Chemehuevi Indian Tribe v. Gavin Newsom

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CHEMEHUEVI INDIAN TRIBE; CHICKEN No. 17-55604

RANCH RANCHERIA OF ME-WUK

INDIANS, D.C. No.

Plaintiffs-Appellants, 5:16-cv-01347-

JFW-MRW

v.

GAVIN NEWSOM, Governor of OPINION

California; STATE OF CALIFORNIA,

Defendants-Appellees.

Appeal from the United States District Court

for the Central District of California

John F. Walter, District Judge, Presiding

Submitted October 9, 2018 *

Pasadena, California

Filed March 21, 2019

*

The panel unanimously concludes this case is suitable for decision

without oral argument. See Fed. R. App. P. 34(a)(2).

2 CHEMEHUEVI INDIAN TRIBE V. NEWSOM

Before: Sandra S. Ikuta and John B. Owens, Circuit

Judges, and Haywood S. Gilliam, Jr., ** District Judge.

Opinion by Judge Gilliam

SUMMARY ***

Indian Gaming Regulatory Act

The panel affirmed the district court’s order granting

summary judgment to the State of California in an action

brought by Indian tribes under the Indian Gaming

Regulatory Act.

The panel held that IGRA permits tribes and states to

negotiate the duration of a compact governing the conduct

of a tribe’s class III gaming activities. Accordingly, a

termination provision in a compact was not void under

IGRA.

**

The Honorable Haywood S. Gilliam, Jr., United States District

Judge for the Northern District of California, sitting by designation.

***

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

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

CHEMEHUEVI INDIAN TRIBE V. NEWSOM 3

COUNSEL

Lester J. Marston, Rapport and Marston, Ukiah, California,

for Plaintiffs-Appellant.

Xavier Becerra, Attorney General of California; Sara J.

Drake, Senior Assistant Attorney General; T. Michelle Laird

and James G. Waian, Deputy Attorneys General; Office of

the Attorney General, San Diego, California; for

Defendants-Appellees.

OPINION

GILLIAM, District Judge:

This case presents an issue of first impression: Does the

Indian Gaming Regulatory Act (“IGRA”), 25 U.S.C.

§§ 2701–2721, permit tribes and states to negotiate the

duration of a compact governing the conduct of a tribe’s

class III gaming activities? Because we conclude that

IGRA’s plain language permits durational provisions in

compacts, we affirm the district court’s order granting

summary judgment to the State of California.

I

Congress passed IGRA to establish a framework for

regulating gaming on Indian lands. See 25 U.S.C. § 2702.

Under that framework, IGRA creates three classes of

gaming. In re Indian Gaming Related Cases, 331 F.3d 1094,

1096–97 (9th Cir. 2003) (Coyote Valley II). Class III

gaming, the kind at issue here, “includes the types of high-

stakes games usually associated with Nevada-style

gambling,” and “is subject to a greater degree of federal-state

4 CHEMEHUEVI INDIAN TRIBE V. NEWSOM

regulation than either class I or class II gaming.” Coyote

Valley II, 331 F.3d at 1097; see also 25 U.S.C. § 2703(8)

(defining “class III gaming”). In general, class III gaming

may occur on Indian lands only if the activity is

(1) authorized by an ordinance or resolution “adopted by the

governing body of the Indian tribe having jurisdiction over

such lands” and “approved by the Chairman” of the

National Indian Gaming Commission (“the Chairperson”);

(2) “located in a State that permits such gaming for any

purpose by any person, organization, or entity”; and

(3) “conducted in conformance with a Tribal-State compact

entered into by the Indian tribe and the State . . . that is in

effect.” 25 U.S.C. § 2710(d)(1). 1

The Chicken Ranch Rancheria of Me-Wuk Indians and

the Chemehuevi Indian Tribe are federally recognized

Indian tribes in California. California permits certain forms

of class III gaming under an effective tribal-state gaming

compact. The Tribes each have enacted gaming ordinances

that were approved by the Chairperson. Each of the Tribes

executed a compact with the State in 1999, and the Assistant

Secretary of Indian Affairs approved each compact. 2 On

May 16, 2000, notice of that approval was published in the

1

Class III gaming is permitted without an agreed-upon compact

only if a district court finds that the state has not negotiated in good faith,

the state rejects a court-appointed mediator’s selection of the tribe’s

proposed compact, and the Secretary prescribes procedures under which

class III gaming may be conducted. See 25 U.S.C. § 2710(d)(7)(B). The

Tribes do not allege that the State negotiated in bad faith.

2

Because the compacts signed by Chicken Ranch and Chemehuevi

are substantively identical, we refer to the Tribes’ compacts collectively

as “the Compact” or “the 1999 Compact.”

CHEMEHUEVI INDIAN TRIBE V. NEWSOM 5

Federal Register. Under the Compact, the Tribes operate

casinos on “Indian lands,” as that term is defined in IGRA.

The 1999 Compact contains a termination provision

(“the Termination Provision”) that sets December 31, 2020

as the Compact’s end date. The Termination Provision

automatically extends the end date to June 30, 2022 if the

parties have not agreed to amend the Compact or entered into

a new compact before December 31, 2020.

The Compact separately includes (1) provisions for

renegotiation and amendment; (2) meet and confer

requirements before a party may seek arbitration or file suit;

and (3) a limited waiver of the State’s sovereign immunity

for issues “arising under” the Compact. It is undisputed that

the parties have fulfilled the Compact’s meet and confer

requirements.

On April 20, 2016, the Tribes sent a letter asking the

State to concede that the Termination Provision is void under

IGRA, and that the Tribes have no obligation to negotiate a

renewal of the Compact. The State disagreed and declined

the Tribes’ request. The Tribes then filed suit in the Central

District of California. After the filing of cross-motions for

summary judgment, the district court granted the State’s

motion and denied the Tribes’ motion. The district court

issued a final judgment, and this appeal followed.

II

We review the district court’s grant of summary

judgment de novo and may affirm on any ground supported

by the record. California v. Iipay Nation of Santa Ysabel,

898 F.3d 960, 964 (9th Cir. 2018) (citing Phoenix Mem’l

Hosp. v. Sebelius, 622 F.3d 1219, 1224 (9th Cir. 2010)).

6 CHEMEHUEVI INDIAN TRIBE V. NEWSOM

Statutory interpretation presents a question of law, which we

also review de novo. Id.

III

This case presents an issue of first impression regarding

the validity of durational limits on compacts under IGRA.

The Tribes contend that IGRA’s plain language precludes

durational limits. The State agrees that IGRA’s plain

language is determinative, but disagrees that the statutory

language supports the Tribes’ position.

Section 2710(d)(3)(C) of IGRA sets out the range of

subjects addressable in tribal-state compacts. In full, that

section states:

Any Tribal-State compact negotiated under

subparagraph (A) may include provisions

relating to—

(i) the application of the criminal and civil

laws and regulations of the Indian tribe or the

State that are directly related to, and

necessary for, the licensing and regulation of

such activity;

(ii) the allocation of criminal and civil

jurisdiction between the State and the Indian

tribe necessary for the enforcement of such

laws and regulations;

(iii) the assessment by the State of such

activities in such amounts as are necessary to

defray the costs of regulating such activity;

CHEMEHUEVI INDIAN TRIBE V. NEWSOM 7

(iv) taxation by the Indian tribe of such

activity in amounts comparable to amounts

assessed by the State for comparable

activities;

(v) remedies for breach of contract;

(vi) standards for the operation of such

activity and maintenance of the gaming

facility, including licensing; and

(vii) any other subjects that are directly

related to the operation of gaming activities.

25 U.S.C. § 2710(d)(3)(C).

The parties’ dispute turns on the meaning of this section.

The Tribes contend that once they have satisfied the three

minimum statutory requirements in 25 U.S.C. § 2710(d)(1),

the statute confers an “absolute right” to engage in class III

gaming, so as to preclude durational limits. The State

counters that the plain language of subsections (d)(3)(C)(vi)

and (d)(3)(C)(vii) establishes catch-all categories, and that

those categories broadly authorize the inclusion of

durational provisions in compacts.

In interpreting IGRA, we apply “traditional tools of

statutory construction.” Rumsey Indian Rancheria of

Wintun Indians v. Wilson, 64 F.3d 1250, 1257 (9th Cir.

1994), amended on denial of reh’g by 99 F.3d 321 (9th Cir.

1996). We begin with the statute’s language, which is

conclusive unless literally applying the statute’s text

demonstrably contradicts Congress’s intent. See id. (first

citing Mallard v. U.S. Dist. Court for the So. Dist. of

Iowa, 490 U.S. 296, 301 (1989); and then citing United

States v. Ron Pair Enters., Inc., 489 U.S. 235, 242 (1989)).

8 CHEMEHUEVI INDIAN TRIBE V. NEWSOM

“When deciding whether the language is plain, courts must

read the words in their context and with a view to their place

in the overall statutory scheme.” Rainero v. Archon Corp.,

844 F.3d 832, 837 (9th Cir. 2016) (quotations and alterations

omitted). “In most cases, ‘if we find the statutory language

unambiguous, then we will not resort to legislative history’

to guide our review.” Rumsey Indian Rancheria, 64 F.3d at

1257 (quoting Fernandez v. Brock, 840 F.2d 622, 632 (9th

Cir. 1988)).

Applying traditional tools of statutory construction, we

find that IGRA’s plain language unambiguously permits

parties to include durational limits in compacts. The phrases

“standards for the operation of [gaming] activity” and “any

other subjects . . . directly related to the operation of gaming

activities” are naturally read as catch-all categories. Viewed

in context, those terms are broader than the more specific

topics enumerated in paragraphs (3)(C)(i)–(v). And once

paragraphs (3)(C)(vi)–(vii) are properly framed as catch-all

categories, the inquiry is whether a durational limit is either

a “standard[] for the operation of [gaming] activity” or a

term “directly related to the operation of gaming activities.”

We conclude that, at a minimum, a durational limit is

“directly related to the operation of gaming activities.” See

25 U.S.C. § 2710(d)(3)(C)(vii).

To start, IGRA’s structure dictates this interpretation.

Construing paragraph (3)(C)(vii)’s catch-all provision as

permitting durational limits in compacts plainly coheres with

IGRA’s threshold requirement that a compact be “in effect”

for class III gaming activity to lawfully occur. See id.

§ 2710(d)(1)(C). Congress’s inclusion of that language

indicates that it contemplated that a party could properly

raise a compact’s “effective” date during negotiations. And

as a matter of common sense, given that a tribe may not

CHEMEHUEVI INDIAN TRIBE V. NEWSOM 9

conduct gaming activities without an effective compact, a

durational limit on the effectiveness of a compact is “directly

related to the operation of gaming activities.” See id.

§ 2710(d)(3)(C)(vii).

Subsection (d)(1)(C)’s effectiveness requirement also

undercuts the Tribes’ position that IGRA gives tribes an

indefinite right to administer class III gaming. Rather, that

regulatory right is qualified by the existence of a valid tribal-

state compact. See id. Numerous other sections in IGRA

support this view. See, e.g., id. § 2710(d)(2)(C) (“[C]lass III

gaming activity on the Indian lands of the Indian tribe shall

be fully subject to the terms and conditions of the Tribal-

State compact entered into under paragraph (3) by the Indian

tribe that is in effect.”); id. § 2710(d)(5) (“Nothing in this

subsection shall impair the right of an Indian tribe to regulate

class III gaming on its Indian lands concurrently with the

State, except to the extent that such regulation is inconsistent

with, or less stringent than, the State laws and regulations

made applicable by any Tribal-State compact entered into by

the Indian tribe under paragraph (3) that is in effect.”)

(emphasis added). As it relates to the subjects deemed

permissible for negotiation under Section 2710(d)(3)(C),

then, the Termination Provision is “directly related to the

operation of gaming activity” under paragraph (3)(C)(vii)’s

catch-all provision.

We further reject as inconsistent with a plain reading of

IGRA the Tribes’ argument that the statute’s silence

regarding duration entirely prohibits a party from raising the

subject during negotiations. The Tribes’ alternative,

presumably, is that all tribal-state compacts must run

indefinitely. See Compl. for Declaratory & Injunctive Relief

at 14–15, Chemehuevi Indian Tribe v. Brown, No. 5:16-cv-

01347-JFW-MRW (C.D. Cal. Mar. 30, 2017) (prayer for

10 CHEMEHUEVI INDIAN TRIBE V. NEWSOM

relief requesting declaration that the Termination Provision

is void and unenforceable, and seeking order that the

provision “is severed from the 1999 Compacts and that the

remaining provisions of the 1999 Compacts are in full

force”); see also Cohen’s Handbook of Federal Indian Law

§ 12.05 (2017) (“Tribal compacts often contain terms

regarding duration. Where no such terms exist, the compact

is presumed to run indefinitely and neither party may

unilaterally terminate a compact.”). Nothing in the statute

suggests that Congress intended that result, and we avoid

reading in unstated statutory requirements. See Ariz. State

Bd. for Charter Sch. v. U.S. Dep’t of Educ., 464 F.3d 1003,

1007 (9th Cir. 2006) (“In conducting [a plain meaning]

analysis, we are not vested with the power to rewrite the

statutes, but rather must construe what Congress has

written. . . . It is for us to ascertain—neither to add nor to

subtract, neither to delete nor to distort.”) (quotations

omitted). Moreover, demanding that only expressly

enumerated subjects are addressable in compacts would

render the catch-all language meaningless. We must instead

“favor an interpretation that gives meaning to each statutory

provision.” See Life Techs. Corp. v. Promega Corp., 137 S.

Ct. 734, 740 (2017).

We are unpersuaded by the Tribes’ argument that the

Supreme Court’s decision in Michigan v. Bay Mills Indian

Community, 572 U.S. 782 (2004), supports their position. In

Bay Mills, the Supreme Court construed “class III gaming

activity” to mean “just what it sounds like—the stuff

involved in playing class III games.” 572 U.S. at 792. Citing

several IGRA provisions, including Section

2710(d)(3)(C)(i), the Court explained:

Those phrases make perfect sense if “class III

gaming activity” is what goes on in a

CHEMEHUEVI INDIAN TRIBE V. NEWSOM 11

casino—each roll of the dice and spin of the

wheel. But they lose all meaning if, as

Michigan argues, “class III gaming activity”

refers equally to the off-site licensing or

operation of the games. (Just plug in those

words and see what happens.)

Id. In the Tribes’ view, this passage supports their position

that durational limits are impermissible subjects for

negotiation, because they are not “directly related” to dice-

rolling and wheel-spinning.

But the Supreme Court’s interpretation of “gaming

activity” in Bay Mills does not conflict with our holding that

a compact’s durational term is “directly related to the

operation of gaming activities” within the meaning of

paragraph (3)(C)(vii). First, the proper inquiry here is

whether a compact’s end date is so attenuated from

gameplay that it falls outside of paragraph (3)(C)(vii), an

issue the Bay Mills Court did not address. See id. at 785

(“The question in this case is whether tribal sovereign

immunity bars Michigan’s suit against the Bay Mills Indian

Community for opening a casino outside Indian lands.”).

Second, if anything, Bay Mills suggested a broad view of

negotiable subjects when it noted that states and tribes “need

only bargain” for a term or condition, which in that case was

a waiver of tribal sovereign immunity. See id. at 796–97

(“[I]f a State really wants to sue a tribe for gaming outside

Indian lands, the State need only bargain for a waiver of

immunity.”). The Court added that “[s]tates have more than

enough leverage to obtain such terms because a tribe cannot

conduct class III gaming on its lands without a compact.” Id.

Accordingly, we reject the Tribes’ argument that Bay Mills

compels the conclusion that a durational limit is not “directly

12 CHEMEHUEVI INDIAN TRIBE V. NEWSOM

related to the operation of gaming activities” within the

meaning of paragraph (3)(C)(vii).

Our prior examinations of Section 2710(d)(3)(C) also

support today’s holding. In Coyote Valley II, for example,

we considered the permissibility under IGRA of three

compact provisions: “(1) the Revenue Sharing Trust Fund

provision [RSTF]; (2) the Special Distribution Fund

provision [SDF]; and (3) the Labor Relations provision.”

331 F.3d at 1105. These provisions required compacting

tribes to share gaming revenue with non-gaming tribes and

the State, and to address the labor rights of gaming facility

employees. See id. at 1104–07. The plaintiff tribe

challenged these provisions as “outside the list of

appropriate topics for Tribal–State compacts set forth in 25

U.S.C. § 2710(d)(3)(C),” which the tribe argued raised a

presumption that the State negotiated in bad faith. Id. at

1109. We disagreed and held that IGRA did not

“categorically forbid[]” the negotiated provisions. Id. at

1110. We also declined to find that the “State’s insistence

on their inclusion . . . demonstrat[ed] a lack of good faith.”

Id.

As to the RSTF in particular, which required gaming

tribes to distribute revenue to non-gaming tribes, we held:

It is clear that the RSTF provision falls within

the scope of paragraph (3)(C)(vii). Congress

sought through IGRA to “promot[e] tribal

economic development, self-sufficiency, and

strong tribal governments.” Id. § 2702(1).

The RSTF provision advances this

Congressional goal by creating a mechanism

whereby all of California’s tribes—not just

those fortunate enough to have land located

CHEMEHUEVI INDIAN TRIBE V. NEWSOM 13

in populous or accessible areas—can benefit

from class III gaming activities in the State.

Id. at 1111. We found that paragraph (3)(C)(vii) was “not

ambiguous,” that the RSTF “clearly” fell within its scope,

and that there was no ambiguity to construe in the tribe’s

favor. Id. Citing the same reasons, we upheld the SDF’s

requirement that gaming tribes share revenue with the State.

See id. at 1114. We further held that the Labor Relations

provision was “directly related to the operation of gaming

activities” and thus permissible under paragraph (3)(C)(vii):

“Without the ‘operation of gaming activities,’ the jobs this

provision covers would not exist; nor, conversely, could

Indian gaming activities operate without someone

performing these jobs.” Id. at 1115–16. This reading of

paragraph (3)(C)(vii) as unambiguous and allowing for

negotiation regarding unenumerated topics supports our

holding here: a duration provision is at least as closely

related to the operation of gaming activities as the topics we

found to be permissible subjects for negotiation in Coyote

Valley II.

In summary, the State is correct that IGRA’s plain

language permits durational limits on compacts under the

catch-all provision of 25 U.S.C. § 2710(d)(3)(C)(vii).

Because the durational limits in the Tribes’ compacts are

valid, we AFFIRM the district court’s order granting

summary judgment to the State of California.