California Court of Appeals Holds Contract Breach Claim Preempted by IGRA

Here is the opinion in Sharp Image Gaming v. Shingle Springs Band of Miwok Indians (Cal. Ct. App.). An excerpt:

We conclude that IGRA preempts state contract actions based on unapproved “management contracts” and “collateral agreements to management contracts” as such agreements are defined in the IGRA regulatory scheme. Thus, the trial court erred by failing to determine whether the ELA and the Note were agreements subject to IGRA regulation, a necessary determination related to the question of preemption and the court’s subject matter jurisdiction. We further conclude that the ELA is a management contract and the Note is a collateral agreement to a management contract subject to IGRA regulation. Because these agreements were never approved by the NIGC Chairman as required by the IGRA and were thus void, Sharp Image’s action is preempted by IGRA. Consequently, the trial court did not have subject matter jurisdiction. 

Briefs here.

Update in Jamul Action Committee v. Chaudhuri

Here are the new materials in Jamul Action Committee v. Chaudhuri (E.D. Cal.):

60-1 Jamul Action Committee Motion for PI

62 Tribal Opposition to Motion for PI

63 NIGC Opposition to Motion for PI

67 Jamul Action Committee Reply

75-1 Rosales & Toggery Motion to File Amicus

75-2 Rosales & Toggery Amicus Brief

83 Tribal Opposition

84 NIGC Opposition

92 DCT Order Denying Amicus Motion

Previous postings here and here.

Federal Court Grants Summary Judgment in Gaming Management Contract Matter

Here are the materials in Bettor Racing Inc. v. National Indian Gaming Commission (D. S.D.):

53 Bettor Motion for Summary J

57-1 NIGC Cross Motion

59 Flandreau Cross Motion

62 Bettor Response to Flandreau

64 Bettor Response to NIGC

67 Flandreau Reply

68 NIGC Reply

71 DCT Order

Prior posts with materials here and here.

Federal Court Dismisses Jamul Action Committee Challenge under Rule 19 (with leave to amend)

Here are the materials in Jamul Action Committee v. Stevens (E.D. Cal.):

21 Federal Motion to Dismiss

22 Jamul Indian Village Motion to Fiile Amicus Brief

22-1 Jamul Indian Village Motion to Dismiss

30 Jamul Action Committee Response to Jamul Indian Village

31 Jamul Action Committee Response to Feds

34 Jamul Indian Village Reply in Support of Amicus Motion

36 Jamul Indian Village Reply in Support of Motion to Dismiss

37 Federal Reply

42-1 Jamul Action Committee Motion to Amend Complaint

50 DCT Order

We posted the complaint here.

Update in Bettor Racing v. NIGC — Flandreau Intervenes and Files Counterclaim

Here are the updated materials in Bettor Racing Inc. v. National Indian Gaming Commission (D. S.D.):

9-1 Tribal Court Docs Part 1

9-2 Tribal Court Docs Part 2

35 DCT Order Allowing Intervention

36 Flandreau Answer and Counterclaim

Complaint was posted here.

Jamul Action Committee v. Stevens: Carcieri-Style Challenge to Approval of Jamul Indian Village Gaming Management Contract

Here:

Complaint

Update in Sharp Image Gaming v. Shingle Springs Miwok

The United States has filed an amicus curiae brief confirming that the trial court erred in disregarding the NIGC’s action.  The United States confirmed that the state courts are required to defer to the agency’s views, as expressed in an NIGC opinion letter, the Chairman’s decision disapproving the agreement, and in the United States’ amicus brief, itself:

[T]he Superior Court was obliged to exercise its jurisdiction consistent with IGRA and IGRA’s bar on the enforcement of unapproved management contracts. Instead of acknowledging this bar and the need to resolve whether the ELA was an unapproved management contract (consistent with deference principles), the Superior Court simply denied the Tribe’s motion to dismiss on the grounds that the Chairman’s 2009 Disapproval was not “final agency action” binding on the state court. . . .

This is a non sequitur. A final disapproval decision by the NIGC is not necessary to render an unapproved management contract void. Such contract is and remains void unless and until the NIGC takes formal action to approve the contract. 25 C.F.R. §§ 533.1(a), 533.7. The NIGC’s disapproval of the ELA merely preserved the legal status quo. Thus, even if the 2009 Disapproval was invalid due to procedural errors – a question over which the Superior Court had no jurisdiction (see infra) – a ruling setting aside the NIGC’s decision would not resolve the preemption question.

. . .

[T]he present case involves the NIGC’s determination on a threshold legal issue involving an interpretation and application of the NIGC regulation defining “management contract.” The NIGC expressed its regulatory interpretation in the 2009 Disapproval and the 2007 OpinionLetter (as well as in the present amicus brief). The NIGC is entitled to deference in the interpretation of its own regulations, even when such interpretation is not rendered in a formal rulemaking or other final agency action.

Here is the United States’ brief and the parties’ briefs in response:

United States’ Amicus Brief

Sharp’s Response to United States’ Amicus Brief

Tribe’s Response to United States’ Amicus Brief

The merits briefs are here.

California COA Briefs in Sharp Image Gaming v. Shingle Springs Miwok

Interesting and important case. The appeal is from a $30 million judgment against the Shingle Springs Band of Miwok Indians in favor of a developer of a gaming facility that failed in the 1990s, before the Tribe partnered with a new developer and spent hundreds of millions of dollars to open the existing Red Hawk Casino. The case went to trial after the NIGC’s final agency action ruling the main contract at issue was void as an unapproved management agreement.

2012-10-10 Tribe’s Opening Brief

2012-11-26 Sharp’s Respondent’s Brief

2013-02-15 Tribes Reply Brief

From the Tribe’s Opening Brief:

[T]he Superior Court erred in assuming subject matter jurisdiction over this breach of contract lawsuit by purporting to overturn a federal agency’s binding determination that the contract was unenforceable under a preemptive federal statute. It was also error to assume jurisdiction over a sovereign Indian nation after finding the Tribe did not clearly and unequivocally waive its immunity.

. . .

Once the NIGC took final agency action ruling Sharp’s ELA was a management contract that was void for lack of agency approval, this case was effectively over—or at least it should have been. The decision of the NIGC, the federal agency charged with approving and disapproving management contracts under IGRA, is binding on lower courts unless successfully challenged in a United States District Court. AT&T, 295 F.3d 899, 906, 909-10. Sharp opposed the Tribe’s efforts to stay the Superior Court action to permit Sharp to initiate proceedings in the only proper forum: federal district court. . . . Instead, Sharp convinced the Superior Court to reach the merits of the NIGC’s decision and enforce the very revenue sharing provisions the NIGC deemed illegal. . . . Sharp’s election to proceed without first challenging the NIGC’s final agency action is dispositive of the viability of Sharp’s ELA: it is void unless and until Sharp brings a proper federal court challenge, and any claims predicated on the ELA’s validity fail as a matter of law.

. . .

The Superior Court erred by failing to dismiss this case on mandated federal sovereign immunity principles. In ruling on the Tribe’s jurisdictional motion to dismiss, the Court erroneously applied inapposite state law contract interpretation cases when the question is controlled by federal law. . . . The Court also erred, as a matter of law, by failing to treat the defense as a question that needed to be resolved at the outset of the case, as opposed to one appropriate for a jury. . . . Finally, the Superior Court erred when it issued a ruling that should have compelled dismissal, since it found that the Tribe’s reading of the waiver provision in Sharp’s contracts was “reasonable” given the evidence regarding the waiver’s actual scope—i.e., that the waiver of immunity did not reach Sharp’s claims, and was limited to the gaming facility that Sharp and the Tribe had partnered to build, Crystal Mountain Casino.