No. 10-330 upr me qEnurt ef the tate EDMUND G. BROWN, Governor of California; State of California, et al., Petitioners, V. RINCON BAND OF LUISENO MISSION INDIANS of the Rincon Reservation, aka RINCON SAN LUISENO BAND OF MISSION INDIANS, aka RINCON BAND OF LUISENO INDIANS, Respondent. On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Ninth Circuit SUPPLEMENTAL BRIEF OF PETITIONERS IN RESPONSE TO THE UNITED STATES AS AMICUS CURIAE KAMALA D. HARRIS Attorney General of California MANUEL MEDEIROS State Solicitor General SARA J. DRAKE Senior Assistant Attorney General MARC A. LEFORESTIER* Supervising Deputy Attorney General 1300 1 St., Suite 125 Sacramento, CA 95818 (916) 322-5452 [email protected]*Counsel of Record COCKLE LAW BRIEF PRINTING CO. (800~ 225-6964 OR CALL COLLECT (402) 342-2831
Transcript
No. 10-330
upr me qEnurt ef the tate
EDMUND G. BROWN,Governor of California; State of California, et al.,
Petitioners,V.
RINCON BAND OF LUISENO MISSIONINDIANS of the Rincon Reservation, aka RINCON
SAN LUISENO BAND OF MISSION INDIANS,aka RINCON BAND OF LUISENO INDIANS,
Respondent.
On Petition For A Writ Of CertiorariTo The United States Court Of Appeals
For The Ninth Circuit
SUPPLEMENTAL BRIEF OF PETITIONERSIN RESPONSE TO THE UNITED STATES
AS AMICUS CURIAE
KAMALA D. HARRISAttorney General of CaliforniaMANUEL MEDEIROS
State Solicitor GeneralSARA J. DRAKESenior Assistant Attorney GeneralMARC A. LEFORESTIER*Supervising Deputy Attorney General1300 1 St., Suite 125Sacramento, CA 95818(916) [email protected]
The Indian Gaming Regulatory Act of 1988 ("IGRA")compels federally recognized Indian tribes to enterinto compacts with states to set the terms by whichtribes may conduct casino-style gaming on theirIndian lands. IGRA’s compact requirement did notabrogate Indian tribes’ immunity to State taxation,and provides that a state’s demand for direct taxationin compact negotiations is evidence of bad faith. Thispetition for a writ of certiorari presents the followingquestions:
1. Whether a state demands direct taxation of atribe in compact negotiations under Section 11 ofthe Indian Gaming Regulatory Act, when it bar-gains for a share of tribal gaming revenue for theState’s general fund.
2. Whether the court below exceeded its jurisdictionto determine the State’s good faith in compactnegotiations under Section 11 of the Indian Gam-ing Regulatory Act, when it weighed the relativevalue of concessions offered by the parties inthose negotiations.
A. The United States’ View Of CompactNegotiations Would Eliminate The No-tions Of Cooperative Federalism ThatAnimate IGRA’s Compact Requirement ....1
B. The Court Of Appeals’ Decision Has Ad-versely Impacted The Secretary Of TheInterior’s Review Of Negotiated Com-pacts, To The Detriment Of Tribes AndThe State ...................................................5
C. The United States’ Application Of IGRATo Revenue Sharing Is Not Uniform, IsUnworkable, And Is Unrooted In IGRA ....7
S. Rep. No, 446, 100th Cong.,2d Sess. 13 (1988) ......................................................2
California Budget Summary, Revenue Esti-mates, pp. 62-63 (available at the URL http’]/www. ebudget, ca.gov/pd f/B udgetSummary/RevenueEstimates.pdf) ............................................5
This brief is in response to the brief for theUnited States as Amicus Curiae, filed in this case atthe invitation of the Court, and dated May 2011.
DISCUSSION
The United States’ brief as Amicus Curiae under-scores the urgent need for this Court to grant thepetition for a writ of certiorari in order to restore theuniform application of the Indian Gaming RegulatoryAct (IGRA), 25 U.S.C. § 2701 et seq., and to preservethe sovereign authority of Indian tribes and states toengage in tribal-state gaming compact negotiationswithout unwarranted federal entanglement.
A. The United States’ View Of Compact Negoti-ations Would Eliminate The Notions Of Co-operative Federalism That Animate IGRA’sCompact Requirement
The State does not dispute the United States’contention that the principal purpose of IGRA is toadvance tribal interests in economic development.§ 2702.1 However, sharing gaming revenue with theState that has provided exclusive casino gamingrights in the Nation’s most lucrative gaming marketis not inimical to tribal interests. In Artichoke Joe’s v.Norton, 353 F.3d 712, 715 (9th Cir. 2003), the Ninth
~ All citations are to Title 25 of the United States Code,unless otherwise indicated.
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Circuit Court of Appeals characterized IGRA as anexample of "cooperative federalism," which seeks tobalance the sovereign interests of the federal gov-ernment, state governments, and Indian tribes. Inrecent years, the State, and a number of Californiatribes that a~eed to share gaming revenues, tookthis notion to heart in the belief that general fundrevenue shar.ing would form the political foundationfor a long-term, stable gaming relationship. App., 56,106, n. 19. Under this approach, tribes would remainthe primary beneficiaries of casino gaming in Califor-nia, but non-tribal citizens would also derive somebenefit in the form of revenue to the general fund.This, it was hoped, would maintain political supportfor tribal gaming exclusivity and forestall efforts toamend the California Constitution to expand casinogaming to non-tribal operators. The loss of exclusivitywould place mostly remote tribal casinos at a signifi-cant competitive disadvantage, likely driving manyout of business.
The court of appeals’ decision would end thispartnership, and the United States apparently seesno reason to preserve it. Although the Senate Reportto IGRA identifies the State’s governmental interestsin compact negotiations as "including its economicinterest in raising revenue for its citizens," S. Rep.No. 446, 100th Cong., 2d Sess. 13 (1988), the UnitedStates denies the relevance of the State’s own eco-nomic interests, and concludes that "[n]othing in thetext of IGRA supports the State’s contention that abroad interest in generating revenue for the State is apurpose of the statute." U.S. Amicus, 13-14. Under
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this view, the State will be compelled to enter negoti-ations in which it has little prospect of achievingmeaningful benefit. Such negotiations will provide aweak foundation for productive tribal-state relations.
The United States contends this case is factbound, with limited potential impact beyond thenegotiations involving the Rincon Band and the Stateof California (U.S. Amicus, 10), the reality is verydifferent. A number of California Indian tribal repre-sentatives have informed the Governor’s Office2 thatthey interpret the court of appeals’ decision, and theconstruction given it by the Secretary of the Depart-ment of the Interior, to establish that California hasnothing left to negotiate, and so has no prospect ofobtaining meaningful concessions from tribes seekingeither their first gaming compact, or enhancementsto gaming rights in existing compacts. The Stateanticipates that if the court of appeals decision isnot reversed, numerous tribes will seek to amendtheir gaming compacts to enhance their gamingrights, and eliminate general fund revenue sharingwhere it exists. Indeed, three tribes have explicitlyrepresented such an intention. It would be naive tobelieve others will not follow.
The decision below is particularly significant asCalifornia anticipates compact renegotiations with
~ The California Constitution establishes that the Governorof California is responsible for conducting tribal-state gamingcompact negotiations under IGRA. Cal. Const., art. IV, § 19,subd. (f).
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potentially dozens of tribes. The court of appeals andthe United States both viewed the State’s "negotiat-ing tactics" in this case as particularly oppressive dueto the "plain fact" that tribes and states do notcompact negotiations "voluntarily," becm~.~~ %he tribemay not engage in g~ming witb~.’,~ a compact." Pet.App., 22-23; U.S. Ami.-::_~, 16. This notion is derivedfrom IGRA’s Senate Report, where it is explained thatthe good faith negotiation requirement was imposedon states alone to balance IGRA’s allocation of bar-gaining power, under which tribes would need acompact to conduct casino-style gaming, but statesmight be disinterested in bargaining. S. Rep. No. 446,supra, at 13-15. In this case, however, when theRespondent Rincon Band sought compact renegotia-tions with the State, it already had a compact underwhich it operated 1,600 slot machines (App., 8), andwhich compact even the court of appeals described asconferring "a valuable economic right.., in exchangefor a program under which all of the significantbenefits" were enjoyed by the Rincon Band. JudgeBybee described the compact as "the Band’s sweet-heart deal." App., 119 (Bybee, J., dissenting). Accord-ingly, the suggestion that the Rincon Band’s entryinto the 2004 compact renegotiations was involun-tary, is simply false. Yet, this falsehood will infect allfuture compact renegotiations in California if thecourt of appeals’ decision is allowed to stand.
Accordingly, the court of appeals’ decision placesin jeopardy $364 million in annual general fund reve-nue estimated to be received from California tribes
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under compacts negotiated since 2004.3 This is a par-ticularly significant concern at a time "when theState of California is facing an unprecedented budg-etary shortfall." Brown v. Plata, __ U.S. __., slip op.at 32 (20tl). If the court of appeals’ decision is up-held, IGRA’s compacting process will be severelyundermined by ensuring that one party to the negoti-ations has little incentive to engage.
Even accepting the United States’ view that thiscase’s impact is limited to California, the Court shouldstill grant the petition because California is home to108 Indian tribes, each of which has an interest inmaintaining a stable gaming environment in Califor-nia that the court of appeals’ erroneous ruling unset-tles. Because there is no prospect of another caseaffording an opportunity to review the issues pre-sented by the petition before the State enters anotherround of tribal-state compact negotiations, the Courtshould grant the petition.
B. The Court Of Appeals’ Decision Has Ad-versely Impacted The Secretary Of The In-terior’s Review Of Negotiated Compacts, ToThe Detriment Of Tribes And The State
The United States characterizes as "unfounded"the State’s concern that the court of appeals decision
~ See California Budget Summary, Revenue Estimates, pp.62-63 (available at the URL http://www.ebudget.ca.gov/pdf]Budget Summary/RevenueEstimates .pdf).
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has resulted in erroneous decision making by theInterior Secretary. U.S. Amicus, 18. In addition to the
Secretarial decisions discussed in the Petition (Pet.29-31), the recent Secretarial disapproval of thenegotiated compact between the State of California
and the Pinoleville Pomo Nation underscores thatthis concern has substantial merit. The Pinolevillecompact, first submitted to the Secretary on February
11, 2010, would authorize the Pinoleville Tribe tooperate up to 900 slot machines, and contribute afifteen percent revenue share to the State’s general
fund in exchange. After acknowledging that the courtof appeals’ decision formed an "important part" of hisanalysis, the Secretary found:
that the exclusivity provided by Proposition1A constitutes a meaningful concession but... it does not confer a substantial economicbenefit on the Tribe sufficient to justify 15-percent revenue sharing.
Echo Hawk-Williams Letter, Feb. 25, 2011, pp. 2-3.This statement seems to be very much at odds withthe court of appeals’ reasoning that the State could nolonger contend that the exclusivity provided byProposition 1A is a meaningful concession in compactnegotiations. In the end, the result is the samebecause the Secretary concluded that Proposition 1Awas not meaningful enough.
Yet the concern that lingers after the recentsecretarial disapprovals of California compacts is thatstates seeking to justify negotiated general fundrevenue sharing provisions in gaming compacts now
face a gauntlet of at least three subjective standardsthat are found nowhere in the text of IGRA: whethera "meaningful concession" has been offered (App., 36-48); whether the meaningful concession offers a"substantial economic benefit" (Echo Hawk-WilliamsLetter, p. 3); and whether the "relative values ofconcessions offered [were] greatly disproportionate"(U.S. Amicus, 15). Unless the court of appeals’ deci-sion is reversed, these subjective standards willappear either in federal litigation over a state’s goodfaith under § 2710(d)(7), or in the Secretary’s reviewof negotiated compacts under § 2710(d)(8). In eithercircumstance, the application of such standards willsubvert the sovereign negotiations Congress envi-sioned. 25 U.S.C. § 2710(d)(3).
C. The United States’ Application Of IGRA ToRevenue Sharing Is Not Uniform, Is Un-workable, And Is Unrooted In IGRA.
In an effort to downplay the national importanceof this case, the United States asserts that the courtof appeals’ decision is only applicable in California,the nation’s largest gaming market, and is thereforefact bound and intertwined with the construction ofCalifornia’s Constitution:
No other State has a constitutional provisiongranting tribal gaming exclusivity, therebydivesting the State of leverage it might other-wise have to request revenue sharing in classIII gaming compacts. The court of appeals’decision therefore will not affect the ability of
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other States to offer some form of exclusivityin exchange for revenue sharing with atribe ....
California, alone among the States, wouldhave to offer tribes something other than ex-clusivity if it wanted to obtain a share oftribal gaming revenue to be paid into theState’s general fund as a condition of ex-panded gaming operations.
U.S. Amicus, 17, 21. It is true that buried in this caseare questions of state law the court of appeals refusedto certify to the California Supreme Court, and thendecided in error (see Pet. Reply, 2-6, and accompany-ing notes). However, these issues need not be reachedon the questions presented by the Petition.
The United States’ acknowledgement that Cali-fornia is alone among states offering exclusive tribalgaming rights to be barred from seeking general fundrevenue sharing is noteworthy because it shows IGRAis not uniformly applied among similarly-situatedstates. However, the assertion that the case is factbound, and so unworthy of review (U.S. Amicus, 17),misses the point of the first question on which reviewshould be granted: whether negotiations for a generalfund share of tribal gaming revenue constitute ademand for direct taxation. If such negotiations donot constitute a demand for direct taxation, the courtof appeals’ subjective inquiry into the nature of"meaningful concessions" need not be reached.
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Additionally, the United States’ conception ofwhat constitutes a "demand for direct taxation"within the meaning of § 2710(d)(7)(B)(iii)(II) has nobasis in the text of IGRA, and is unworkable inpractice. According to the United States, whether astate demands direct taxation (which IGRA deemsevidence of a lack of good faith) is determined bylooking at what is offered in exchange, and assessingwhether it is "meaningful." U.S. Amicus, 14. Underthis view, the phrase "demand for direct taxation" in§2710(d)(7)(B)(iii)(II) has no statutory meaningindependent of the subjective views of the negotiatingtribe, a court adjudicating a state’s good faith, or theSecretary exercising his compact approval authority.This construction of IGRA leaves the State in animpossible negotiating posture, under which its goodfaith is measured not by its own intentions andactions, but by how they are received. This furtherillustrates why it is important for this Court to estab-lish an objective understanding of when a demand fordirect taxation is made.
The resolution of this issue is of urgent nationalimportance. States must know whether their negotia-tions for revenue sharing will embroil them in thesubjective, fact based inquiry the court of appeals’decision would demand in litigation over a State’sgood faith, and the Interior Secretary is applying tothe compact approval process.
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CONCLUSION
The petition for a writ of certiorarigranted.
Respectfully submitted,
MARC A. LEFORESTIER
Supervising Deputy Attorney General
KAMALA D. HARRISAttorney General of CaliforniaMANUEL MEDEIROSState Solicitor GeneralSARA J. DRAKE
Senior Assistant Attorney General1300 1 St., Suite 125Sacramento, CA 95818(916) 322-5452
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