Pojoaque Pueblo owns and operates the Buffalo Thunder Resort and Casino near Santa Fe, New Mexico. Photo: Buffalo Thunder Resort

Compacts | Litigation

Pojoaque Pueblo loses big decision in gaming dispute with state

Monday, April 24, 2017

A federal appeals court has struck a major blow to a New Mexico tribe whose leaders are resisting demands for a greater share of their gaming revenues.

In 2014, Pojoaque Pueblo invoked a key provision of the Indian Gaming Regulatory Act when it was unable to negotiate a new Class III gaming compact with the state. Tribal leaders felt they were being pressured to contribute more of their earnings without getting anything in return.

But the 10th Circuit Court of Appeals on Friday stopped the Bureau of Indian Affairs from getting involved. In a unanimous decision, a panel of three judges said IGRA does not allow the agency to approve Class III games for the tribe over the state's objections.

The BIA's so-called Part 291 regulations go against the plain text of IGRA, Judge Jerome Holmes wrote in the 58-page decision. He said the law only authorizes federal intervention when a state has failed to negotiate in "good faith" as required by the law.

Such a determination was never reached because New Mexico invoked its sovereign immunity in response to a lawsuit filed by the tribe. But that doesn't mean the Secretary of the Department of the Interior -- the BIA's parent agency -- can change IGRA at his or her choosing, the court concluded.

"Part 291 attempts an end run around this clear statutory language by purporting to empower the Secretary to step in without a finding of bad faith if a state asserts sovereign immunity and that assertion results in dismissal of the suit," Holmes wrote in the decision. "At bottom, the Secretary is attempting to rewrite IGRA."

The ruling marks the second time the Part 291 regulations have been struck down. Back in 2007, the 5th Circuit Court of Appeals prevented the BIA from approving Class III games for the Kickapoo Tribe in neighboring Texas.

Just like the situation with Pojoaque Pueblo, the Texas asserted its sovereign immunity so it was never found to be in bad faith. That means the BIA can't step in, the 5th Circuit determined.

Together, the 10th Circuit and the 5th Circuit affect a wide swath of Indian Country -- dozens of tribes in nine states. These tribes come to the table with less negotiating power because they won't be able to turn to the federal government, as their trustee, for help in Class III gaming disputes.

"In establishing the mechanism for tribal-state compacts to regulate Class III gaming, Congress knew that states would exploit their power," Pojoaque Pueblo argued in a brief to the 10th Circuit. "IGRA was enacted after two centuries of mistrust of states by Indian tribes."

That observation has proven true in other situations. The Rincon Band of Luiseno Indians turned to the BIA after the state of California demanded more revenues during Class III gaming negotiations.

The 9th Circuit Court of Appeals, which covers more tribes than the 10th Circuit and the 5th Circuit combined, found that the state was engaging in bad faith talks. California didn't raise a sovereign immunity defense so the BIA was able to follow its Part 291 regulations.

In New Mexico, the issue never came up until Pojoaque Pueblo said no to the state's demand for up to 10.5 percent of its revenues. A prior agreement capped the rate at 8 percent.

Still, nearly every other tribe in the state has agreed to the higher rate. That put the BIA in an awkward position -- since 2015, the agency has allowed 16 compacts to take effect even though the tribes didn't seem to be getting anything in return.

"Sovereign should mean something," Secretary Ryan Zinke, Interior's new leader, has been fond of saying as he discusses how he approaches tribal issues.

Zinke's name appears as a defendant on Friday's decision although he has not been involved in the litigation. But moving forward rests in his hands -- he could ask the 10th Circuit to rehear the case or appeal to the U.S. Supreme Court, which has been reluctant to hear Indian gaming disputes.

Turtle Talk has posted documents from the case, New Mexico v. Department of the Interior.

10th Circuit Court of Appeals Decision:
New Mexico v. Department of the Interior (April 21, 2017)