Brief of Amici Curiae in Support of AT&T Corporation and Affirmance (Part 2)

21 October 1999
(Continued from Part 1)

In this regard [the use of modem technology], the Committee recognizes that tribes may wish to join with other tribes to coordinate their class II operations and thereby enhance the potential of increasing revenues. For example, linking participant players at various reservations whether in the same or different States, by means of telephone, cable, television or satellite may be a reasonable approach for tribes to take. Simultaneous games participation between and among reservations can be made practical by use of computers and telecommunications technology . . . .

Id. at 3079 (emphasis added); see Cabazon Band of Mission Indians v. National Indian Gambling Comm'n,, 14 F.3d 633, 636 (D.C. Cir. 1994) (Senate Report emphasizes how "communications technology" might link players in remote locations on other reservations). If the Committee actually intended for the "on Indian lands" requirement to be applied in the manner suggested by the Tribe, the above-referenced context would have presented an ideal opportunity for the Committee to acknowledge that Indian gaming could be played off-reservation by use of the telephone, television, etc. Congress failed, however, to state such an intent. Instead, consistent with the plain and historical meaning of the "on Indian lands" mandate, it recognized that technology could be used to link together various reservations at which the subject game would be played. It is apparent, therefore, that Congress was cognizant of the legal significance of the 4 C. on Indian lands" requirement and intended for the phrase to be given its long-standing, historical meaning.

b. Adoption of the Tribe's argument would defeat IGRA's intent relating to tribal-state compacts for Class III gaming.

The Tribe's strained interpretation of the "on Indian lands" requirement also undermines a central purpose of IGRA as it relates to Class III gaming. A critically important condition imposed by IGRA for the conduct of a Class M gaming activity on Indian lands is that the tribe negotiate a compact with the state in which the game is played. See 25 U.S.C. § 27 1 0(d)(1) and (3) (1994 & Supp. 11 1997); see also Pueblo of Santa Ana v. Kelly, 104 F.3d 1546, 1554 (10th Cir. 1997) ("While preservation of tribal sovereignty was clearly of great concern to Congress, respect for state interests relating to Class III gaming was also of great concern.").

Congress designed this provision to allow the tribe, on whose land the Class III game is played, and the state in which the Indian land is located, to reach agreement as sovereign entities on issues of mutual interest and Concern. In this regard, the Senate Committee Report states:

It is also true that S. 555 does not contemplate and does not provide for the conduct of class III gaming activities on Indian lands in the absence of a tribal-State compact. In adopting this position, the Committee has carefully considered the law enforcement concerns of tribal and State governments, as well as those of the Federal Government, and the need to fashion a means by which differing public policies of these respective governmental entities can be accommodated and reconciled. This legislation is intended to provide a means by which tribal and State governments can realize their unique and individual governmental objectives, while at the some time, work together to develop a regulatory and jurisdictional pattern that will foster a consistency and uniformity in the manner in which laws regulating the conduct of gaming activities are applied.

Id at 3076 (emphasis added). With respect to the state interests that are served by the compact requirement, the Report further states:

[a] State's governmental interests with respect to class III gaming on Indian lands include the interplay of such gaming with the State's public policy, safety, law and other interests, as well as impacts on the State's regulatory system, including its economic interest in raising revenue for its citizens.

.Id. at 3083. Thus, the compact requirement of IGRA balances the respective interests of the tribe and state regarding Class III gaming and mandates a negotiation between the sovereigns to address these interests.

Where persons in a particular state are placing wagers in that state on a lottery, no matter where the winning lottery numbers are selected, the state clearly has significant public policy and other interests in the gaming activity. Nevertheless, if the Tribe's position regarding the "on Indian lands" requirement were to prevail, its proposed gaming would comply with IGRA but no compact would be negotiated between the Tribe and any of the individual affected states. This result would directly contravene the legislative intent underlying the compact requirement of IGRA inasmuch as the state from which the wagers are placed would not be able to address its public policy and other concerns with the Tribe. Congress certainly did not intend such a result that would totally undermine the purpose of the compact requirement. As Congress made clear when it enacted the laws against interstate lotteries, state public policy is not to be tossed aside in such a cavalier manner:

[I]f thirty-six states were to make the most penal statutes against lotteries, and the mails were open to one that allowed lotteries, the laws of the thirty-six States would be rendered nugatory, because all of the people in the thirty-six States could obtain their tickets from this one State as well as though they were authorized from the whole. Therefore if the matter is allowed to ran through the mails, any laws by any State against lottery tickets are entirely valueless.

Martin v. United States, 389 F.2d 895, 898 n.6 (5th Cir. 1968) (discussing enactment and application of the 1976 interstate lottery prohibition law, codified in part as 18 U.S.C. § 1084).

Similarly, if the Tribe is permitted to offer a lottery in the amici states without compacts with those states, the states' laws, as well as the compacting requirement of IGRA, are rendered valueless. Congress granted the states a right that they would not have otherwise had by the passage of IGRA - the right to be involved in the regulation of Class M gambling. If Idaho and the Tribe can agree to a lottery in all of the states, then the rest of the states are denied that right. 6 IGRA clearly contemplated that each state be given the opportunity to negotiate with and reach agreement with Tribes in that state for the offering of Class III gambling. The Tribe's argument would deny states that right in direct contradiction of the intent of Congress.

C. The Tribe's argument transforms every telephone into a gambling device and will exponentially expand off-reservation gambling.

Also contrary to the intent of Congress, the Tribe's legal analysis would allow every telephone or computer to become a gambling device. If the Tribe's argument were to prevail, the use of any off-reservation telephone, computer with a modem, etc., to make contact with the reservation would satisfy the "on Indian lands" requirement of IGRA. The gambling would not necessarily be limited to a lottery, but consistent with the Tribe's legal argument could include the remote play from outside the reservation of slot machines, blackjack, roulette and cmps. Such a proliferation of gambling by use of communication devices located off-reservation certainly was not contemplated by Congress. A contrary conclusion would make a sham of the critical "on Indian lands" requirement of IGRA.

In summary, Congress expressly imposed the "on Indian lands" requirement and did not provide for the play of a game off-reservation. IGRA's legislative history similarly emphasizes the importance of the "on Indian lands" mandate. Moreover, in acknowledging that modem technology can be used to facilitate Indian gaming under IGRA, the legislative history is very careful to discuss the subject in a context that comports with IGRA's "on Indian lands" mandate, i.e., televising a game between and among reservations7, where the players are physically present on the various reservations. The Tribe's position is not only contrary to the plain, literal and historical meaning of the "on Indian lands" requirement, but it would totally undermine the compacting requirement which is such an essential part of IGRA. The logic of the Tribe's legal analysis also would allow the play of various forms of gambling, not just a lottery, by persons located off Indian lands. For the reasons stated above, such a result would conflict with the purpose and intent of IGRA.

B. As The District Court Concluded, The Management Contract Approval And Letter From The Former NIGC Chairman Are Not Entitled To Any Deference.

The Tribe contends that the approval of its management contract by former NIGC chairman Harold Monteau and Monteau's September 21, 1995 letter to MCI opining on the legality of the NIL are entitled to deference from this Court. The district court considered both of these arguments and properly rejected them.

It is first important to note that, contrary to the Tribe's assertion, the NTGC has not taken a position on the legality of interstate gaming like the NEL. Rather, on November 14, 1997, the NIGC held a hearing on Internet based gaming, including whether such gaming complies with the "on Indian lands" requirement of IGRA. See August 14, 1998 District Court Affidavit of Alan I. Gilbert, 1-2 and Exh. C. The states responded to the NIGC's request for input and submitted materials explaining why gambling over the internet did not comply with IGRA's "on Indian lands" requirement. Id. Neither a decision nor a statement has yet been made by the NIGC on the subject. Id. at 2. It is significant that the NIGC held hearings without issuing any statement or decision regarding interstate gambling via the intemet which, for all relevant purposes, is substantively indistinguishable from the form of gaming at issue in this case,8 interstate gambling over the telephone. Clearly, the NIGC does not believe that the "on Indian lands" question has been resolved.

In any event, as the district court reasoned, neither the management contract approval nor the Monteau letter are the type of agency actions that warrant judicial deference. The management contract approval process is intended as no more than a "paper review" of the necessary tribal gaming management requirements. Bruce H. Lien Co. v. Three Affiliated Tribes, 93 F.3d 1412, 1418 (8th Cir. 1996) (court acknowledged that management contract approval "is not more than a paper review to test the sufficiency of the documents submitted ... and to review whether [it] meets the required contents [specified under IGRA]"). Similarly, Monteau's letter is merely a conclusory expression of his personal opinion. This type of expression clearly does not constitute either rulemaking or an adjudication with respect to which judicial deference might be appropriate. See Chevron, USA., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984) (Chevron deference to agency interpretation of a statute that it administers is appropriate only if that interpretation is rendered by way of legislative rule or adjudication) (emphasis added); Passamaquody Tribe v. Maine, 897 F. Supp. 632, 637 (D. Me. 1995), aff'd, 75 F.3d 784 (1st Cir. 1996) (NIGC chair decision not entitled to deference as opinion is not in form of a neutral policymaker to which courts generally defer).

Even if the management contract approval or the Monteau letter are considered to be a rule or adjudication, they still are not entitled to any deference. When "Congress has spoken to the precise question at issue," the court and the agency "must give effect to the unambiguously expressed intent of Congress." Chevron, 467 U.S. at 842. In enacting IGRA, Congress declared its intention to regulate, and expressly preempt state regulation of, gaming "on Indian lands." 25 U.S.C. §§ 2701, 2702 (1994 & Supp. ff 1997). As discussed above in detail, Congress has sanctioned gaming only insofar as it, including the placing of wagers, occurs physically on Indian land. To allow participation via the telephone by persons not physically on Indian land would nullify the definition's plain meaning. Where an agency official makes a "bald statement' in direct opposition to the "language and purpose" of a statute, no deference is appropriate. Brock v. Louvers and Dampers, Inc., 817 F.2d 1255, 1258-59 (6th Cir. 1987).

Finally, neither the management contract approval nor the Monteau letter include any analysis of the issue involved in this case, i.e., whether the NEL is conducted "on Indian lands" within the meaning of IGRA9 As such, these documents are of little or no persuasive weight. See Brock v. Louvers & Dampers, Inc., 817 F.2d 1255, 1258 (6th Cir. 1987) ("[u]nexplained agency constructions have little persuasive value"); SEC v. Sloan, 436 U.S. 103, 118, 98 S. Ct. 1702,y 1712, 56 L. Ed. 2d 148 (1978 Wilshire Westwood Association v. Atlantic Richfield Corp., 881 F.2d 801, 909 (9th Cir. 1989) (in order for court to give weight to agency's interpretation, court looks to thoroughness of agency consideration and validity of its reasoning); Kilgore v. Outback Steakhouse of Florida, Inc., 160 F.3d 294, 303 (6th Cir. 1998) ("opinion letters [that] provide no reasoning or statutory analysis to support their conclusion" are not persuasive); Sioux Valley Hospital v. Bowen, 792 F.2d 715, 719 (8th Cir. 1986) ("Deference is due... when the agency's interpretation is the result of thorough and reasoned consideration."). In short, both the approval and the Monteau letter lack any of the indicia necessary to accord it any weight or influence.

View Part 3

6The absurdity of the Tribe's argument is highlighted by the fact that the Tribe's legal analysis would allow the Tribe to offer the NIL in states where gambling is altogether prohibited. See note 3, supra. Indeed, the Tribe argues that as long as it has compacted with the state of Idaho, IGRA completely preempts state gambling laws with respect to the NIL.

7The Tribe argues that section 2720 of IGRA creates a "wholesale exemption from the anti-lottery statutes....." Tribe's Brief, p. 32. Contrary to the Tribe's assertion, section 2720 only exempts "gaming conducted by an Indian tribe pursuant to this chapter." Consistent with the states' position and the legislative history, this exemption simply acknowledges the legality of two or more tribes jointly conducting gaming activities within their reservations. As the district court noted, "[t]he possibility that class M gaming would be conducted between the 'various reservations' apparently lead Congress to exempt IGRA gaming from the proscriptions contained in 18 U.S.C. §§1301, 1302." District Court Memorandum Decision & Order, p. 11, n.9.

8Interstate gambling over the intemet is substantively indistinguishable from interstate gambling over the telephone as both transmit the gambling information over fiber optic lines. The intemet transmits the information via electronic impulses whereas the telephone transmits the information via analog impulses or sound. With both forms of gaming, the bettor is not physically present on tribal lands.

9The Tribe also claims that the district court erred by allowing the states to file an amicus curiae memorandum. This argument is apparently based on the assertion that the filing of an amicus memorandum somehow constitutes an illegal collateral challenge to the NIGC's approval of its management contract. The Tribe's argument is flawed for a number of reasons. First, the Tribe not only failed to object to the states' appearance as amici at the district court, but it affirmatively filed a pleading with the district court that expressly did not oppose the states' participation as amici. See Coeur D'Alene Tribe's Notice of Nonopposition to States' Appearance as Amicus Curiae dated April 1, 1998. Therefore, the Tribe waived any objection before the district court and cannot raise the issue for the first time on appeal. See U.S. v. Robertson, 52 F.3d 789, 791 (9th Cir. 1995).

Second, the states were not parties to the management contract approval and, as such, are not bound by the approval. See Steen v. John Hancock Mutual Life Insurance, 106 F.3d 904, 910 (9th Cir. 1997) (parties or those in privity are bound by earlier decision, not those who were not able to litigate adversely to one another); A & A Concrete, Inc. v. White Mountain Apache Tribe, 781 F.2d 1411, 1417 (9th Cir. 1986) (non-party to earlier action cannot be prevented from advocating its position unless it somehow participated or controlled prosecution or defense in earlier action). Furthermore, the states did not have notice that former Chairman Monteau's approval of the management contract would allow people physically located in the amici states to play the NIL. Even the management contract approval itself does not mention the central issue before the court: whether the NIL complies with the "on Indian lands" requirement of IGRA. See Tribe's Excerpts of Record, 45, 180. It is simply absurd for the Tribe to suggest that the states, who were not even parties to the compact between the Tribe and State of Idaho, and who are not even parties to this proceeding, are now foreclosed from advocating their position before the Court.

Finally, it is apparent that a federal court is authorized to decide matters that may have also been the subject of consideration by the NIGC. See RITA, Inc. v. Flandreau Sante Sioux Tribe, 798 F. Supp. 586, 587-88 (D. S.D. 1992) (action by casino management company against tribe where court agreed that although "IGRA provides at 25 U.S.C. § 2714 for judicial review of final agency decisions in the appropriate Federal district court[,] [t]his Court also has jurisdiction over all civil actions arising under the laws of the United States. 28 U.S.C. § 1331 "); Pueblo of Santa Ana v. Kelly, 104 F.3d 1546, 1556 (10th Cir. 1997) ("IGRA is federal statute, the interpretation of which presents a federal question suitable for determination by a federal court. Thus, [the Court] indisputably ha[s] the power to determine whether a Tribal-State contract is valid" even after approval by Secretary of Interior).