forest Service’s approval of four NOIs to conduct mining in the Klamath National Forest is “agency action” within the meaning of Section 7. Under our established case law, there is “agency action” whenever an agency makes an affirmative, discretionary decision about whether, or under what conditions, to allow private activity to proceed. The record in this case shows that Forest Service District Rangers made affirmative, discretionary decisions about whether, and under what conditions, to allow mining to proceed under the NOIs.

The second is whether the approved mining activities “may affect” a listed species or its critical habitat. Forest Service regulations require a NOI for all proposed mining activities that “might cause” disturbance of surface resources, which include fisheries and wildlife habitat. 36 C.F.R. §§ 228.4(a), 228.8(e). In this case, the Forest Service approved mining activities in and along the Klamath River, which is critical habitat for threatened coho salmon. The record shows that the mining activities approved under NOIs satisfy the “may affect” standard.

We therefore hold that the Forest Service violated the ESA by not consulting with the appropriate wildlife agencies before approving NOIs to conduct mining activities in coho salmon critical habitat within the Klamath National Forest.

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Update on NLRB v. Tribal Casino Cases (from Kaighn Smith at DWM)

Matthew L.M. Fletcher1 Comment

Normally, we don’t post these kinds of updates from law firms, but this is so well done and has links to primary documents we crave (see bolded text under the fold), so here goes:

Three recent unfair labor practice cases leveled against Indian nation casinos by the National Labor Relations Board (NLRB) have gone in three different directions.  There may be ominous implications.

First, there was the complaint against the WinStar World Casino, owned and operated by the Chickasaw Nation, filed before the NLRB’s Regional Office in Oklahoma.  The NLRB charged casino managers with violating the National Labor Relations Act (NLRA) by disciplining employees who engaged in union organizing activities.  The Chickasaw Nation sued the NLRB in federal court and secured an injunction to stop the case on the ground that the NLRB has no jurisdiction over labor relations within the Chickasaw Nation’s territory.  The NLRB has appealed that decision to the U.S. Court of Appeals for the Tenth Circuit.  It argues that federal courts have no authority to stop an NLRB unfair labor practice case until after the case has proceeded to final decision by the full Board.  (Under a provision of the NLRA, parties can appeal final Board decisions to the federal courts of appeals.)

Second, there was the complaint against the Soaring Eagle Casino, owned and operated by the Saginaw Chippewa Tribe, filed before the NLRB’s Regional Office in Michigan.   In that case, the NLRB charged the casino with violating the NLRA when it fired an employee for soliciting union support in violation of the casino’s non-solicitation policy.   The Tribe sued the NLRB in federal court just like the Chickasaw Nation.  This time, however, the federal court declined to hear the case.  It said the Tribe needed to make all of its arguments to the Board before proceeding to federal court.  The unfair labor practice case then went to hearing before an Administrative Law Judge (ALJ), and the casino lost.  The ALJ ordered the casino to reinstate the employee and pay her back wages.  The ALJ also ordered the casino to post notices to employees announcing their rights under the NLRA, stating that it had violated the NLRA, and announcing that it would revoke its non-solicitation policy.  The casino has now appealed the ALJ’s decision to the full Board in Washington, D.C.  It argues that the NLRB has no jurisdiction over employment relations at its casino.

Third, there was the complaint against the Fort McDowell Casino, owned and operated by the Fort McDowell Yavapai Nation.  In that case, filed before the NLRB’s Regional Office in Arizona last February, the NLRB claimed that the casino maintained work rules that infringed on the ability of employees to engage in concerted activity in violation of the NLRA.  Before the case proceeded to hearing before the ALJ, the casino settled with the NLRB.  Under the settlement agreement on file with the NLRB’s Regional Office, the casino must post the following notice:

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