Judge rejects NIGC's role in controversial casino case

Law

Monday, December 1, 2008

The National Indian Gaming Commission lacked the authority to allow a Nebraska tribe to open a casino at a controversial site in Iowa, a federal judge ruled on Friday.

In what appears to be the first case of its kind, Judge Charles Wolle said the regulatory agency shouldn't have determined whether the Ponca Tribe could build a casino in Carter Lake, Iowa. That decision lies with the Department of the Interior and the Bureau of Indian Affairs, the 11-page ruling stated.

"The NIGC should have deferred to BIA and DOI to decide whether to transform the Carter Lake parcel into restored lands," Wolle said.

But since the NIGC issued a December 31, 2007, determination on the casino site, Wolle ruled on the merits of that decision. He said the agency's action was "arbitrary and unlawful" because it didn't take into account that the tribe promised not to build a casino on the land when the site was taken into trust in 2003.

Wolle acknowledged that the NIGC made some "candid comments" about the tribe's promise but he wrote them off as an "afterthought." He noted that NIGC Chairman Phil Hogen initially ruled against the Ponca casino bid.

"The subsequent rejection of that opinion was without factual and legal basis," Wolle said.

The decision in the highly-unusual case, however, may not put an end to the tribe's plans. Wolle pointed out that his ruling was limited to the NIGC's role in the casino approval process.

But the case could have a broad impact because it affects a dispute that has emerged between NIGC, an independent entity that was created by the Indian Gaming Regulatory Act, and Interior. The two sides have been at odds over who has the authority to issue determinations for casino sites.

Hogen, a Bush nominee, spoke about the issue at the Global Gaming Expo less than two weeks ago and defended the NIGC's independence. He said he is urging the incoming administration of president-elect Barack Obama to respect the agency's authority.

"I'm deeply concerned that [NIGC's independence] not be infringed upon," Hogen said at G2E, the world's largest gaming conference.

By law, IGRA requires at least two of the three NIGC commissioners to be members of federally recognized tribes. Hogen said the Secretary of the Interior -- whoever that might be in the new administration -- shouldn't have the ability to overrule the NIGC's determinations.

In the Ponca case, the Department of Justice backed Hogen's stance and cited a memorandum of agreement (MOA) between NIGC and DOI regarding casino determinations. Generally, the NIGC takes the lead when a site is already in trust, as was the situation with the Poncas.

But Wolle rejected the government's defense and said the NIGC shouldn't have taken action because DOI had already determined -- when the land was taken into trust -- that the site wasn't eligible for gaming.

"The MOA, carefully read, does not provide NIGC that broad authority to override DOI decisions, nor explicit authority to make initial restored land decisions," Wolle wrote.

The Ponca Tribe was terminated and restored to federal recognition by an act of Congress in 1990. Although the tribe is primarily based in Nebraska, the law included Carter Lake and other parts of Iowa in the tribe's service area.

After restoration, the tribe purchased a 5-acre site in Carter Lake with the intention of opening a health facility. The state of Iowa opposed the land-into-trust application but dropped the threat of litigation when the tribe agreed not to pursue gaming.

The tribe changed its mind and decided to open a casino in Carter Lake, which is in a county with three commercial gaming facilities. Carter Lake, though it is a part of Iowa, is physically surrounded by the state of Nebraska due to the shifting of the Missouri River.

Court Decision:
Nebraska v. NIGC (November 28, 2008)