You want to know if any state has asserted an 11^th Amendment (sovereign immunity) defense since Seminole or challenged in court the Interior Department's authority to adopt regulations to prescribe tribal-state gaming procedures when a state asserts this defense.

SUMMARY

As far as we were able to determine, since the U. S. Supreme Court's 1996 Seminole decision, at least five states-Alabama, Florida, Kansas, Nebraska, and Washington-have asserted an 11^th Amendment defense to prevent federal courts from acting on suits brought under the Indian Gaming Regulatory Act (IGRA) to compel states to negotiate tribal-state gaming compacts. Seminole requires federal courts to dismiss tribal complaints challenging a state's refusal to negotiate a compact when the state asserts an 11^th Amendment immunity defense. In response, the Interior Department adopted regulations allowing it to prescribe procedures as a legal substitute for a negotiated compact in cases where a tribe's lawsuit was barred by the 11^th Amendment.

To date, only Florida and Alabama have taken court action. They have asked a federal district court to set aside the regulations, claiming that the department has exceeded its authority. Pursuant to court order, the parties have been meeting informally. As far as we were able to ascertain, the department proposed formulating (but not implementing) procedures governing the scope of gaming in the pending case so that the court would be presented with an actual controversy. On January 19, 2001, the department informed the parties of its preliminary determination as to the proposed scope of gaming procedures, but it withdrew them on June 29, 2001 "to afford the new Solicitor for the Department and the new Assistant Secretary-Indian Affairs the opportunity to evaluate the important issues raised in this matter. " Since that time, the case has been on hold.

The department claims authority to adopt regulations authorizing gaming procedures from (1) IGRA and (2) two additional statutes that delegate broad authority to the secretary to "manage Indian affairs and carry into effect legislation relating to such affairs. " It argues that the regulations provide the tools to fulfill congressional intent under IGRA and that although Congress likely did not foresee states' refusal to participate in IGRA's court-ordered mediation process, it plainly authorizes the secretary to permit Class III gaming if IGRA's court-supervised process fails to produce a joint compact.

The department also relies on a portion of the 11^th Circuit Seminole opinion in which the court suggested how cases barred by the 11^th Amendment may be handled. The court stated in dicta (statement not necessary to a holding) that if a state asserts an 11^th Amendment defense to a tribe's lawsuit, the tribe may notify the secretary, who may address the problem by regulation. (The Supreme Court upheld the 11th Circuit's holding that Congress lacked authority to abrogate a state's 11^th Amendment immunity, but it declined to address the lower court's opinion suggesting a secretarial remedy under IGRA. )

Twenty-six states (including Alabama, Connecticut, and Florida) have formally objected to the secretary's assumption of authority to prescribe procedures outside of IGRA's framework. They argue that because IGRA provides the complete and only legal framework for tribal gaming, the secretary cannot claim authority to prescribe procedures, and thus circumvent IGRA, based on her general regulatory power for Indian affairs. Further, the regulations (1) do administratively what the Supreme Court says Congress cannot do legislatively; (2) arrogate to the secretary legislative and judicial functions that Congress did not intend to, and perhaps cannot, delegate; and (3) remove any incentive for a tribe to negotiate.

This report summarizes (1) IGRA and the Seminole decision, (2) the Interior Department's regulatory response to Seminole and its defense of the regulations, and (3) states' objections to the regulations.

IGRA

IGRA provides a statutory framework for resolving jurisdictional, regulatory, and legal issues about gaming on federally recognized Indian reservations (25 USC §§ 2701 through 2721). Its stated purposes are to (1) promote tribal self-sufficiency, (2) establish fair and honest gambling, (3) prevent organized crime and other corruption by providing a statutory basis for regulating Indian gaming, (4) ensure that Indians are the primary beneficiaries of the gambling, and (5) establish standards for the National Indian Gaming Commission (NIGC). IGRA was passed, in part, in response to a U. S. Supreme Court decision generally precluding states from any regulation of gaming on Indian reservations (California v. Cabazon, 480 U. S 202 (1987)).

IGRA divides gaming on Indian reservations into three classes, subject to different degrees of regulation. Class I games, which are traditional ceremonial games or social games played for prizes of minimal value, are within the tribes' exclusive jurisdiction (25 USC §§ 2703(6) and 2710(a)(1)). Class II games, which include bingo, lotto, and games similar to bingo, are allowed if the state where the reservation is located permits them (25 USC § 2703(7)(A)). But, they are subject to some federal oversight and to tribal regulation (25 USC §§ 2710(b) and (c) and 2710(a)(2)). Banking card games, electronic games of chance, and slot machines are expressly prohibited as Class II games (25 USC § 2703(7)(B)).

Class III games are all forms of gaming that are not in Class I or Class II (25 USC § 2703(8)). They include slot machine, casino, lottery, and pari-mutuel wagering. Under IGRA, Class III gaming is lawful on federally recognized Indian reservations only if (1) authorized by a NIGC-approved tribal ordinance; (2) located in a state that permits such gaming for any purpose by any person, organization, or entity; and (3) conducted pursuant to a negotiated tribal-state compact.

Procedures for Negotiating Tribal-State Compacts

Under IGRA, a tribe wanting to conduct Class III gaming must ask the state to negotiate a compact (25 USC § 2710(d)(3)(A)). If the parties have not agreed on the compact's terms within 180 days of the tribe's request, the tribe may file suit in federal district court, claiming that the state has not negotiated in good faith (25 USC § 2710(D)(7)(a)(I)). If the court agrees with the tribe, it must order the state and tribe to conclude a compact

within 60 days (25 USC § 2710(d)(7)(B)(iii)). If they fail to do so, each must submit its last best offer to a court-appointed mediator, who must choose the one which best comports with IGRA and other federal laws (25 USC § 2710(d)(7)(B)(iv)).

If the state accepts the mediator's proposal, it becomes the compact (25 USC § 2710(d)(7)(B)(vi)). If the state does not accept, the secretary must prescribe procedures (1) consistent with the proposed compact the mediator selects and the provisions of IGRA and relevant state laws and (2) under which Class III gaming may be conducted on the Indian lands over which the tribe has jurisdiction (25 USC § 2710(d)(7)(B)(vii)). The procedures are a legal substitute for a negotiated tribal-state compact.

The secretary must publish notice of approved compacts (or procedures, where applicable) in the Federal Register. The compact and procedures have the force of federal law.

SEMINOLE TRIBE V. FLORIDA

In Seminole Tribe of Florida v. Florida, the Supreme Court upheld, on a five to four vote, an 11th Circuit ruling that federal courts must dismiss a tribe's IGRA lawsuit when the state asserts an 11^th Amendment immunity defense (517 U. S. 44 (1996)). The Court ruled that a tribe cannot use the federal court procedures set forth in IGRA to force a state to negotiate a gaming compact.

The decision was based on the 11^th Amendment to the U. S. Constitution, which the courts have interpreted as meaning that, in most cases, states cannot be sued in federal courts without their consent. The justices concluded that (1) the states had not consented to the lawsuits and (2) the Indian Commerce Clause of the U. S. Constitution, which Congress relied on in enacting IGRA, does not give that body the power to override state sovereign immunity.

INTERIOR DEPARTMENT'S RESPONSE TO SEMINOLE

After Seminole, several states indicated that they would assert an 11^th Amendment defense to avoid being sued to negotiate a tribal-state gaming compact. Arguing that this would "create an effective state veto over IGRA and therefore stalemate the compacting process," the Interior Department proposed, and solicited comments on, a rule that would allow the interior secretary to prescribe procedures if a tribal claim was dismissed because a state asserted its sovereign immunity (see 61 Fed.

Reg. 21394 (May 10, 1996) for the Advanced Notice of Proposed Rulemaking and 63 Fed. Reg. 3289 (Jan. 22, 1998) for the Notice of Proposed Rulemaking). The proposed rule, with some modifications, became final regulations that took effect on May 12, 1999.

REGULATIONS AUTHORIZING SECRETARIAL PROCEDURES

Under the new regulations, the secretary can promulgate rules for conducting Class III gaming when a state and an Indian tribe are unable to agree to a compact voluntarily and the state has asserted its immunity from suit brought by a tribe under IGRA (25 CFR 291. 3 et seq. ). A tribe may ask the secretary to issue the procedures after:

1. it has submitted a written request to the state to enter negotiations for a gaming compact;

2. the parties have failed to negotiate a compact 180 days after the state received the request;

3. the tribe sued the state alleging that it did not respond or did not respond in good faith to the request;

4. the state raised an 11^th Amendment defense to the tribe's action; and

5. the court dismissed the action based on the sovereign immunity assertion (25 CFR 291. 3).

When the secretary receives a proposal from a tribe requesting Class III gaming procedures, she has 15 days to notify the tribe that she received the proposal and 30 days to notify it if it meets eligibility requirements.

If the secretary determines that the tribe is eligible to request Class III gaming procedures and that its proposal is complete, she must submit it to the governor and attorney general of the state where the gaming is proposed. They have 60 days to comment on whether the (1) state agrees with the proposal; (2) proposal is consistent with state law; and (3) contemplated activities are permitted in the state for any purposes, by any person, organization, or entity. The secretary will also ask the attorney general and governor to submit an alternative proposal.

When the 60-day comment period ends, the secretary must review the tribe's proposal to determine if:

1. it addresses all legal requirements;

2. Class III gaming will be conducted on land under the tribe's jurisdiction;

3. the state permits the proposed gaming;

4. the proposal is consistent with state law, IGRA, and other applicable federal laws; and

5. the proposal is consistent with the trust obligations of the United States to the tribe (25 CFR § 291. 9).

Within 60 days after the comment period expires, the secretary must notify the tribe, governor, and attorney general that she has (1) approved the proposal, (2) identified unresolved issues and areas of disagreements or (3) made a final decision to either issue gaming procedures or deny the proposal. If she identifies unresolved issues, she must invite the parties to participate in an informal conference to resolve them, and within 30 days of the conference, send them a written summary of the conference discussions. (The regulations also contain provisions governing the process if the state presents an alternate proposal. In the interest of brevity, these are not discussed here. )

The procedures take effect when published in the Federal Register. The tribe and state may have an agreement regarding monitoring and enforcement of tribal compliance with the gaming procedures. In addition, under existing law, the NIGC will monitor and enforce tribal compliance (25 CFR 291. 12).

DEPARTMENT'S ARGUMENTS

Department Claims Statutory Authority to Prescribe Regulations

In defending its authority to prescribe procedures, the department argues that Congress has given it specific power to promulgate Class III gaming procedures under 25 USC § 2710(d)(7)(B)(vii) of IGRA (discussed below). It also claims to have further authorization under the legislature's broad delegation of authority to "manage Indian affairs and carry into effect legislation relating to such affairs" under (1) 25 USC § 2, which states that "the Commissioner of Indian Affairs shall, under the direction of the Secretary of the Interior, and agreeably to such regulations as the President may prescribe, have the management of all Indian affairs and of all matters arising out of Indian relations" and (2) 25 USC § 9, which states that the "President may prescribe such regulations as he may think fit for carrying into effect the various provisions of any act relating to Indian affairs, and for the settlement of the accounts of Indian affairs. "

The department cites several cases in which it claims courts have upheld the authority delegated in 25 USC §§ 2 and 9 and fully supported the exercise of secretarial authority to promulgate regulations governing and protecting Indian rights (Washington v. Washington State Commercial Passenger Fishing Vessel Association, 443 U. S. 658, 691 (1979); United States v. Eberhardt, 789 F. 2d 1354, 1360-61 (9^th Cir. 1986); Parravano v. Masten, 70 F. 3d 539 (9^th Cir. 1995), cert. denied_U. S. _,116 S. Ct. 2546(1996)). Tribal gaming rights, the department maintains, are rooted in federal law; thus, the two statues give the secretary authority to adopt regulations "to carry into effect these rights. "

Department Claims The Regulations Achieves Congressional Intent

The department also claims that the regulations provide "the tools necessary to fulfill congressional intent in the wake of Seminole. " It says Congress had at least three purposes in enacting IGRA: to (1) provide a statutory framework for gaming as a means to promote tribal economic development, self sufficiency, and strong tribal government; (2) provide a basis for regulating Indian gaming to ensure that it is conducted fairly and that the tribe is the primary beneficiary; and (3) afford states an opportunity to participate in the establishment and conduct of Indian gaming through compacts, but also to make federal remedies available if a compact could not be negotiated. Allowing states to raise an 11^th Amendment defense, withdrawing both judicial and administrative regulatory authority, would defeat these purposes and give the states veto power over all Class III gaming. In the department's view, Congress did not contemplate or authorize this; thus, the regulations are faithful to congressional intent.

Department Cites Court Dicta in Defense of Authority

The department also relies in part on dicta in the 11th Circuit Court of Appeals decision in Seminole Tribe of Florida v. Florida, 11 F3d 1016, 1029 (1994) aff'd on other grounds, 517 U. S. 44 (1996). That court said:

We are left with the question as to what procedure is left for an Indian tribe faced with a State that not only will not negotiate in good faith, but also will not consent to suit. The answer, gleaned from the statute, is simple. One hundred and eighty days after the Tribe first requests negotiations with the State, the Tribe may file suit in district court. If the State pleads an Eleventh Amendment defense, the suit is dismissed, and the tribe pursuant to 25 U. S. C. § 2710(d)(7)(B)(vii), then may notify the Secretary of the Interior of the Tribe's failure to negotiate a compact with the State. The Secretary may then prescribe regulations governing Class III gaming on the Tribe's lands. This solution conforms with IGRA and serves to achieve Congress' goals, as delineated in §§ 2701-02.

Agency's Power to Adopt Regulations

The department further argues that although Congress likely did not foresee the states' refusal to participate in the court-ordered mediation process, it plainly authorizes the secretary to permit Class III gaming if the court-supervised process fails to produce a joint compact: "If the State does not consent during the 60-day period described in [IGRA] to a proposed compact submitted by a mediator. . . the mediator shall notify the Secretary and the Secretary shall prescribe, in consultation with the Indian tribe procedures. . . " (25 USC § 2710(d)(7)(B)(vii)).

The department contends that an agency's power to administer a congressional mandate like this one is not restricted "to circumstances explicitly described by Congress; the agency's power also extends to circumstances that Congress for a variety of reasons may not have anticipated or articulated in the statute. " In defense of this reasoning, the department cites, among others, Auer v. Robbins. In this case, the court said when Congress has not "directly spoken to the precise question at issue," courts "must sustain in the Secretary's approach so long as it is based on a reasonable construction of the statute" (117 S. Ct. 905, 909 (1997), quoting Chevron U. S. A. , Inc. v. Natural Resources Defense Council, 467 U. S. 837, 842-43 (1984)).

STATES' RESPONSE TO REGULATIONS

On June 19, 1998, attorneys general from 26 states submitted comments to the Interior Department on the proposed rule (letter attached). These are the same objections that would likely be raised to the final regulations.

Secretary Lacks Statutory Authority to Propose Class III Gaming Procedures Outside of IGRA

The states argue that the secretary lacks requisite authority to carry out the regulations, which, among other things, give the secretary authority to adjudicate a state's good faith and discretion to determine the types of Class III gaming to permit. They argue that Congress through IGRA provided a comprehensive scheme governing every aspect of Indian gaming. Tribal gaming must comply with IGRA, and since there is no authority to prescribe procedures under circumstances other than those found in IGRA, the secretary is not free to adopt others by regulation.

IGRA, the states claim, gives the secretary only limited regulatory discretion: the power to prescribe regulations that conform to a mediator's choice of a compact and with state and federal law. They argue that without additional statutory authority, the secretary cannot prescribe alternative regulations in cases in which a state raises an 11^th Amendment defense. But even if Congress intended the secretary to have such far-reaching legislative authority, such a delegation would likely violate the non-delegation doctrine. (Basically, this doctrine says that Congress may not constitutionally delegate its legislative power to another branch of government-see Trouhy v. United States 500 U. S. 160, 165 (1991)).

Further, the states argue, the regulations are premised on a false assumption that tribes have a common law right to gamble and that the secretary has an abstract authority to protect that right. But, the Supreme Court, in California v. Cabazon of Mission Indians, 480 U. S. 202 (1987) "did not recognize an unfettered federal common law right of Tribes to engage in gambling anywhere for any purpose, free of state regulation or law" (p 8).

Regulations' Reliance on the 11th Circuit's Decision in Seminole is Flawed

The states contend that the regulations are not justified under the 11th Circuit's decision in Seminole Tribe of Florida v. Florida (11 F. 3d 1016 (1994)). They argue that the 11th Circuit's dicta suggesting that the secretary may prescribe procedures if a state raises an 11^th Amendment defense is contrary to a plain reading of IGRA, which allows secretarial intervention only after the court finds that the state has not negotiated in good faith and the court-appointed mediator has attempted to resolve the matter. In itself, an 11^th Amendment defense is not a failure to negotiate in good faith, but it triggers the regulations as if it were such a failure. Thus, the regulations effectively circumvent the Supreme Court Seminole holding, accomplishing "administratively what the Supreme Court ruled Congress could not do legislatively. "

Regulations are not a Reasonable Statutory Construction

The states also argue against the department's suggestion that courts should rely on the secretary's reasonable interpretation of IGRA on the grounds that the regulations are not a reasonable interpretation of IGRA. IGRA, they say, limits the secretary to a ministerial role, vesting most of the power to resolve tribal-state disputes in the courts and mediators. By giving the secretary broad power to resolve tribal-state disputes, the regulations are contrary to IGRA's spirit and goes beyond Congress' clear intent.

Regulations Eliminate the States' Role in Negotiating Compacts

The states argue that the regulations eliminate the tribal-state negotiations Congress contemplated when it enacted IGRA. It allows secretarial action to be triggered by a sovereign immunity claim, not bad faith, as Congress intended. The tribe may then petition the secretary, undoubtedly for permission to conduct gaming activities that it knows the state would disallow. While the regulations allow state comments and counter proposals, state participation is rendered meaningless. Congress intended the tribe and state to work out their differences and agree to a compact. The regulations allow a tribe to bypass tribal-state negotiations and transform the negotiations into one between the tribe and federal government, entirely contrary to the intent of Congress in IGRA. Such a reformulation is a legislative issue plainly outside the department's authority.

Regulations Constitute Bad Public Policy

Additionally, the states argue that the regulations fail to respect the states' role and constitute bad policy. It gives the secretary judicial power "to pass on the good faith of states in the tribal-state negotiations. "

. . . such an action by a federal agency head [is] tantamount to the commandeering and second-guessing of the sovereign discretion of a State government, which is unwarranted, unwise and provocative. . . . Congress has not provided to the Secretary of the Interior the power to act as a federal court to pass on the facts and law as they relate to the conduct of a State during tribal-state negotiations (p. 10)

Moreover, the states argue, the secretary simply cannot know the intricacies of tribal-state negotiations and thus is in no position to attempt to resolve these disputes. Further, the secretary, who has a trust responsibility to further tribal interests, cannot properly serve in an impartial judicial role. Finally, the secretary should not serve in that role anyway; as a member of the executive, the secretary does not have the adjudicative power to second-guess a states' good faith.

Circumvention of the Seminole Decision and Disincentive for Tribes to Negotiate

Finally, the states argue that the regulations impermissibly circumvent Seminole. Seminole recognized states as sovereign entities and denied Congress the power to subject them to suit in federal courts without consent. The regulations sidestep that recognition and merely substitute the federal jurisdiction of the secretary for the courts, doing administratively what the Supreme Court held Congress cannot do legislatively.

When a tribe sues the state under IGRA, it risks losing its claims. This process serves as a practical disincentive for tribes to sue on unsettled matters and instead to negotiate. The regulations remove this subtle incentive for tribes to negotiate and clearly remove the risks of litigation. It gives the tribe a friendly forum where tribal arguments will be heard by an adjudicator (the secretary) who has a trust responsibility for the tribe and who looks out for tribal interests as a general matter.

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