Reply Brief — Michigan Gambling Opposition v. Kempthorne (No. 08-554)

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5) (2) | FILED

No. 08-554 DEC 2'6 2008

OFFICE OF THE CLERK

jn The

Supreme Court of the Gnited States

MICHIGAN GAMBLING OPPOSITION (“MICHGO”),

Petitioner,

Vv.

DIRK KEMPTHORNE, in his official capacity

as Secretary of the United States

Department of the Interior, et al.,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The District Of Columbia Circuit

REPLY BRIEF FOR PETITIONER

REBECCA A. WOMELDORF JOHN J. BURSCH*

SPRIGGS & HOLLINGSWORTH DANIEL P. ETTINGER

1350 I Street, N.W., Suite 900 JOSEPH A. KUIPER

Washington, D.C. 20005 WARNER NORCROSS &

(202) 898-5800 JUDD LLP

900 Fifth Third Center

111 Lyon Street, N.W.

Grand Rapids, MI 49503

(616) 752-2000

Counsel for Petitioner

DECEMBER 26, 2008 *Counsel of Record

COCKLE LAW BRIEF PRINTING CO (S800; 225-6964

OR CALL COLLECT / 402) 342-2831

[T.

TABLE OF CONTENTS

TABLE OF AUTHORITIES. ...... sn sveseniinaoaieneanee

REPLY BRIEF FOR PETITIONERSG...................

This Court should grant the petition to

decide an important constitutional issue

of immense significance to state sover-

eignty, separation of power principles,

and the delicate balance between state

and Indian jurisdiction..........................002-

At a minimum, this Court should hold

the petition until the Court issues its

opinion in Carcieri and, if Carcieri is re-

versed, GVR the present case for further

consideration in light of Carcieri ..............

CONCLUSION oo cccaissenssccsicesensnetienaenieeee

TABLE OF AUTHORITIES

Page

CASES

American Power & Light Co. v. SEC, 329 U.S.

IT ck xertsivssicusnusnnescnsnbeiiepidsnks temmemarnlainealeaeda ane 5

Clarke v. Sec. Indus. Ass’n, 479 U.S. 388 (1987).....7, 8

Finburg v. Sullivan, 658 F.2d 93 (3d Cir. 1980).......... 3

Florida Dep’t Bus. Regulation v. United States

Dep't of Interior, 768 F.2d 1248 (11th Cir.

I iiiahnceseanircs-copowsaceonesesvcsencimeiciel casa aeerqemeay aoe na ea 4

Grand Traverse Band of Ottawa & Chippewa

Indians v. Office of the U.S. Attorney for the

W. District of Mich., 369 F.3d 960 (6th Cir.

I ils Dav ccuvaccexssdonntans outederendeckeressertieeoelamnee 10

Harper v. Virginia Dep't of Taxation, 509 U.S.

I vesscacisios-ossGscesvaeseanmontaesusaoncaeaaaaa tae 12

Hormel v. Helvering, 312 U.S. 552 (1941) ......... 11

Intermountain Rate Cases [United States uv.

Atchison, Topeka, & Santa Fe Ratlway/, 234

SE ME A IE Fins: veconivonsenevcecutendevasaurd poenwceenanaiacenanee §

Nat'l Credit Union Admin. v. First Nat'l

punk & Trust Co., 522 US. 479 (1996) .......-.00cceeseses 7

South Dakota v. United States Dep’t of the

Interior, 69 F.3d 878 (8th Cir. 1995), vacated

and remanded, 519 U.S. 919 (1996)................. 3,5,6

Standard Indus., Inc. v. Tigrett Indus., Inc.,

ST EM, CE BPO) ocesissiccncnvcsceinsnseatensevesvusvnserecouiens 12

Whitman v. American Trucking Assocs., Inc.,

SE Re: WF CODE) nc ccnincsnnsnvnnscevecsnescennasinedibanenen 1,5

TABLE OF AUTHORITIES — Continued

Page

DOCKETED CASES

Carcieri v. Kempthorne, No. 07-526

United States v. Roberts, No. 99-991174

STATUTES

28 U.S.C. § 2409a

25 C.F.R. § &3.3(e)

25 C.F-R. §§ 151.10-12

MISCELLANEOUS

Oe, See Be Bt lees erueanineaane 9,10

62 Fed. Reg. 38,114

REPLY BRIEF FOR PETITIONERS

The United States does not deny the importance

of the constitutional question this case presents, nor

could it. That is because the future allocation of juris-

diction between states and tribes over a potentially

unlimited amount of state lands hangs in the balance,

with the outcome turning on the continued viability

of the nondelegation doctrine. “The importance of

[whether Section 5 violates the nondelegation doctrine]

is beyond cavil.” Petition for Writ of Certiorari, United

States v. Roberts, No. 99-991174, at 28 (Jan. 12, 2000).

In Whitman v. American Trucking Associates,

Inc., 531 U.S. 457 (2001), this Court instructed that

where Congress confers a power that has broad scope

— such as the power to take state land and give it toa

co-sovereign — the statute must provide “substantial

guidance” to the agency. As the Eighth and Eleventh

Circuits have held and as Judge Brown reiterated

below, Section 5 of the IRA provides absolutely no

guidance. Yet this Court’s directive in Whitman has

been ignored by the D.C. Circuit majority and the

other Circuits that have upheld Section 5 over non-

delegation challenges. Indeed, the one thing the

government does not say in its opposition brief is that

there is ample guidance in Section 5’s text, such that

a court reviewing a land-in-trust decision can say

whether that decision is in accord with Congressional

will. The time is ripe for this Court to address the

important issue of Section 5’s constitutionality, as no

less than 24 states have requested.

Neither the United States nor the Tribe disputes

the importance of the Carcieri question, either.

Instead, the government simply questions the date

when the Tribe’s federal recognition ceased. At a

minimum, then, this Court should hold the petition

until the Court issues its decision in Carcieri, and, if

Carcieri is reversed, GVR the present case for further

consideration in light of Carcieri. Alternatively,

because the administrative record and statutory

language are clear, the Court should enter judgment

in MichGO’s favor.

This Court should grant the petition to

decide an important constitutional issue of

immense significance to state sovereignty,

separation of power principles, and the

delicate balance between state and Indian

jurisdiction.

The United States attempts to identify reasons

why this case does not merit review. That exercise is

unavailing.

a. The government points to this Court’s denial

of certiorari in other cases raising the question of

Section 5’s constitutionality, including Carcieri v.

Kempthorne, No. 07-526. Opp. at 5. But the comments

of several Justices at the Carcieri oral argument

demonstrate the important issues of state sovereignty

and unlimited executive discretion that permeate the

constitutional question presented and require this

Court’s intervention. See, e.g., 11/3/08 Tr. at 36 (“LW]e

are talking about an extraordinary assertion of

power. The Secretary gets to take land and give it a

whole different jurisdictional status apart from State

law ... ”) (Roberts, C.J.); id. at 38 (“[Is there not]

some principle of Federalism which makes us be very

cautious before we take land out of the jurisdiction of

the State[?]”) (Kennedy, J.); id. at 29 (“Very strange

statute, just leaving it up to [the Secretary] to do

whatever he wants.”) (Scalia, J.). But see Tribe Opp.

at 11 & n.6 (arguing that the Secretary’s unbridled

authority to take land from states and give it to a co-

sovereign is “limited” and “pales in comparison to

general appropriations”). Indeed, it is the circuit

courts’ persistent refusal to take a Section 5 nondele-

gation challenge seriously that warrants this Court’s

immediate intervention.

b. The government does not dispute that the

Eighth Circuit’s decision in South Dakota v. United

States Department of the Interior, 69 F.3d 878 (8th

Cir. 1995) (“South Dakota I”), is directly at odds with

the decision below. Opp. at 6. Instead, the govern-

ment simply points out — as the petition made clear —

that this Court vacated that decision. See 519 U.S.

919 (1996). But it remains true that the Eighth

Circuit’s reasoning in South Dakota I has never been

contradicted; is in direct conflict with the several

circuits that have upheld Section 5’s constitutionality;

and caused Justices Scalia, Thomas, and O’Connor to

dissent from the remand order and urge this Court to

resolve the constitutional question. 519 U.S. at 920-23

' “Even if a decision is vacated, . . . the force of its reasoning

remains, and the opinion of the Court may influence resolution

of future disputes.” Finburg v. Sullivan, 658 F.2d 93, 100 n.14

(3d Cir. 1980).

(Scalia, J., dissenting). Moreover, the Eighth Circuit’s

view of the statute is consistent with the Eleventh

Circuit’s, which has similarly concluded that Section

5 “does not delineate the circumstances under which

exercise of [the Secretary’s] discretion is appropriate.”

Florida Dep‘ of Bus. Regulation v. United States Dep't

of Interior, 768 F.2d 1248, 1256 (llth Cir. 1985).

Further percolation in the lower courts will not be

beneficial until this Court reaffirms the nondelega-

tion doctrine’s continuing vitality.

c. The passage of 70 years since Section 5’s

enactment is no reason to deny review. Contra Opp.

at 6-7. The Quiet Title Act, 28 U.S.C. § 2409a, likely

bars litigants from challenging land-in-trust decisions

that have already become final. And the possibility

that the government is unconstitutionally taking land

from states and giving it to co-sovereigns is the very

reason review is warranted now. Carcieri v. Kemp-

thorne, No. 07-526, 11/3/08 Tr. at 36 (“[Wle are talk-

ing about an extraordinary assertion of power. The

Secretary gets to take land and give it a whole differ-

ent jurisdictional status apart from State law ...”)

(Roberts, C.J.).

d. In their attempt to divine an intelligible

principle from Section. 5, the government points to

everything but the text of the statute (including court

decisions that discuss the supposed purposes of IRA

without reference to the text). For example, it is not

helpful for the government to point to the Secretary's

own regulations as providing the necessary limit on

his unbridled discretion under Section 5. Opp. at 8 n.4.

This Court has already held that an agency cannot

cure a standardless delegation of power by promul-

gating limiting regulations. Whitman, 531 U.S. at

473. Indeed, the government’s reliance on regulations

as the limit that renders Section 5 constitutional is

strong evidence that the statutory text has no such

limit.

e. Likewise, purported limiting principles in

Section 5’s purpose and factual background are of no

relevance in the absence of some limiting principle in

the statutory text. App. 3la (Brown, J., dissenting)

(discussing this Court’s decisions in the Jntermoun-

tain Rate Cases [United States v. Atchison, Topeka, &

Santa Fe Ry.|, 234 U.S. 476, 486-88 (1914), and

American Power & Light Co. v. SEC, 329 U.S. 90, 105

(1946)); Whitman, 531 U.S. at 472 (Congress must

articulate an intelligible principle “by legislative

act”); contra Opp. at 9. Equally important, the gov-

ernment’s conjecture as to the statutory purpose — “to

promote Indian self-government and economic self-

sufficiency,” Opp. at 9-11, is not at all apparent from

these vague sources, as was made clear at the Carci-

ert oral argument, in Judge Brown’s dissent below,

and in the Eighth Circuit’s decision in South Dakota

I. See 11/3/08 Tr. at 39 (Roberts, C.J.) (suggesting that

Section 5 is a “backward-looking” statute intended to

compensate Tribes unintentionally harmed by the

government's allotment policy); accord App. 28a

(Brown, J., dissenting) (suggesting that Section 5’s

purpose may have been, among other things, to

consolidate checkerboarded reservations); South

Dakota I, 69 F.3d at 883 (suggesting that Section 5’s

purpose was to provide homestead or agrarian land

for landless Indians).’

f. Most important, then, is what the govern-

ment does not say — namely, that there is ample

guidance in Section 5’s text, such that a court review-

ing a land-in-trust decision can say whether that

decision is in accord with Congressional will. Quite

the opposite, Section 5 expressly vests the Secretary

with unbridled “discretion” to take lands, limited only

by the identity of the recipient: “for Indians.” The

government’s submission does not so much identify

guidance for the exercise of discretion as stand for the

proposition that the nondelegation doctrine is no

impediment to the exercise of such unbridled discre-

tion. It is that conclusion — rejected by the Eighth

Circuit in South Dakota I, Judge Brown in her

* In claiming to fall within the scope of the tribes Congress

sought to benefit when enacting Section 5, the Tribe disparages

its own letter to DOI, a letter assuring the government that the

Tribe was seeking federal acknowledgment provided that “there

would never be casinos in our Tribe.” See Tribe Opp. at 4 n.2.

That letter was wholly consistent with the Tribe’s constitution,

also submitted to DOJ, which stated that the Tribe is “the only

Indian Tribe in the State of Michigan which has decided not to

sacrifice the future of its membership to gaming interests and

the changes to traditions in the community that gaming could

bring.” D.C. Cir. J.A. at 1863. That the Tribe could make such

statements during the federal acknowledgment process, then

immediately succeed in procuring the Secretary’s approval to

take land in trust for a casine, only serves to highlight the lack

of principles limiting the Secretary’s exercise of his discretion

under Section 5.

dissent below, and at least 24 states — that this Court

should review.

II. At a minimum, this Court should hold the

petition until the Court issues its opinion

in Carcieri and, if Carcieri is reversed,

GVR the present case for further consid-

eration in light of Carcieri.

Respondents also make several arguments to

avoid the application of this Court’s anticipated

ruling in Carcieri v. Kempthorne, No. 07-526, and any

change in the law resulting from that decision. Those

arguments are equally unavailing.

a. The Tribe — but not the government — argues

in a footnote that MichGO lacks standing to raise the

Carcieri issue because MichGO’s members are not

within the “zone of interests” the IRA protects. Tribe

Opp. at 13 n.8. But the prudentia! standing test is not

demanding; it requires plaintiffs to demonstrate only

that their interests are “arguably within the zone of

interests” protected by the statute forming the basis

of their claims. Nat’l Credit Union Admin. v. First

Natl Bank & Trust Co., 522 U.S. 479, 492 (1998):

Clarke v. Sec. Indus. Ass’n, 479 U.S. 388, 399-400

(1987). To satisfy prudential standing, the plaintiff

need not show that, “in enacting the statutory provi-

sion at issue, Congress specifically intended to benefit

the plaintiff.” Natl Credit Union, 522 U.S. at 492.

“The essential inquiry is whether Congress ‘intended

for a particular class of plaintiffs to be relied upon to

challenge agency disregard of the law.’” Clarke, 479

U.S. at 399 (citation omitted, emphasis added).

MichGO easily satisfies prudential standing.

MichGO’s members are the individuals and busi-

nesses that will be most affected by the casino’s

impacts. D.C. Cir. J.A. at 21, 465, 1202, 1207-08.

Thus, MichGO’s members represent the very class of

plaintiffs that Congress would have intended and

expected to challenge the Secretary’s “disregard of the

law.” Clarke, 479 U.S. at 399. Indeed, IRA regulations

require the Secretary to consider the impact that a

land-in-trust action will have on the surrounding

community and to provide an opportunity for com-

munity members to communicate their concerns to

the Secretary. 25 C.F.R. §§ 151.10-12. MichGO’s

members will be uniquely impacted by the govern-

ment’s erroneous land-in-trust decision (which is why

the Tribe does not contest MichGO’s constitutional

standing) and are within IRA’s zone of interests.

b. Anticipating that this Court may reverse the

First Circuit’s decision in Carcieri, the Tribe also

argues that it was federally recognized and under

federal jurisdiction in 1934. Tribe Opp. at 15. Earlier

in the litigation, however, the Tribe acknowledged that

it lost its federal recognition long before IRA’s enact-

ment. See Pet. 7, citing D.C. Cir. J.A. at 1772; see also

Appeal Br. of Def.-Appellee Match-E-Be-Nash-She-

Wish Band of Pottawatomi Indians at 42 (the Tribe

“was not federally recognized and had no reservation

when IGRA was enacted [in 1988]”).

The Tribe’s admissions in the lower courts are

consistent with the administrative record. BIA de-

termined that the Tribe’s federal acknowledgement

ceased in 1870 when the Tribe decided to discontinue

its compliance with the Treaty of 1855.” 62 Fed. Reg.

38,113 (1997) (1870 “has been used as the date of the

latest Federal acknowledgement for purposes of this

finding to enable the petitioner to proceed under the

provisions of section 83.8.”). While BIA made this

finding under the regulations governing federal

acknowledgement, Tribe Opp. at 16, there is no basis

for suggesting that BIA’s determination was incorrect

or even controversial. The Tribe never questioned this

conclusion, nor would it: the federal government’s

finding was legally required for the Tribe to obtain

federal acknowledgement in 1999, which in turn was

a necessary prerequisite for having land taken in

trust under IRA.

' The National Congress of American Indians, which

represents the Gun Lake Band, stated in an amicus brief

submitted to the First Circuit en banc in Carcieri, that it is

“false” to assume that a treaty between a tribe and the United

States tn the 1800s, such as the 1855 Treaty of Detroit, demon-

strates that a tribe was recognized in 1934. Supp. En Banc Br.

for Amici Curiae Nat'l Congress of Am. Indians, at 13 n.6 (Dec

26, 2006)

Despite all this, the Tribe now seeks to disavow

BIA’s finding — and the Tribe’s previous endorsement

of it — arguing that according to BIA, the Tribe’s

federally recognized status has never been “lawfully

terminated.” Tribe Opp. at 4, 15, citing 62 Fed. Reg.

358,113-38,114. But all BIA stated was that it found no

evidence that the Tribe was ever terminated by

legislation, 62 Fed. Reg. 38,114, a determination

necessary for BIA to federally acknowledge the Tribe

under 25 C.F.R. § 83.3(e). The proper question is

whether there was an effective termination by any

other means, including administrative action. Grand

Traverse Band of Ottawa & Chippewa Indians uv.

Office of the U.S. Attorney for the W. Dist. of Mich.,

369 F.3d 960, 968 (6th Cir. 2004) (asking whether

“the executive branch of the government illegally

acted as if the [tribe’s] recognition had been termi-

nated, as evidenced by its refusal to carry out any

trust obligations for over one hundred years”).

Here, both Respondents have admitted that the

Tribe’s federal recognition was terminated no later

than 1870. In fact, the Tribe has stated that it sought

recognition in 1934 in response to IRA’s enactment,

but that “before the Tribe could take firm action the

[BIA] ... decided to withhold recognition for lower

peninsula of Michigan Indian Tribes in the IRA

process.” D.C. Cir. J.A. at 1844. Accordingly, if this

Court holds in Carcieri that the acquisition statute

requires that a tribe be under federal jurisdiction and

federally recognized in 1934, the Tribe is ineligible for

a land-in-trust acquisition.“

c. Finally, both Respondents argue _ that

MichGO waived the Carcieri issue by failing to raise

it until after this Court granted certiorari in Carcieri.

Opp. at 12; Tribe Opp. at 14-15. Respondents say that

MichGO should have been aware of the potential

claim because Carcieri had been in litigation for five

years when MichGO filed its Complaint. But as

Respondents themselves note, see Opp. at 12; Tribe

Opp. at 15, both the district court and the First

Circuit in the Carcieri litigation rejected the statutory

argument, consistent with the other Circuits that had

addressed the question. Carcieri v. Kempthorne, No.

07-526, United States Opp. at 5 (Nov. 21, 2007) (“The

court of appeals’ decision is consistent with this

Court’s precedents and does not conflict with the

decisions of any other circuit.”). Because MichGO had

no reason to anticipate a change in the established

law, it should be allowed to raise the issue of the

Tribe’s ineligibility for a land-in-trust acquisition if

this Court reverses in Carcieri.”

* Significantly, the government in its opposition brief

never endorses the Tribe’s position. The government suggests

that, if this Court reverses Carcieri, a remand would be

necessary. Opp. at 13-14.

* The Tribe contends that the legal precedent permitting

appellate consideration of arguments following an intervening

change of law applies only to constitutional claims, Tribe

Opp. at 15, but that is incorrect. In Hormel v. Helvering, 312

U.S. 552 (1941), for example, this Court permitted appellate

(Continued on following page)

Indeed, failing to apply Carcieri here would

defeat the ends of justice, as it would result in the

government taking land in trust for a tribe that was

not recognized or under federal jurisdiction in 1934.

Even if the government is correct that a remand is

necessary to determine the Tribe’s status as of 1934

(which MichGO disputes), there is no legal basis for

refusing to apply the new rule simply because it

would require a remand. It would be incongruous and

contrary to the public interest to apply Carcieri, as

the Tribe proposes, to all pending land-in-trust deci-

sions except this one. See Standard Indus., Inc., 397

U.S. at 587-88 (setting forth three-part test for con-

sidering new arguments on appeal, including whether

an important public interest is served); Harper v.

Virginia Dep't of Taxation, 509 U.S. 86, 97 (1993)

(change in law applies to all cases still open on direct

review). It would therefore be wholly appropriate for

this Court to hold MichGO’s petition pending a deci-

sion in Carcieri, and, if Carcieri is reversed, GVR the

consideration of a purely statutory argument raised for the first

time on appeal, following an intervening decision of this Court

that changed the statute’s interpretation. The Court held that

any other decision “would defeat rather than promote the ends

of justice.” Jd. at 560 (remanding for consideration of additional

evidence); see also Standard Indus., Inc. v. Tigrett Indus., Inc.,

397 U.S. 586, 587 (1970) (Black, J., dissenting) (“the Court has

permitted consideration on appeal of statutory arguments not

presented below”).

present case for further consideration in light of

Carcieri.

CONCLUSION

The petition for a writ of certiorari should be

granted.

—

Respectfully submitted,