Redding Rancheria v. Kenneth Salazar

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

REDDING RANCHERIA, No. 12-15817

Plaintiff-Appellant,

D.C. No.

v. 3:11-cv-01493-

SC

SALLY JEWELL, in her official

capacity as Secretary of the United

States Department of the interior; OPINION

KEVIN K. WASHBURN, in his official

capacity as the Assistant Secretary

for Indian Affairs for the United

States Department of the Interior,*

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of California

Samuel Conti, Senior District Judge, Presiding

Argued and Submitted

April 8, 2014—San Francisco, California

Filed January 20, 2015

Before: Mary M. Schroeder, Kermit Victor Lipez**,

and Consuelo M. Callahan, Circuit Judges.

*

Sally Jewell and Kevin K. Washburn are substituted for their

predecessors pursuant to Fed. R. App. P. 43(c)(2).

**

The Honorable Kermit Victor Lipez, Senior United States Circuit

Judge for the First Circuit, sitting by designation.

2 REDDING RANCHERIA V. JEWELL

Opinion by Judge Schroeder;

Partial Concurrence and Partial Dissent by Judge Callahan

SUMMARY***

Tribal Matters

The panel affirmed the district court’s judgment in favor

of the federal government insofar as it upheld the Secretary

of the Interior’s denial of the application of Redding

Rancheria (the Tribe) to operate multiple casinos on restored

lands, and reversed in part and remanded to the agency for

consideration of the Tribe’s proposal to close its existing

Tribal gaming operation upon construction of a new facility.

The Secretary denied the Tribe’s request to take into trust

a substantial parcel the Tribe recently acquired for the

construction and operation of a new gambling casino. The

Indian Gaming Regulatory Act generally banned gaming on

lands that tribes acquired after its enactment in 1988, but

created an exception for tribes with restored lands. The

agency denied the Tribe’s application because, at the time it

was submitted, the Tribe was operating a modest casino on

land it acquired earlier. The district court granted summary

judgment to the government because the Tribe was seeking

to operate multiple casinos, which the applicable regulations

sought to prevent. While the application was pending, the

Tribe advised the agency that it was willing to close down its

original casino once the new one was in operation.

***

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

REDDING RANCHERIA V. JEWELL 3

The panel held that the regulation at issue was reasonable,

and the Secretary reasonably implemented the restored lands

exception. The panel further held that the Indian canon

(which provides that where a statute is unclear, it must be

liberally interpreted in favor of Indians) did not apply in the

circumstances of this case. The panel also held that the

Secretary’s denial of the Tribe’s application was not

inconsistent with prior agency practice, and was not arbitrary

and capricious.

The panel held that the agency should have considered the

Tribe’s alternative offer to move all gaming to the new

casino, and vacated in part the district court’s summary

judgment with instructions to remand to the agency to address

the issue.

Judge Callahan concurred in parts I, II, and III of the

majority’s opinion; and agreed that the regulation at issue was

reasonable, the Indian canon did not apply, and there was no

unexplained change in agency policy. Judge Callahan

dissented from part IV of the opinion because the Tribe did

not fairly prompt the Secretary to consider its alleged offer to

move its casino and did not ask the district court to consider

the alleged offer to remove the casino. Judge Callahan would

not reverse in part and remand for further consideration.

4 REDDING RANCHERIA V. JEWELL

COUNSEL

Scott D. Crowell (argued) and Scott Wheat, Crowell Law

Offices, Spokane, Washington, for Plaintiff-Appellant

Redding Rancheria.

Ignacia S. Moreno, Assistant Attorney General, Matthew

Marinelli and Lane N. McFadden (argued), Attorneys, United

States Department of Justice, Environment & Natural

Resources Division, Washington, D.C., for Defendants-

Appellees Sally Jewell, Secretary of the Department of the

Interior and Kevin K. Washburn, Assistant Secretary for

Indian Affairs.

George Forman and Jay B. Shapiro, Forman & Associates,

San Rafael, California, for Amicus Curiae Robinson

Rancheria of Pomo Indians.

OPINION

SCHROEDER, Senior Circuit Judge:

The Redding Rancheria (“the Tribe”) is a very small

Indian tribe trying to restore the Reservation that was taken

away by the United States during the mid-Twentieth century

era of assimilation. See City of Roseville v. Norton, 348 F.3d

1020, 1022 (D.C. Cir. 2003); see also William C. Canby,

American Indian Law in a Nutshell 27–30 (5th ed. 2009)

(describing the federal government’s general policy of

terminating tribal recognition in order to assimilate Indian

populations); Felix S. Cohen, Federal Indian Law §1.06

(2005) (noting that, starting in the 1950s, the federal

government began an official “policy of rapid assimilation

REDDING RANCHERIA V. JEWELL 5

through termination”). The Tribe also wishes to establish a

successful gaming operation on its land. For that purpose, it

has asked the Department of the Interior to take into trust a

substantial parcel the Tribe recently acquired for the

construction and operation of a new gambling casino. The

Secretary of the Interior (“Secretary”) denied the request.

The Indian Gaming Regulatory Act (“IGRA”) generally

bans gaming on lands that tribes acquire after its enactment

in 1988, but creates an exception for tribes with restored

lands. 25 U.S.C. § 2719. This case concerns the regulations

the Secretary of the Interior has promulgated to define and

place reasonable limits on the restored lands exception. The

agency found the Tribe’s application did not qualify because,

at the time it was submitted, the Tribe was operating a modest

casino on land that it acquired earlier. The district court

granted summary judgment for the government because the

Tribe was seeking to operate multiple casinos, something the

applicable regulations unquestionably and reasonably are

intended to prevent. While the application was pending

before the agency, however, the Tribe advised the agency that

it was willing to close down its original casino once the new

one was in operation. The agency did not meaningfully

address the Tribe’s alternative position. We remand to the

agency so that it can do so.

FACTS

The Redding Rancheria was first recognized by the

United States in 1922, with a reservation of about 30 acres

located in rural Northern California. In 1965, however, it was

stripped of its federal recognition pursuant to the California

Rancheria Act, Pub. L. No. 85-671, 72 Stat. 619 (1958). The

act was part of a general effort to assimilate Indians into

6 REDDING RANCHERIA V. JEWELL

American society. See City of Roseville, 348 F.3d at 1022.

The Tribe eventually joined other California tribes in bringing

suit against the United States, see Hardwick v. United States,

No. C-79-1710 (N.D. Cal. Dec. 22, 1983), and as part of a

resulting settlement, tribal federal recognition was restored in

1984.

The Tribe then embarked on a series of acquisitions to

restore lands to its reservation, and, per its request, each has

been taken into trust by the United States, for a total of about

8.5 acres. Roughly 2.3 acres were taken into trust for

individual tribe members as part of the settlement agreement

in Hardwick. The United States accepted the Tribe’s trust-to-

trust transfer request for these parcels in 1992, and the Tribe

began operating a small casino, known as the Win-River

Casino, on the 2.3 acre parcel after entering into a gaming

compact with the state of California in 1999. The Tribe has

since submitted several additional land requests. The first,

begun in 1996, was for a Head Start facility, and the

application was not completed and accepted until 2009.

Another application, submitted in 2000 and also accepted in

2009, was for a burial ground of .5 acres. In 2010, an

application for administrative buildings was accepted.

According to the Tribe, its land restoration efforts have often

been hampered by lack of funds and the unavailability of

nearby land.

In 2003, the Tribe submitted a request to the Department

of the Interior to take into trust an additional 152 acres (“the

Strawberry Fields”), so the Tribe could construct another

casino. After the Tribe submitted a completed application on

December 22, 2008, it amended the application in July of

2010 to include an additional 80 acres. Shortly before the

Secretary denied the application, the Tribe wrote a letter to

REDDING RANCHERIA V. JEWELL 7

the agency, dated December 14, 2010, stating the Tribe was

willing to close its current gaming facilities once its new

facility was built. The Secretary denied the Tribe’s

application on December 22, 2010, finding that, under the

applicable regulations, the Tribe could not conduct gaming on

newly acquired lands because it was already gaming on other

lands.

The key statute governing the Tribe’s gaming activities is

the portion of IGRA that covers “restored” tribes. Congress

passed IGRA in 1988 “as a means of promoting tribal

economic development, self-sufficiency, and strong tribal

governments.” 25 U.S.C. § 2702. IGRA permits Indian

tribes to conduct gaming on tribal lands subject to certain

limitations. Section 2719(a) prohibits tribes from gaming on

lands taken into trust after IGRA’s 1988 passage date, but

that section includes Exemptions and Exceptions. Of

relevance is section 2719(b)(1)(B), which allows restored

tribes to game on any land taken into trust as part of a

“restoration of lands” (the “restored lands exception”). There

is no dispute that the Tribe is a “restored tribe” within the

meaning of the statute. The issue is whether the land in

question is “restored land.”

To define and place reasonable limits on the exceptions,

the Secretary of the Interior, in 2008, promulgated a series of

rules implementing section 2719 of IGRA. 25 C.F.R.

§ 292.1. The purpose of these rules was to “explain to the

public how the Department interprets” IGRA’s various

exceptions and exemptions, including the restored lands

exception. 73 Fed. Reg. 29,354. Under the Secretary’s

interpretation, lands qualify as “restored” and can thus be

used for gaming purposes only if the tribe establishes a

sufficient relationship to the land in what the regulations term

8 REDDING RANCHERIA V. JEWELL

“modern,” “historical,” and “temporal” connections to the

Tribe’s original land. 25 C.F.R. § 292.12. At issue here is

only the temporal connection. A tribe can demonstrate a

“temporal” connection in one of two ways:

(1) The land is included in the tribe’s first

request for newly acquired lands since the

tribe was restored to Federal recognition; or

(2) The tribe submitted an application to take

the land into trust within 25 years after the

tribe was restored to Federal recognition and

the tribe is not gaming on other lands.

25 C.F.R. § 292.12(c) (emphasis added). The Strawberry

Fields were not included in the Tribe’s first request for newly

acquired lands, so subsection (1) does not apply. The

application was filed within 25 years of recognition, but

because of the last proviso of subsection (2), the Win-River

Casino became the stumbling block. The Tribe was operating

a casino on other lands.

The application remained pending for more than seven

years. Then the Tribe, on December 14, 2010, wrote to the

Secretary to advise that it would close the Win-River Casino

when the new casino was completed. Eight days later, the

Secretary denied the application, stating that “[b]ecause the

Tribe cannot meet the standards articulated in Section 292,

the Parcels are not eligible for the restored lands exception.”

The denial did not address the Tribe’s December 14 letter

proposing to close the Win-River Casino.

REDDING RANCHERIA V. JEWELL 9

The Tribe then brought suit in the Northern District of

California, challenging the Secretary’s determination that the

Strawberry Fields are not covered by the restored lands

exception. The Tribe argued that the regulation’s limitation

on operating a second casino was unreasonable. The court

granted summary judgment in favor of the Secretary,

concluding that the Secretary had the power to promulgate

regulations under IGRA, that the Secretary’s interpretation of

the restored lands exception was reasonable, and that the

Secretary did not act arbitrarily and capriciously in denying

the Tribe’s request to operate two casinos, but did not address

the Tribe’s alternative proposal to close the first casino once

the new one was operational.

The Tribe now appeals. It contends that the regulations

are arbitrary and capricious in limiting tribes to one casino on

restored lands. It further contends that, even if the limitation

is reasonable, the Secretary was arbitrary and capricious in

denying its application even though it had offered to close the

first casino so that the application would not result in more

than one casino. We uphold the reasonableness of the

regulation itself, but direct the agency to consider whether the

regulation bars the Tribe’s moving its casino operation from

the old casino to a new one.

DISCUSSION

I. The Regulation is Reasonable

In promulgating the regulation at issue here, the Secretary

was implementing the restored lands exception to the general

statutory ban on tribes using land acquired after IGRA for

gaming. The restored lands exception therefore must be read

in the context of IGRA’s general prohibition against gaming

10 REDDING RANCHERIA V. JEWELL

on lands acquired after 1988. The exception was not intended

to give restored tribes an open-ended license to game on

newly acquired lands. Rather, its purpose was to promote

parity between established tribes, which had substantial land

holdings at the time of IGRA’s passage, and restored tribes,

which did not. See City of Roseville, 348 F.3d at 1030. In

administering the restored lands exception, the Secretary

needs to ensure that tribes do not take advantage of the

exception to expand gaming operations unduly and to the

detriment of other tribes’ gaming operations.

To that end, the Secretary promulgated a series of

requirements a tribe must satisfy in order to demonstrate that

newly acquired lands are part of the effort to restore a

reservation and are therefore eligible for gaming. To benefit

from the restored lands exception, a tribe must establish a

“modern,” “historical,” and “temporal” connection to tribal

land. 25 C.F.R. § 292.12. Because these factors are general,

the regulation further defines each.

The “modern” connection means that the land is within

the state or states in which the tribe is currently located and

is, by at least one of several measures prescribed by the

regulation, in close proximity to the tribe’s other lands.

25 C.F.R. § 292.12(a). The Secretary concluded that the

Tribe satisfied this requirement. The Secretary also

concluded that the Tribe satisfied the “historical” connection

under 25 C.F.R. § 292.12(b) because the land in question is

next to historic lands.

In order to establish a “temporal connection,” the tribe

must demonstrate either (1) that the land was part of the

tribe’s first request for newly acquired lands after being

restored to federal recognition, or (2) that it submitted an

REDDING RANCHERIA V. JEWELL 11

application to take the land into trust within 25 years after

being restored, and that it is not currently gaming on other

lands. Id. § 292.12(c). As the Secretary stated in the

preamble to 25 C.F.R. § 212(c), “the temporal limitation

effectuates IGRA’s balancing of the gaming interests of

newly acknowledged and/or restored tribes with the interests

of nearby tribes and the surrounding community.” 73 Fed.

Reg. 29,367.

In this way, the regulation strikes a balance between

allowing restored tribes to game on newly acquired lands,

while at the same time protecting the interests of established

tribes. Section 292.12(c) allows a tribe to game on any lands

that were acquired as part of its first request for lands after

regaining federal recognition, but it limits gaming on lands

acquired as part of subsequent requests. After a tribe’s first

request for land is granted, it can only game on newly

acquired lands if it requests that these lands be taken into trust

within 25 years of restoration, and it is not already gaming

elsewhere. 25 C.F.R. § 292.12(c)(2). As a result, once a

restored tribe builds a casino, it cannot build additional

casinos on newly acquired lands. Without this limitation,

restored tribes would be able to expand their gaming

operations indefinitely. This would give them an unfair

advantage over established tribes who generally cannot game

on any lands acquired after IGRA was passed. 25 U.S.C.

§ 2719(a).

The Tribe contends that the limitation is nonetheless

unreasonable because it is not contained in the statute. The

statute, of course, merely creates an exception for restored

lands, without attempting to define the term or dictate how it

should be administered. Congress authorized the Secretary

to promulgate regulations to achieve those purposes, as is

12 REDDING RANCHERIA V. JEWELL

standard practice in today’s understanding of administrative

law. Thus an agency charged with administering a statute has

the power to make rules “to fill any gap left, implicitly or

explicitly, by Congress.” Morton v. Ruiz, 415 U.S. 199, 231

(1974).

The Administrative Procedure Act accordingly sets forth

procedures by which agencies promulgate rules “to

implement, interpret, or prescribe law or policy.” 5 U.S.C.

§ 551(4). When an agency uses this rule making authority to

define a general or ambiguous provision of a statute, its

interpretation is owed deference so long as it is reasonable.

United States v. Mead Corp., 533 U.S. 218, 229 (2001)

(citing Chevron, U.S.A., Inc. v. Natural Res. Def. Council,

Inc., 467 U.S. 837, 845 (1984)).

We conclude that the Secretary reasonably implemented

the restored lands exception, to limit the extent to which a

restored tribe may operate gaming facilities on restored land,

in order to ensure parity between restored and established

tribes. There is nothing unreasonable about the regulation’s

intent to prevent restored tribes from acquiring additional

land to operate multiple gaming operations.

II. The Indian Canon Does Not Apply

In Indian law there is a canon that, where a statute is not

clear, it must be interpreted liberally in favor of Indians. This

canon was most recently articulated by the Supreme Court in

Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 766

(1985). The Tribe therefore asserts that even if the regulation

could be viewed as reasonable, the Blackfeet presumption

precludes the Secretary from prohibiting additional gaming

on restored lands.

REDDING RANCHERIA V. JEWELL 13

The Tribe points out that no such “numerical limitation”

is clearly expressed within the language of the statute. See

25 U.S.C. § 2719(b)(1)(B)(iii). The Tribe’s position is that,

because the limitation is contrary to the interests of the Tribe,

we must apply the canon to hold that the numerical limitation

violates Congressional purpose. The government, on the

other hand, points to a competing presumption of deference

to agency interpretation of a statute. See Chevron, 467 U.S.

at 845.

The Tribe’s argument seems foreclosed by precedent in

this Circuit. This court has repeatedly “declined to apply [the

Indian law canon of construction] in light of competing

deference given to an agency charged with the statute’s

administration.” Haynes v. United States, 891 F.2d 235, 239

(9th Cir. 1989); see also Seldovia Native Ass’n, Inc. v. Lujan,

904 F.2d 1335, 1342 (9th Cir. 1990). We have said this is

because the Blackfeet presumption is merely a “guideline,”

whereas “Chevron is a substantive rule of law.” Williams v.

Babbitt, 115 F.3d 657, 663 n.5 (9th Cir. 1997). In this circuit,

an agency’s legal authority to interpret a statute appears to

trump any practice of construing ambiguous statutory

provisions in favor of Indians.

Even if the Blackfeet presumption might be applied in

some circumstances in our circuit, however, it would not

apply in this case. This is because all tribal interests are not

aligned. An interpretation of the restored lands exception that

would benefit this particular tribe, by allowing unlimited use

of restored land for gaming purposes, would not necessarily

benefit other tribes also engaged in gaming. It might well

work to their disadvantage.

14 REDDING RANCHERIA V. JEWELL

The canon should not apply in such circumstances. The

canon has been applied only when there is a choice between

interpretations that would favor Indians on the one hand and

state or private actors on the other. For example, in Blackfeet

itself, the Supreme Court applied the canon in a dispute

between state and tribal interests, interpreting the 1938

Mineral Leasing Act. The Court concluded that the statute

should not be read to permit the state of Montana to tax

Indian royalty income from mineral leases, because the Act

did not expressly authorize state taxation of Indian royalty

interests. 471 U.S. at 767. In the absence of such an express

authorization, the statute had to be interpreted in favor of the

Indians. This court has explained that the Blackfeet

presumption does not apply when tribal interests are adverse

because “[t]he government owes the same trust duty to all

tribes.” Confederated Tribes of Chehalis Indian Reservation

v. Washington., 96 F.3d 334, 340 (9th Cir. 1996). It cannot

favor one tribe over another. The district court therefore

correctly refused to apply the Indian canon in the

circumstances of this case.

III. There Has Been No Unexplained Change in

Agency Policy

The Tribe argues that the Secretary’s denial of its

application was inconsistent with prior agency practice and

therefore arbitrary and capricious. The Tribe points to a

single past agency decision that permitted the Elk Valley

Rancheria to game on restored lands even though it was

already gaming on other lands. The Elk Valley decision was

before the promulgation of 25 C.F.R. § 292.12 in 2008 and

before the Tribe’s application was completed in 2010.

REDDING RANCHERIA V. JEWELL 15

It is not entirely clear that the Elk Valley decision would

have been any different under the current regulation. Under

the current regulation, a tribe may game on lands provided

that they are “included in the tribe’s first request for newly

acquired lands since the tribe was restored to federal

recognition” regardless of whether the tribe is already gaming

elsewhere. 25 C.F.R. § 292.12. The administrative decision

is a part of our record and states that the lands on which the

Elk Valley Rancheria sought to conduct gaming were part of

“the first parcels requested by the Tribe to be acquired into

trust.”

What is more, an agency is permitted to change its policy

so long as it provides some minimal explanation for the

change. See Morales-Izquierdo v. Gonzales, 486 F.3d 484,

493 (9th Cir. 2007). Even assuming the Elk Valley decision

was inconsistent with the current regulation and the agency’s

treatment of the Tribe’s application in this case, the agency

provided a sufficient explanation for its change of policy. In

promulgating 25 C.F.R. §292.12, the agency stated that it

wanted to “explain to the public how the Department

interprets th[is] exception[ ].” 73 Fed. Reg. 29,354. It further

explained, that the temporal requirement was designed to

“effectuate[ ] the IGRA’s balancing of the gaming interests

of . . . restored tribes with the interests of surrounding tribes

and the nearby community.” Id. at 29,367. More extensive

explanation was not required. See Robles-Urrea v. Holder,

678 F.3d 702, 710 n.6 (9th Cir. 2012) (noting that even a

“sparse” explanation suffices).

16 REDDING RANCHERIA V. JEWELL

IV. The Agency Should Have Considered the Tribe’s

Alternative Offer to Move All Gaming to the New

Casino

Once a restored tribe has acquired restored lands, and

built a casino, the regulation bars use of subsequent

acquisitions to operate additional casinos. It is undisputed

that the Tribe was operating the Win-River Casino when it

submitted its application for the new Strawberry Fields

casino. The Tribe’s 2008 application thus contemplated the

construction of a second casino. There were apparently

discussions between the parties, because in December 2010

the Tribe wrote to the Secretary offering to “memorialize” its

intent to move its gaming operations from its current location

to the Strawberry Fields. The Tribe argues that the Secretary,

in denying the Tribe’s application, arbitrarily failed to

consider the Tribe’s 2010 representation that it would not

operate multiple gaming facilities. The Secretary denied the

Tribe’s application without any mention of the Tribe’s offer,

although the denial emphasized the specific wording of the

regulation that conditions the requisite temporal connection

on a finding that the tribe “is not gaming on other land.”

25 C.F.R. § 292.12(c)(2). The district court did not consider

the Tribe’s alternative offer and construed its application as

if it necessarily contemplated the operation of multiple

casinos.

An agency’s decision is arbitrary and capricious if it

ignores important considerations or relevant evidence on the

record. See Port of Seattle, Wash. v. F.E.R.C., 499 F.3d

1016, 1035 (9th Cir. 2007) (citing Motor Vehicle Mfrs. Ass’n

of U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43

(1983)). The Secretary did not address the Tribe’s

willingness to close its current casino in order to move its

REDDING RANCHERIA V. JEWELL 17

gaming operations to one on newly restored lands. The

agency now argues, however, that the Secretary’s

determination was required by the plain meaning of the

regulation.

Under 25 C.F.R. § 292.12(c)(2), land is eligible for

gaming if the application is submitted within 25 years after

the tribe was restored to federal recognition and “the tribe is

not gaming on other lands.” The regulation thus has both a

25 year deadline and a prohibition against gaming on other

lands. The agency must look to the date on which a tribe

submits its application to determine whether it has satisfied

the 25 year deadline. The regulation is not clear, however,

that the agency must also look to the date of the application

to determine whether the tribe has satisfied the prohibition

against gaming on other lands. While the regulation could be

so interpreted, the agency has so far provided no reason why

it should. Allowing a restored tribe to move a casino does not

appear to conflict with the statutory purpose of ensuring

parity among restored and established tribes. Restored tribes,

if allowed to operate an indefinite number of casinos on

newly restored lands, would of course have an advantage over

established tribes, but it is not clear that allowing restored

tribes to move a casino to a different location would

necessarily have the same effect.

The agency can point out that we generally defer to an

agency’s interpretation of its own regulation. See Auer v.

Robbins, 519 U.S. 452, 461 (1997). The administrative

proceedings in this case, however, did not address this issue

of interpretation, much less provide any reasons for the

agency’s current position. The agency presented its position

for the first time in its brief, and it offered sparse explanation

for it. We need not defer to an agency position when taken

18 REDDING RANCHERIA V. JEWELL

for purposes of litigation. See Christopher v. SmithKline

Beecham Corp., 132 S. Ct. 2156, 2166–67 (2012) (noting that

“an interpretation is not owed deference when it is nothing

more than a convenient litigating position or a post hoc

rationalizatio[n] advanced by an agency seeking to defend

past agency action against attack.”) (internal citations and

quotation marks omitted) (alterations in original). The

agency’s interpretation on the administrative record before us

lacks explanation or justification.

In remanding to the agency we expedite the agency’s

consideration of the Tribe’s alternative proposal. We do not

tell the agency what to say. While the dissent may speculate

on how and why the agency interprets the regulation, the

agency has never addressed these issues. We cannot defer to

what the agency has not done.

We accordingly vacate in part the district court’s grant of

summary judgment with instructions to remand to the agency

to address whether the Tribe should be permitted to construct

a new casino to replace the existing one.

CONCLUSION

The judgment of the district court in favor of the

government is affirmed insofar as it upholds the Secretary’s

denial of the Tribe’s application to operate multiple casinos

on restored lands. The judgment is reversed in part, and the

case remanded to the district court with instructions to

remand to the agency for consideration of the Tribe’s

REDDING RANCHERIA V. JEWELL 19

proposal to close its existing gaming operation upon

construction of a new facility.

AFFIRMED in part, REVERSED and REMANDED in

part. Each side to bear its own costs.

CALLAHAN, Circuit Judge, concurring and dissenting:

I concur in parts I, II and III of the majority’s opinion. I

agree that the regulation here at issue is reasonable, the Indian

canon does not apply, and there has been no unexplained

change in agency policy. In other words, I agree that the

Secretary reasonably rejected the Tribe’s challenges to the

underlying regulation. However, I dissent from part IV of the

opinion because the Tribe did not fairly prompt the Secretary

of the United States Department of Interior (“the Secretary”

or “the Department”) to consider its alleged offer to move its

casino and did not ask the district court to consider the

alleged offer to move the casino. Moreover, on this record,

there is no basis for suggesting that the such an offer would

merit relief under the regulation. Our sympathy for a small,

struggling tribe does not justify formalizing a claim that was

never clearly presented to the Secretary, was not fairly

presented to the district court, and is of questionable merit.

Our opinion should conclude this litigation.

I

As the opinion notes, the Tribe made its application in

2003. The application was supplemented on several

occasions, including on December 22, 2008, and on October

29, 2010. There is nothing in either of these detailed

20 REDDING RANCHERIA V. JEWELL

supplements that suggests that the Tribe contemplated closing

its Win-River Casino if its application for Strawberry Fields

was approved.

Negotiations continued through a meeting in November

15, 2010. It appears that the possibility that the Tribe might

close its Win-River Casino if it were allowed to build a

casino on Strawberry Fields was first raised in a letter dated

December 14, 2010, from Barbara Murphy, Vice

Chairperson, Redding Rancheria, to Del Laverdue, Deputy

Assistant Secretary - Indian Affairs, Department of Interior.

The letter stated:

Since our meeting in Albuquerque, the Tribal

Council has met and discussed our options

with regard to this application, and we are

determined to do whatever is necessary to

alleviate any concerns you may have about

our current landholdings and gaming

operation.

Accordingly, while we contend that our

existing gaming facility does not preclude us

from obtaining a restored lands opinion for

Strawberry Fields, I want to personally assure

you of our intent to close our existing facility

and relocate our gaming operation to the

Strawberry Fields property. Additionally, we

are willing to memorialize this intent in an

agreement with the Department and look

forward to talking to you about [t]his further.

Several features of this letter are relevant. First, the Tribe

continues to press its contention that its “existing gaming

REDDING RANCHERIA V. JEWELL 21

facility does not preclude [it] from obtaining a restored lands

opinion for Strawberry Field.” Second, the letter offers only

the Vice Chairperson’s personal assurance of the Tribe’s

intent to relocate its casino to Strawberry Fields. Third, the

letter asserts that the Tribe is “willing to memorialize this

intent.” Fourth, the Vice Chairperson indicates that she looks

forward to talking to the Deputy Assistant Secretary about

this matter.

Thus, it is doubtful that the December 14 letter can, or

should, be read as conveying a formal offer by the Tribe to

close the Win-River Casino once the Strawberry Fields

Casino opened. Rather, the Vice-Chairperson offered her

personal assurance as to the Tribe’s intent and that the Tribe

was “willing to memorialize this intent in an agreement.”

Moreover, the letter does not contain any argument or

explanation as to why the Tribe’s offer to move its casino

might be relevant to the Secretary’s consideration of the

Tribe’s application. Particularly in light of the questionable

relevance of this offer to the Secretary’s analysis (see part III,

infra), the letter is best understood as an attempt to continue

negotiations: an effort to negotiate a last minute deal.

Eight days later, on December 22, 2010, the Secretary of

the Interior issued an eight-page, single-spaced decision

denying the Tribe’s application. A review of the December

22 decision shows that it was carefully crafted and that the

preliminary determinations must have been made well before

December 14, 2010. In its penultimate section the letter

states:

Whether we consider the Tribe’s first request

for newly acquired lands to be the trust-to-

trust transfers or the subsequent fee-to-trust

22 REDDING RANCHERIA V. JEWELL

requests, it is evident that the subject Parcels

were not included in either of these requests.

Therefore, the Parcels were not “included in

the [T]ribe’s first request for newly acquired

lands since the [T]ribe was restored to Federal

recognition” and they cannot meet the

standard in 25 C. F. R. § 292.12(c)(I).

To meet the alternate standard under 25 C. F.

R. § 292.12(c)(2), a tribe must demonstrate

that it submitted the land into trust application

within 25 years after the tribe was restored to

Federal recognition and the tribe is not

gaming on other lands.

In this case, the Tribe’s existing gaming

facility precludes a finding under this section.

Even if the Tribe’s letter could be viewed as a plea for the

creation of an exception to the requirement that “the tribe is

not gaming on other land,” which is contrary to its natural

meaning, see infra, the December 14 letter contained no

explanation or justification for such a request. Accordingly,

as the Tribe’s alleged offer to move its casino did not appear

to be relevant to the Secretary’s decision, the Secretary did

not, and should not be required or expected to, address the

offer in any detail. Rather, the Secretary succinctly explained

that he denied the Tribe’s application because of its “existing

gaming facility.” The offer to move the casino did not

change the fact that the Tribe had an existing casino when it

submitted its application.

The conclusion that the December 14 letter did not clearly

present to the Secretary an alternate proposal of moving the

REDDING RANCHERIA V. JEWELL 23

existing casino is supported by the lack of anything in the

record suggesting that the Tribe thought otherwise. There is

no indication that the Tribe asked the Secretary to reconsider

his decision in light of the December 14 letter. Indeed, the

Tribe’s complaint filed in the district court does not even

mention the December 14, 2010 letter. Paragraph 23 states

that the Tribe amended its request on October 29, 2010.

Paragraph 24 then states that Department denied the Tribe’s

request in the December 22, 2010 letter. There is no mention

of the November 15, 2010 meeting or Ms. Murphy’s

December 14, 2010 letter.

The existing record does not support the majority’s

statement that the Tribe presented the Secretary with an

“alternative proposal to close the first casino once the new

one was operational.” Maj. at 9. Rather, the possibility of

moving the casino appears to have been tentatively raised in

a last minute letter with no explanation of why the proposal

would be permissible under the applicable regulation. The

“alternate proposal” was not addressed in the Secretary’s

decision, and the Tribe never asked the Secretary to

reconsider his decision in light of its alleged “alternate

proposal.” We hold that the Secretary’s denial of the

application was otherwise reasonable. This decision should

not be undermined by subsequent attempts to re-characterize

what happened. Because no “alternate proposal” was fairly

presented to the Secretary, his failure to address it cannot be

described as arbitrary or capricious. Furthermore, if the

“alternate proposal” has any merit, the Tribe presumably can

raise it anew with the Department. Such a course is surely

preferable to remanding this case to the district court, to

remand it to the Secretary, to consider a claim that was not

fairly raised before the Department.

24 REDDING RANCHERIA V. JEWELL

II.

Contrary to the majority’s opinion and the Tribe’s

representations in its appellate brief, the district court’s 32-

page opinion is not based on a misperception that the Tribe

sought to operate multiple casinos. As noted, the December

14 letter was not even mentioned in the Tribe’s complaint.

Furthermore, a review of the briefs filed in the district

court reveals that the alleged “alternate proposal” was never

argued in writing to the district court. The December 14

letter is first mentioned in the Tribe’s September 30, 2011

Motion for Summary Judgment as “summarizing many of the

Tribe’s arguments supporting its position that the Property

fell within the Restored Lands Exception.”1 However, the

thrust of the motion was that “the validity of the Decision . . .

depends on the validity of the Regulations.”2

1

Paragraph 19 in the Motion for Summary Judgement reads:

On December 14, 2010, the Tribe sent a letter to Mr.

Laverdure reiterating the discussions that occurred

during the November 15, 2010 meeting, and

summarizing many of the Tribe’s arguments support its

position that the Property fell with the Restored Lands

Exception.

2

The motion stated:

The Assistant Secretary’s Decision that the Tribe’s

request must be denied was based on the conclusion

that the Property did not meet the requirements of the

Regulations, in particular 25 C. F. R. §§ 292.2 and

292.7–292.12. The validity of the Decision, therefore

depends on the validity of the Regulations.

REDDING RANCHERIA V. JEWELL 25

The motion does contain a section alleging that “the

Assistant Secretary’s Decision violates the APA because he

refused to consider important information and arguments

submitted by the tribe.” This section does mention the

December 14, 2010 letter, but only as supporting the Tribe’s

argument that “because the lands upon which the Tribe was

conducting gaming were within the original boundaries of the

Tribe’s Reservation, that gaming had no effect on the Tribe’s

request that the Property be taken into trust pursuant to the

Restored Lands Exception.” The December 14, 2010 letter

does not make an appearance in the Tribe’s reply brief.

The only language in the district court’s opinion that

arguably implies that the district court thought that the Tribe

sought to operate multiple casinos is the third sentence in the

opinion that reads: “The Tribe seeks to expand its gaming

operations by building a second casino on 230 acres of

undeveloped riverfront lands.” However, this is an accurate

statement, even if the Tribe intended to close the Win-River

Casino. The Tribe did seek to build a “second” casino.

Moreover, the Tribe did intend to expand its operations as the

proposed Strawberry Fields Casino would be much larger

than the Win-River Casino.

The district court did address the Tribe’s claim that the

Secretary “refused to consider important information, and

found that the Decision was not arbitrary or capricious.” The

district court concluded that the Secretary had “explained that

the Tribe could not satisfy the alternate criterion for

establishing a temporal connection to newly acquired lands,

which depends on a tribe conducting gaming on no other

lands, see § 292.12(c)(2), because the tribe already operated

the Win-River Casino,” and that there was “nothing arbitrary

or capricious about this application of the Regulations.” The

26 REDDING RANCHERIA V. JEWELL

district court further opined that “[t]he Tribe’s real objection

to the Decision appears to be not how Interior applied the

Regulations but rather that Interior applied them at all.”

Thus, the district court held that the Secretary reasonably

denied the Tribe’s request because the Tribe was already

gaming on other land. The district court did not consider (and

apparently was not asked to consider) whether the regulation

could, or should be, revised or interpreted to allow the

transfer of gaming from one location to another. Just as the

Secretary’s decision should not be set aside for not addressing

an argument that was not clearly raised in the administrative

proceedings, the district court should not be reversed for not

addressing an argument that the Tribe failed to advance

before it. It appears that the Tribe waived its alternate

proposal argument by failing to present it to the district court.

III

Finally, I cannot agree with the majority’s gratuitous

comments on the merits of the Tribe’s “alternate proposal” to

close its Win-River Casino and open a casino on Strawberry

Fields. The panel is in accord that (1) the regulation is

reasonable, (2) the Indian canon does not apply, and (3) there

has been no unexplained change in agency policy. These

cover the primary issues raised by the Tribe. Indeed, in its

reply brief, the Tribe reiterates that it “has consistently

challenged a very specific component of the Secretary’s

interpretation; the requirement set forth in 25 C. F. R.

§ 292.12(c)(2) that the tribe must not ‘already be gaming on

other lands.’” Our agreement with the district court on these

three issues should end this litigation, there is no need for

further comment.

REDDING RANCHERIA V. JEWELL 27

However, section IV of the majority opinion, after

incorrectly accepting as fact both that the Tribe made an

alternate proposal to the Department and that the district

court’s order contemplated that the Tribe sought to operate

multiple casinos,3 proceeds to offer questionable dicta. The

majority recognizes that the regulation contains a prohibition

against gaming on other lands, but then comments:

The regulation is not clear, however, that the

agency must also look to the date of the

application to determine whether the tribe has

satisfied the prohibition against gaming on

other lands. While the regulation could be so

interpreted, the agency has so far provided no

reason why it should. Allowing a restored

tribe to move a casino does not appear to

conflict with the statutory purpose of ensuring

parity among restored and established tribes.

Maj. at 17.

This approach is wrong on a number of fronts. First, it

takes liberty with the regulation’s language. The critical

subsection reads: “the tribe submitted an application to take

the land into trust within 25 years after the tribe was restored

to Federal recognition and the tribe is not gaming on other

lands.” Why isn’t the most natural reading of the subsection

that the Secretary must look to the date of the application in

determining whether the application was submitted within the

25 year period and whether the tribe “is not gaming on other

3

The majority states that: “The district court did not consider the Tribe’s

alternative offer and construed its application as if it necessarily

contemplated the operation of multiple casinos.”

28 REDDING RANCHERIA V. JEWELL

lands?” The subsection directs the Secretary to look at what

is happening, not what might happen in the future.

Second, this is the Secretary’s position as set forth in the

December 22, 2010 decision. The Secretary’s brief reasserts

that “the regulations are clear, and contain no provision for an

expression of future intent with an undefined time frame.”

There is no doubt that throughout the proceedings the Tribe

has operated the Win-River Casino. Thus, according to the

Secretary, whether the Tribe intended to close the Win-River

Casino if it prevailed on its application was “irrelevant.” The

Department’s interpretation of its own regulation is

controlling because it is not plainly erroneous or inconsistent

with the statute. Auer v. Robbins, 519 U.S. 452, 461 (1997)

(holding that a Secretary’s interpretation of a Department’s

regulation is controlling unless plainly erroneous or

inconsistent with the regulation). Indeed, the Tribe has not

argued, and the majority has not held, otherwise. Moreover,

this is not a situation where the Secretary has changed his

position during litigation or offered a post hoc rationalization.

See Christopher v. SmithKline Beecham Corp., 132 S. Ct.

2156, 2166–67 (2012). Rather, the Secretary has consistently

given “is not gaming on other lands” its ordinary meaning.

It is the Tribe that on appeal advances a new proposed

definition of the term.

Third, the majority’s approach places the cart before the

horse. I agree with the majority that “the Secretary

reasonably implemented the restored lands exception,” and

that under the Administrative Procedure Act, the Secretary’s

“interpretation is owed deference so long as it is reasonable.”

Maj. at 12 (citing United States v. Mead Corp., 533 U.S. 218,

229 (2001); and Chevron, U.S.A., Inc. v. Natural Res. Def.

Council, Inc., 467 U.S. 837, 845 (1984)). We have further

REDDING RANCHERIA V. JEWELL 29

held that “[u]nder the APA, we may only set aside an agency

action if it is arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law.” MacClarence v.

United States Environmental Protection Agency, 596 F.3d

1123, 1130 (9th Cir. 2010) (internal quotation marks and

citation omitted). The Tribe has the burden of showing that

the Secretary’s interpretation of the regulation is plainly

erroneous, and the Secretary had no obligation to anticipate

what the Tribe might argue on appeal. Here, the Secretary’s

interpretation is reasonable, as the majority essentially

admits. Maj. at 17. The Tribe has failed to demonstrate that

the Secretary’s reading of “is not gaming on other lands” was

arbitrary, capricious or an abuse of discretion.

Moreover, even if the Secretary’s interpretation of “not

gaming” was not the most reasonable reading of the

subsection, it is at least sufficiently reasonable to place the

burden of proving a different interpretation on the Tribe.

However, the record shows that although the Tribe informed

the Secretary of its willingness to move its casino, it never

offered any arguments to the Secretary or the district court as

to why its offer was, or should be, relevant to the

interpretation of the regulation. Even the Tribe’s passing

argument on this issue in its brief to this court is devoid of

any citation to case law or regulation.

Finally, the assertion that moving a casino “does not

appear to conflict with the statutory purpose of ensuring

parity among restored and established tribes” is dicta,

unsupported by anything in the record, and possibly contrary

to panel’s reasoning for otherwise affirming the Secretary’s

decision. The Tribe wants to build the Strawberry Fields

Casino because it would be bigger and presumably more

profitable than the Win-River Casino. But wouldn’t allowing

30 REDDING RANCHERIA V. JEWELL

restored tribes, but not established tribes, to move their

casinos to newly acquired land alter the balance between

restored and established tribes? Perhaps, if the Tribe’s lands

had never been confiscated, it might have built its casino at a

better location in the first instance, but it is not clear why the

Tribe’s particular challenges are, or should be, relevant to

the Secretary’s interpretation of the regulation. I am at a loss

to explain how the majority can otherwise affirm the

Secretary’s decision but then suggest that the Tribe’s intent

to move its casino rather than operate a second casino might

somehow change the Secretary’s interpretation of the

regulation.

IV

If the Tribe wants to ask the Secretary to reconsider the

December 22, 2010 decision on the basis that “is not gaming

on other land” may, or should be, interpreted to allow a Tribe

to move its casino from existing land to newly acquired land,

it presumably may do so. I express no opinion as to whether

the Secretary should entertain, or grant, such a request.

However, having unanimously determined that the

Secretary’s interpretation of “is not gaming on other land” is

reasonable, we should not comment on the Tribe’s belated

offer to move its casino. This is so because the Tribe did not

fairly present its argument to the Secretary or to the district

court. Furthermore, the majority’s dicta is contrary to the

Secretary’s reasonable interpretation of the regulation, which

is entitled to deference, and the dicta is unsupported by facts

or legal argument. Accordingly, the majority’s misguided

championing of the Tribe’s offer to move the casino

misconceives the judiciary’s review function under the

Administrative Procedure Act, and is unlikely to produce any

actual benefit for the Tribe. Because we should limit our

REDDING RANCHERIA V. JEWELL 31

opinion to our determination that the Secretary otherwise

reasonably interpreted the regulation and denied the Tribe’s

application, I dissent from part IV of the opinion.