Litigation | NIGC

City loses yet another ruling in Fond du Lac Band gaming dispute

Wednesday, April 1, 2015

Artist's rendering of the new exterior of the Fond-du-Luth Casino in Duluth, Minnesota. The tribe is spending $5.5 million to renovate the facility. Image from Fond du Lac Band

The city of Duluth, Minnesota, lost yet another ruling in a long-running gaming dispute with the Fond du Lac Band of Lake Superior Chippewa Indians.

The city sued the National Indian Gaming Commission for invalidating an agreement that required the tribe to share 19 percent of revenues from the Fond-du-Luth Casino. The agency determined that the deal violated the Indian Gaming Regulatory Act by giving another party a "proprietary interest" in the facility.

A federal judge, however, said the NIGC acted lawfully when it issued a notice of violation (NOV) to the tribe back in 2011, 25 years after the casino opened in 1986 and 17 years after the agreement was presented to the agency in 1994.

"The NOV referenced the relevant statutes and regulations, enumerated the facts underpinning the violation, and did so while using common language understandable to those not immersed in the particular regulatory scheme," Judge Colleen Kollar-Kotelly of the federal court in Washington, D.C. said in the 15-page ruling issued on Tuesday.

"The court concludes that, in issuing the NOV, the commission was acting within the scope of the enforcement authority," she concluded.

The tribe stopped making payments under the agreement in 2009. By that time, the city had already reaped $75 million from the casino.

The city then sued the tribe in federal court. That led to a ruling from the 8th Circuit Court of Appeals that said the agreement violated IGRA, a decision that was not taken to the U.S. Supreme Court.

However, an issue remains alive in the case. Since the NIGC didn't issue the NOV until 2011, the city claims the tribe owes an estimated $12 million that would have been shared between 2009 and 2011.

The 8th Circuit heard arguments on the matter last November. A decision hasn't been issued.

The city could appeal the decision on the NOV to the D.C. Circuit Court of Appeals. In the event that court reaches a different conclusion on the agreement than the 8th Circuit, the Supreme Court might be more inclined to take up the matter.

The high court rarely takes Indian gaming cases. Prior to Michigan v. Bay Mills Indian Community from 2014, the last case that directly addressed an IGRA issue was Chickasaw Nation v. US in 2001.

Turtle Talk has posted documents from the NOV case, City of Duluth v. National Indian Gaming Commission.

Get the Story:
Frustrated Duluth Loses Casino Challenge in D.C. (Courthouse News Service 4/1)
Judge dismisses Duluth's challenge to casino ruling (The Duluth News Tribune 4/1)
Duluth Loses Case Over Casino Agreement (KQDS 3/31)
Duluth Loses Bid to Restore Casino Agreement (WDIO 3/31)
Duluth vs. Tribe: Federal court rules against Duluth, favors Indian gaming commission (Northland's News Center 3/31)

Prior 8th Circuit Court of Appeals Decision:
City of Duluth v. Fond Du Lac Band (January 14, 2013)