MEALEY’S
TMTM
Native American Law Report
March 2015 Volume 1, Issue #1
High Court Denies Certiorari In Case Involving Sale...
Cheryl Keely
editor
Joan Grossman, Esq.
managing editor
Jennifer Hay
copy desk manager
Amy Bauer
marketing brand manager
T...
In this Issue
Gaming
High Court Denies Certiorari In Case
Involving Sale Of Interest In Casino...................... page ...
News
High Court Denies Certiorari
In Case Involving Sale
Of Interest In Casino
WASHINGTON, D.C. — The U.S. Supreme Court
o...
remaining amount of the debt, plus attorney fees, im-
mediately due and owed to them from the tribe and
the authority.
The...
Grant S. Cowan of Frost Brown Todd in Cincinnati
and David A. Lerner of Plunkett Cooney in Bloomfield
Hills represent the d...
to be a State entity, in violation of the Rhode Island
Constitution.’’ The Supreme Court commented that
questions regardin...
to participate in the sweepstakes contest so that the
Tribe will receive financial gain.’’
Contempt
Despite the court’s rej...
submitted by the state has fallen short of the standard
required, she added.
William T. Deane of the Office of the Attorney...
the State and the Tribe. It is a matter of both law and
common sense that such a compact dispute cannot
properly be litiga...
the equitable defenses asserted by the CVWD and
DWA. In Phase III, if necessary, the court will under-
take the fact-inten...
Attorneys
Emil W. Herich and Catherine F. Munson of Kilpa-
trick Townsend and Stockton in Beverly Hills, Calif.,
David J. ...
No Enhanced Obligations
With respect to enhanced trust obligations, Judge
Gordon said the government acts not as a private...
their standing. It says the U.S. Interior Department’s
waiver of the allottees’ claims will not be effective until
the Wat...
litigation, and specifically support the federal fin-
ancial authorization included in the proposed
legislative text.’’
‘‘F...
Additionally, the regulations are ‘‘consistent with the
language, structure and purpose of the ACA,’’ the gov-
ernment arg...
Coppe is represented by Dean Nash and Brian Fran-
ciskato in Kansas City, Mo. The plan is represented
by Christopher C. Ha...
of sovereign immunity. Under the statute, the federal
government waives its immunity and grants district
courts ‘‘original...
Yoder of Yoder Langford in Phoenix and Vernle C.
Durocher Jr. of Dorsey Whitney in Minneapolis rep-
resent the community...
Adams LLP, an independent accounting firm, con-
ducted the audit. Sage Hospital contends that it was
supposed to be provide...
Tribe Members’ Class Claims
For Compensation Filed
Too Late, Judge Finds
SIOUX FALLS, S.D. — Class claims filed by four
mem...
alienation of their land at the time it occurred or
that the flooding of their land was somehow concealed
from them. Thus, ...
asked the court to determine whether Rule 60(b)(5)
permits such a shift.
The state says that it does not and that the Seve...
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Native American Law Report, March 2015 issue

This new publication from LexisNexis Mealey's editors tracks litigation in federal, state and tribal courts relevant to Native American law. Download or share this complimentary issue. To order, call 800.223.1940 or visit the LexisNexis Store at: http://bit.ly/1ADatl2
Published on: Mar 3, 2016
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Transcripts - Native American Law Report, March 2015 issue

  • 1. MEALEY’S TMTM Native American Law Report March 2015 Volume 1, Issue #1 High Court Denies Certiorari In Case Involving Sale Of Interest In Casino WASHINGTON, D.C. — The U.S. Supreme Court on Feb. 23 denied a petition for writ of certiorari in case for breach of contract after the buyers and guarantors breached their payment obligations for the purchase of membership interest in a casino, leaving stand lower court decisions finding that the plaintiffs could not unilaterally modify the guaranty agreement and that the Indian tribe and its authority had not waived its defenses to the claims. SEE PAGE 4. California Federal Judge: Water Right Reserved, But Land Act Extinguished Claim RIVERSIDE, Calif. — A federal judge in California on March 20 granted partial summary judgment in favor of the Agua Caliente Band of Cahuilla Indians and the United States’ claim that the government implicitly reserved appurtenant water sources, including underlying groundwater, when it created the tribe’s reservation, but granted the defendants partial summary judgment on the tribe’s aboriginal title claims, saying a land act effectively extinguished any such right. SEE PAGE 10. Government Asks Judge To Dismiss Indian Tribe’s ACA Employer Mandate Challenge CHEYENNE, Wyo. — An Indian tribe waived its objections to the Patient Protection and Affordable Care Act (ACA)’s large employer mandate by not raising them during the rulemaking process, and its action runs afoul of the Anti-Injunction Act’s (AIA) bar on tax challenges taxes, the government told a federal judge on March 19. SEE PAGE 15. Tribe Members’ Class Claims For Compensation Filed Too Late, Judge Finds SIOUX FALLS, S.D. — Class claims filed by four members of the Cheyenne River Sioux Tribe alleging that the United States violated its trust and fiduciary duties by taking their land without just compensation are barred by the statute of limitations and because there is no waiver of sovereign immunity, a South Dakota federal judge ruled Feb. 26 in granting the government’s motion to dismiss the claims. SEE PAGE 21. Chippewa Indian Tribe Opposes High Court Review Of Hunting Decision WASHINGTON, D.C. — The Lac Courte Oreilles Band of Lake Superior Chippewa Indians on March 9 asked the U.S. Supreme Court to deny a petition for writ of certiorari filed by the State of Wisconsin and leave intact a Seventh Circuit U.S. Court of Appeals decision finding that the tribe had met its burden to show that a total ban on the nighttime hunting of deer was no longer necessary to ensure public safety. SEE PAGE 22. Wyoming Federal Judge: Eagle Permit Violates Exercise Of Religion CHEYENNE, Wyo. — Calling the issue one of first impression, a Wyoming federal judge on March 12 held that the First Amendment to the U.S. Constitution forbids the federal government from imposing the burden of law on one federally recognized Indian tribe’s free exercise of religion for the benefit of another Indian tribe. SEE PAGE 23. Parties File Summary Judgment Motions In ‘Redskins’ Trademarks Suit ALEXANDRIA, Va. — The owners of the Washington Redskins professional football team on Feb. 23 filed a motion for summary judgment in a Virginia federal court in its challenge to the cancellation of six federal trademark registrations relating to the team, while the defendants on Feb. 26 filed a motion for partial summary judgment, saying that there was no error committed in the cancellation of the marks because the evidence shows the marks ‘‘may disparage’’ Native Americans. SEE PAGE 27. Supreme Court Denies Review Of Ruling On Washington Escrow Statute WASHINGTON, D.C. — The U.S. Supreme Court March 9 denied a petition for review of a ruling requiring a tobacco distributor owned by the Yakama Indian Nation to escrow funds to reimburse the State of Washington for health care costs related to tobacco use. SEE PAGE 29.
  • 2. Cheryl Keely editor Joan Grossman, Esq. managing editor Jennifer Hay copy desk manager Amy Bauer marketing brand manager Toria Dettra production associate To contact the editor: Cheryl Keely (215) 988-7727 email: cheryl.keely@lexisnexis.com The Report is produced monthly by LexisNexisª Mealey’sä 1600 John F. Kennedy Blvd., Suite 1655 Philadelphia, PA. 19103 (215) 564-1788 Customer Service: 1-800-MEALEYS (1-800-632-5397) Email: mealeyinfo@lexisnexis.com Web site: www.lexisnexis.com/mealeys Print: $995* for a full year * Plus sales tax, shipping and handling where applicable. An online version of this report with email delivery is also available through LexisNexis on www.lexis.com. Contact your LexisNexis representative or call 1-800-223-1940 for details. PRINT ISSN ONLINE ISSN EBOOK ISBN 9781632827265 LexisNexis and the Knowledge Burst logo are registered trademarks of Reed Elsevier Prop- erties Inc., used under license. Mealey’s is a trademark of LexisNexis, a division of Reed Elsevier Inc. ª 2015, LexisNexis, a division of Reed Elsevier Inc. All rights reserved. MEALEY’S TMTM Native American Law Report March 2015 Volume 1, Issue #1 Cases in this Issue Page Ted Gatzaros, et al. v. The Sault Ste. Marie Tribe of Chippewa Indians, et al., No. 14-665, U.S. Sup. ........................................................................................ 4 Narragansett Indian Tribe v. State of Rhode Island, et al., No. 12-322, R.I. Sup..... 6 Texas v. Ysleta Del Sur Pueblo, No. 99-320, W.D. Texas ........................................ 7 State of Michigan v. Aaron Payment, et al., No. 1:12-cv-962, W.D. Mich.............. 9 Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water District, et al., No. 13-883, C.D. Calif. ....................................................................... 10 Center for Biological Diversity v. United States Bureau of Land Management, et al., No. 14-226, White Pine County, et al. v. United States Bureau of Land Management, et al., No. 14-228, D. Nev............................................. 12 Crow Allottees Association, et al. v. United States Bureau of Indian Affairs, No. 14-62, D. Mont., Billings Div..................................................................... 13 Northern Arapaho Tribe, et al. v. Sylvia Burwell, et al., No. 14-247, D. Wyo......... 15 Amy Coppe v. The Sac & Fox Casino Healthcare Plan, et al., No. 14-2598, D. Kan................................................................................................................. 16 Gila River Indian Community v. Sylvia Matthews Burwell, et al., No. 14-943, D. Ariz................................................................................................................. 17 Navajo Health Foundation — Sage Memorial Hospital Inc. v. Sylvia Mathew Burwell, et al., No. 14-958, D. N.M.................................................... 19 Casimir L. Lebeau, et al. v. United States of America, No. 14-4056, D. S.D........... 21 State of Wisconsin, et al. v. Lac Courte Oreilles Band of Lake Superior Chippewa Indians, et al., No. 14-792, U.S. Sup................................................ 22 Northern Arapaho Tribe v. Daniel Ashe, in his official capacity of U.S. Fish & Wildlife Service Director, No. 11-347, D. Wyo. ........................................... 23 Jose Rojas v. James Heimgartner, No. 14-3178, 10th Cir......................................... 26 Pro-Football Inc. v. Amanda Blackhorse, et al., No. 14-1043, E.D. Va.................... 27 Confederated Tribes and Bands of the Yakama Indian Nation, et al. v. Robert McKenna, No. 14-947, U.S. Sup. ...................................................................... 29 State of New York v. Mountain Tobacco Co., et al., No. 12-6276, E.D. N.Y......... 30 Western Sky Financial, et al. v. Deborah Jackson, et al., No. 14-991, U.S. Sup. ......................................................................................................... 31 Benjamin D. Harris v. Lake of the Torches Resort & Casino, No. 2014AP1692, Wis. App., Dist. 3 ............................................................................................... 33 Resources For Indian Student Education Inc. v. Cedarville Rancheria of Northern Paiute Indians, et al., No. 14-2543, E.D. Calif.................................. 35 Navajo Nation v. San Juan County, No. 12-39, D. Utah......................................... 37 Eric Williams, et al. v. CashCall Inc., No. 14-903, E.D. Wis. ............................. 39 Michelle Joan Roberts, et al. v. Robert Kelly, et al., Belmont, et al. v. Robert Kelly, et al., Nos. 2013-CI-CL-003, 2014-CI-CL-007, Nooksack Tribal.......... 41 Ronald D. Allen, Jr., et al. v. Robert H. Smith, et al., No. 13-55552, 9th Cir. ....... 42 Ventura County Human Services Agency v. B.G., et al., No. B255712, Calif. App., 2nd Dist., Div. 6 ............................................................................. 43 Published document is available at the end of the report. For other available documents from cases reported on in this issue, visit www.mealeysonline.com or call 1-800-MEALEYS.
  • 3. In this Issue Gaming High Court Denies Certiorari In Case Involving Sale Of Interest In Casino...................... page 4 Narragansett Indian Tribe’s Facial Challenge To Rhode Island’s Casino Act Fails........................ page 6 Texas Federal Judge Finds Tribe Violated Injunction Prohibiting Gaming.............................. page 7 Tribal Officers Claim Sovereign Immunity In Michigan Casino Dispute.................................. page 9 Water Rights California Federal Judge: Water Right Reserved, But Land Act Extinguished Claim................................................................... page 10 Nevada Federal Judge Dismisses 1 Count In Challenge To Water Pipeline Approval ................ page 12 Crow Water Allottees Lack Standing For Legal Defense, Indian Affairs Says........................ page 13 Natural Resources Committee Outlines Process For Water Rights Settlements .................. page 14 Health Care Government Asks Judge To Dismiss Indian Tribe’s ACA Employer Mandate Challenge..............page 15 Plan Participant Need Not Exhaust Tribal Remedies Under ERISA, Judge Rules .................. page 16 Breach Claim Dismissed; Reimbursement Claim Continues In Funding Dispute.................. page 17 New Mexico Federal Judge Declines To Transfer Dispute Over Hospital Funding............. page 19 Land Taking TribeMembers’ClassClaimsForCompensation Filed Too Late, Judge Finds .........................................page 21 Regulation Of Activity Chippewa Indian Tribe Opposes High Court Review Of Hunting Decision............................... page 22 Exercise Of Religion Wyoming Federal Judge: Eagle Permit Violates Exercise Of Religion ............................... page 23 10th Circuit Affirms Prison Did Not Violate Native American’s Religious Rights...................... page 26 Trademarks Parties File Summary Judgment Motions In ‘Redskins’ Trademarks Suit ............................. page 27 Tobacco Supreme Court Denies Review Of Ruling On Washington Escrow Statute........................... page 29 Judge: New York May Seek Discovery From Owner Of Native American Tobacco Company ............................................................. page 30 Tribal Jurisdiction Loan Company Petitions High Court Over Arbitration Ruling In Loan Dispute..................... page 31 Wisconsin Appeals Court Affirms Indian Tribe Did Not Waive Sovereign Immunity............................................................. page 33 California Federal Judge Dismisses Dispute Over Pay For Lack Of Jurisdiction....................... page 35 Voting Utah Federal Judge Declines To Dismiss Dispute Over Election District Boundaries ........................................................... page 37 Arbitration Judge Splits Arbitration Order For Plaintiffs In Interest Rate Suit............................................. page 39 Disenrollment Parties To Maintain Status Quo Pending Appeal In Disenrollment Proceedings .................. page 41 Doctrine Of Ex Parte Young Does Not Permit Disenrollment Lawsuit, 9th Circuit Holds....................................................... page 42 Family Law 2 Minors Covered Under Indian Child Welfare Act, California Appeals Court Rules .................................................................... page 43 Bureau Of Indian Affairs Announces Proposed Rule To Govern Child Welfare................................................................. page 44 New Statute Provides For Same-Sex Marriages In Tlingit, Haida Tribes ...................... page 45 MEALEY’S Native American Law Report Vol. 1, #1 March 2015 Cite as Mealey’s Native American Law Report, Vol. 1, Iss. 1 (3/15) at p.___, sec.___. 3
  • 4. News High Court Denies Certiorari In Case Involving Sale Of Interest In Casino WASHINGTON, D.C. — The U.S. Supreme Court on Feb. 23 denied a petition for writ of certiorari in case for breach of contract after the buyers and guaran- tors breached their payment obligations for the pur- chase of membership interest in a casino, leaving stand lower court decisions finding that the plaintiffs could not unilaterally modify the guaranty agreement and that the Indian tribe and its authority had not waived its defenses to the claims (Ted Gatzaros, et al. v. The Sault Ste. Marie Tribe of Chippewa Indians, et al., No. 14-665, U.S. Sup.). (Petition available. Document #96-150325-015B.) Membership Interest Sold Ted and Maria Gatzaros owned a substantial member- ship interest in Monroe Partners, an entity that owned 50 percent of Greektown Casino LLC, the operator of Greektown Casino in Detroit. When the Gatzaroses decided to sell their interest, Monroe agreed to redeem it for $265 million, to be paid to the Gatzaroses over time in a series of ‘‘liquidation payments.’’ To accom- plish the redemption, the Gatzaros and Monroe entered into an ‘‘Amended and Restated Limited Lia- bility Company Redemption Agreement’’ on July 28, 2000. The redemption agreement identified the ‘‘Redemption Amount’’ as $265 million. Contemporaneously with the redemption transaction, Monroe sold the Gatzaroses’ redeemed member- ship interest to Kewadin Greektown Casino for $265 million. Monroe accomplished the sale of the Gat- zaroses’ interest through an ‘‘Amended and Restated Limited Liability Company Subscription Agreement’’ executed by Monroe and Kewadin on July 28, 2000. The subscription agreement defined the ‘‘Subscription Amount’’ as ‘‘the Redemption Amount,’’ in other words, $265 million. In the subscription agreement, Kewadin agreed to pay Monroe the amounts owed to the Gat- zaroses under the redemption agreement as those pay- ments came due. The subscription agreement required Kewadin to obtain a limited guaranty agreement from the Sault Ste. Marie Tribe of Chippewa Indians and the authority binding them, with certain conditions pre- cedent, to pay the subscription amount in the event that Kewadin defaulted on its obligations under the subscription agreement. On the day the redemption and subscription agree- ments were executed, the tribe and the authority exe- cuted the guaranty agreement. The tribe and the authority agreed to pay the subscription amount if Kewadin defaulted on the subscription agreement. Recovery Sought The Gatzaroses received most of the payments due to them under the redemption agreement, but Kewadin ultimately breached its payment obligation under the subscription agreement with Monroe. Monroe in turn breached its payment obligation to the Gatzaroses under the redemption agreement. On May 29, 2008, Kewadin and Monroe filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the East- ern District of Michigan. In 2012, the Gatzaroses attempted to recover nearly $74 million in principal and interest still owed to them under the redemption agreement. The Gatzaroses’ counsel notified the tribe and the authority by letter that the Gatzaroses, standing in the shoes of Monroe as third- party beneficiary to the guaranty agreement, were mod- ifying and accelerating the funding obligations of the guaranty agreement. The Gatzaroses eliminated limita- tions that had set the necessary conditions precedent on the obligation of the tribe and the authority to pay under the guaranty agreement if Kewadin defaulted on the subscription agreement. The Gatzaroses declared the Vol. 1, #1 March 2015 MEALEY’S Native American Law Report 4
  • 5. remaining amount of the debt, plus attorney fees, im- mediately due and owed to them from the tribe and the authority. The Gatzaroses justified their unilateral action by pointing to ‘‘paragraph 8’’ of the guaranty agreement, which included various waivers by the tribe and the authority. As third-party beneficiaries of the guaranty agreement, the Gatzaroses contended that they may step into the shoes of Monroe and modify, accelerate and enforce the terms of the funding obligation without notice and without affecting the obligation of the tribe and the authority to pay under the guaranty agreement. The Gatzaroses also contended that the tribe and the authority waived all defenses because the guaranty agreement says the tribe and the authority ‘‘uncondi- tionally and irrevocably waive each and every defense and setoff of any nature which, under principles of guaranty or suretyship, would operate to impair or diminish in any way the obligation of the Sault Tribe and the Authority under this Guaranty Agreement.’’ Case Dismissed In November 2012, the Gatzaroses sued the tribe and Kewadin in the Wayne County Circuit Court, seeking declaratory relief concerning their rights under the guaranty to modify the funding obligations so they were no longer subject to limitations that prevent repay- ment of the debt. The Gatzaroses also claimed that the defendants had waived all of their contractual defenses. The defendants removed the case to the U.S. District Court for the Eastern District of Michigan. In July 2013, the District Court granted the defen- dants’ motion to dismiss for failure to state a claim. In an August 2014 divided opinion, the Sixth Circuit U.S. Court of Appeals affirmed the District Court’s decision, saying the Gatzaroses could not unilaterally modify the guaranty agreement because the tribe and the authority did not agree in writing to the modifica- tion, as the guaranty requires, and that they miscon- strue the meaning of the waiver language. The majority also said it found no merit in the Gatzaroses’ conten- tions that the tribe and the authority waived all defenses they may have to the claims. Judge Eric L. Clay dissented, saying the majority was able to uphold the District Court’s ruling only by ‘‘uncritically construing all disputed issues in Defen- dants’ favor.’’ The judge said that because he disagreed with the majority’s characterization of the guaranty’s language, he dissented. High Court Review Sought In December, the Gatzaroses filed a petition for writ of certiorari with the Supreme Court, presenting five questions for review: ‘‘Whether the Majority Opinion of the United Stated Court of Appeals for the Sixth Circuit con- flicts with the decisions of this Supreme Court and other Circuit Courts of Appeals, thereby changing the well-established rules of contract and construction which require specific contract provisions govern over general provisions to re- solve disputes caused by two conflicting contract provisions?’’ ‘‘Whether the Majority Opinion is in direct con- flict with the decisions of this Supreme Court, other Circuit Courts of appeals and the fundamen- tal rules of contract construction which require the application of extrinsic evidence when there is an ambiguity caused by conflicting contractual language?’’ ‘‘Whether the Majority Opinion, in upholding the judicial rewriting of paragraph 8 of the Guaranty, is in direct conflict with the decisions of this Supreme Court and the other Circuit Courts of Appeals which have held the courts must give effect to contracts as written by the parties, and cannot re- write them?’’ ‘‘Whether the Majority’s failure to find the Respon- dents waived their contract defenses contradicts established case law in the other Circuit Courts of Appeals that a guaranty is a contract which must be enforced as written?’’ ‘‘Whether the Majority’s Opinion conflicts with the well-settled standard for reviewing a Motion to Dis- missunderFed.Civ.R.12(b)(6)whenitfailedtoview the facts in the light most favorable to the Petitioners or accept their well-pled allegations?’’ Counsel Thomas L. Stroble and Mitchell H. Boardman of Stroble Law in Bloomfield Hills, Mich., represent the Gatzaroses. MEALEY’S Native American Law Report Vol. 1, #1 March 2015 5
  • 6. Grant S. Cowan of Frost Brown Todd in Cincinnati and David A. Lerner of Plunkett Cooney in Bloomfield Hills represent the defendants. (Additional document available. Sixth Circuit opinion. Document #96-150325-016Z.) I Narragansett Indian Tribe’s Facial Challenge To Rhode Island’s Casino Act Fails PROVIDENCE, R.I. — The Rhode Island Supreme Court on March 4 rejected the Narragansett Indian Tribe’s challenge to the constitutionality of the Rhode Island 2011 Casino Act, which resulted in the removal of gaming machines from which the tribe received income (Narragansett Indian Tribe v. State of Rhode Island, et al., No. 12-322, R.I. Sup.; 2015 R.I. LEXIS 29). (Opinion available. Document #96-150325-074Z.) Twin River is a state-licensed gambling facility in Rhode Island where video lottery terminal (VLT) machines are used. By statute, the tribe is entitled to receive 0.17 percent of net terminal income from the authorized VLT machines at Twin River up to a max- imum of $10,000,000 per year. The 2011 Casino Act provides for the establishment of state-authorized table games at Twin River. As a result of the proposed establishment of table games, approximately 200 VLT machines were removed from Twin River. The tribe filed a complaint against the State of Rhode Island, seeking a declaration that the Casino Act vio- lates Article 6, Section 15, of the Rhode Island Con- stitution, which provides that ‘‘[a]ll lotteries shall be prohibited in the state except lotteries operated by the state . . . and all shall be subject to the prescription and regulation of the general assembly.’’ The tribe also asserted that the Casino Act is unconstitutionally vague and in violation of the nondelegation doctrine in Article 6, Sections 1 and 2, in that ‘‘it delegates certain legislative powers to a private corporation with- out adequate legislative standards or safeguards speci- fied in the statute.’’ UTGR Inc., which operates Twin River, intervened as a defendant. The Washington County Superior Court ruled that although the tribe had standing, it failed to meet its burden of proving beyond a reasonable doubt that the Casino Act is facially unconstitutional. ‘Operational Control’ In January 2014, the Rhode Island Supreme Court held that the tribe had demonstrated ‘‘an injury in fact’’ sufficient to maintain standing. In the instant opinion, the Supreme Court affirmed partial summary judgment in favor of Rhode Island and UTGR. The Supreme Court rejected the tribe’s argument based on the nondelegation doctrine, saying that ‘‘regulation and operation are not mutually exclusive.’’ The court noted that the Casino Act gave the state the ‘‘power to terminate or suspend any casino gaming activities,’’ which is ‘‘essential to the exercise of operational control.’’ In addition, the Casino Act provided that the state shall ‘‘[h]old all other powers necessary and proper to fully effectively execute and administer the provisions of’’ the Casino Act. Facial Challenge The court also rejected the tribe’s facial challenge based on vagueness because vagueness claims must be evaluated based on the statute as applied to the facts of the case. Similarly, because the tribe presented a facial challenge to the Casino Act, the Supreme Court declined to address the tribe’s argument that the statute ‘‘allows the State to potentially delegate disproportionate power to a private entity to operate what is supposed E M A I L T H E E D I T O R email editor cheryl keely at cheryl.keely@lexisnexis.com Vol. 1, #1 March 2015 MEALEY’S Native American Law Report 6
  • 7. to be a State entity, in violation of the Rhode Island Constitution.’’ The Supreme Court commented that questions regarding the operation of the Casino Act are properly raised in the as-applied challenge to the statute that is pending in the Superior Court. Justice Gilbert V. Indeglia wrote the court’s opinion and was joined by Chief Justice Paul A. Suttell and Justices Francis X. Flaherty and William P. Robinson III. The tribe is represented by William P. Devereaux of Pannone Lopes Devereaux West. The state is repre- sented by Michael W. Field of the Office of the Attor- ney General. All are in Providence. I Texas Federal Judge Finds Tribe Violated Injunction Prohibiting Gaming EL PASO, Texas — A federal judge in Texas on March 6 granted the state’s motion for contempt by the Ysleta del Sur Pueblo Indian tribe and its agents for violating an injunction prohibiting gaming devices on the reservation in violation of state law without court approval of any modifications to the order (Texas v. Ysleta Del Sur Pueblo, No. 99-320, W.D. Texas; 2015 U.S. Dist. LEXIS 28026). (Opinion available. Document #96-150325-035Z.) Gaming Activities In 1987, Congress passed the Restoration Act, granting the Ysleta del Sur Pueblo Indian tribe full federal trust status. Under the act, the tribe is restricted from con- ducting gaming operations on its lands. Though the act does not grant Texas civil or criminal regulatory juris- diction over the tribe’s gaming activities, Texas is not precluded ‘‘from bringing an action in the courts of the United States to enjoin violations of [§ 1300g-6(a)]’’ of the act. In 1993, the tribe opened the Speaking Rock Casino and Entertainment Center on its reservation in El Paso. Speaking Rock began as a bingo hall, but it quickly expanded to a full-service casino, offering a wide variety of gambling activities played with cards, dice and balls. In September 1999, the State of Texas sued the tribe and various agents of the tribe in the U.S. District Court for the Western District of Texas, seeking to enjoin the defendants from continuing to operate the gambling activities at Speaking Rock in violation of the Texas Penal Code and the Restoration Act. The District Court issued its original injunction in September 2001. In the order issuing the injunction, the court found that the tribe was conducting illegal gambling operations in violation of the Texas Penal Code and the Restoration Act. The court enjoined the tribe, Tigua Gaming Agency, Tribal Council of the Ysleta del Sur Pueblo, the tribal governor, the tribal lieutenant governor and the gaming commissioner from operating a number of gaming activities played with cards, dice, balls or any other gaming device. The injunction had the ‘‘practical effect of prohibiting illegal as well as legal gaming activities by the [tribe].’’ Modification Requests In October 2001, the defendants moved for a new trial and to amend judgment, asserting that the original injunction was overly broad. In November 2011, the court denied the motion. After an unsuccessful appeal of the court’s refusal to modify the original injunction, the tribe ceased operation of the prohibited gambling activities at Speaking Rock in February 2002. Less than a month later, Pueblo representatives sub- mitted an emergency motion for clarification of an order granting summary judgment and injunction. The representatives sought a declaration that the use of certain electronic gaming devices and third-party sweepstakes would not violate the original injunction. In May 2002, the court modified its original injunction to allow the third-party sweepstakes, but denied the tribe’s request to conduct its own sweepstakes absent a ‘‘firm and detailed proposal showing that said sweep- stakes would be in compliance with Texas law.’’ In September 2003, the defendants filed a second emergency motion for clarification of the summary judgment and injunction order, seeking approval for a tribal sweepstakes promotion. The defendants sought permission to conduct a ‘‘Running Bear Prepaid Phone Card Sweepstakes,’’ which centered around sweepstakes entries granted in connection with the purchase of pre- paid phone cards, as well as the related use of those cards in ‘‘sweepstakes validation terminal[s].’’ The court rejected the proposal on the grounds that the phone cards were ‘‘geared towards inducing purchasers MEALEY’S Native American Law Report Vol. 1, #1 March 2015 7
  • 8. to participate in the sweepstakes contest so that the Tribe will receive financial gain.’’ Contempt Despite the court’s rejection of the proposal, the tribe began operating electronic gaming devices at Speaking Rock in 2008. The tribe issued prizes won in the form of Visa debit cards. Texas moved for contempt for violation of the 2001 injunction. In 2009, the court issued its second contempt order. After finding that the Visa debit card was the ‘‘equiva- lent of money’’ under the Texas Penal Code, the court held the individuals in contempt for operation of illegal ‘‘gambling devices’’ in violation of the modified injunction. Simultaneous to the 2008 contempt proceedings, the defendants filed their third emergency motion for clar- ification of order granting injunction. The motion sought a declaration that the tribe’s ‘‘Texas Reel Skill’’ sweepstakes would not violate the modified injunction. In August 2009, The court rejected the proposal, find- ing that the tribe’s ‘‘representations of value’’ were ‘‘not indistinguishable’’ from the Visa debit cards and, there- fore, did not purge the illegality of the tribe’s gaming devices. The court also found that the Texas Reel Skills sweepstakes was distinguished from the first proposal primarily ‘‘by the substitution of prepaid internet access cards for prepaid phone cards,’’ which is a ‘‘distinction without a legal difference.’’ Less than a week after the court issued the order, the defendants filed a proposal seeking approval for the tribe to conduct a sweepstakes in which participants obtained entries through ‘‘various free methods or through a donation to the Tribe.’’ The court refused permission to conduct the sweepstakes described in the proposal, finding that the proposal lacked sufficiently detailed information regarding the proposed use of elec- tronic gaming devices. Order Violated In spite of the order, the tribe did not cease sweepstakes operations at Speaking Rock, and at some time between 2010 and 2012, the tribe opened a second sweepstakes operation at the Socorro Entertainment Center. In September 2013, the State of Texas filed its second motion for contempt for violation of the 2001 in- junction order. After a serious of amendments, the state filed the instant motion for contempt in March 2014, asserting that the defendants are in violation of the modified injunction for operating an unauthorized tribal sweepstakes, for operating illegal lotteries under Texas law and for operating illegal gambling devices under Texas law. Following a show-cause hearing, Judge Kathleen Cardone granted the contempt motion, holding that the defendants are in contempt for operating un- approved tribal sweepstakes. Judge Cardone said that contrary to the defendants’ argument, the modified injunction is not ambiguous and that the court ‘‘made clear that in order to offer any gaming on its lands, the Tribe must first ‘petition the Court for a modification of any of the terms of the [Original] [I]njunction that they believe might limit their ability to participate in any legal gaming activity for which they have qualified under Texas law.’ ’’ Judge Cardone also held that the tribe’s sweepstakes are not national third-party vendor sweepstakes such as those permitted under the modified injunction. The current sweepstakes are prohibited conduct, mean- ing the defendants are in contempt of the modified injunction, the judge added. Lotteries Judge Cardone said that because she found the defen- dants in contempt for operating tribal sweepstakes without approval, she need not reach the issue of whether the current sweepstakes are prohibited lotteries under Texas law. But because the court provided the defendants with the opportunity to submit to the court a detailed sweepstakes proposal, Judge Cardone noted that the current sweepstakes may potentially fall within the provisions of the Sweepstakes Act. As such, in any proposal submitted to the court, the defendants must address whether provisions of the Sweepstakes Act apply to the gaming operations submitted in the pro- posal, she added. Any response the state makes should address the law that separates a legal promotional sweepstakes from a prohibited lottery under state law and how any pro- posal by the defendants does or does not comply with that state law, Judge Cardone said. To date, evidence Vol. 1, #1 March 2015 MEALEY’S Native American Law Report 8
  • 9. submitted by the state has fallen short of the standard required, she added. William T. Deane of the Office of the Attorney General in Austin, Texas, represents Texas. Justin J. Solimon and Randolph Barnhouse of Luebben Johnson Barn- house in Albuquerque, N.M., and Richard Andrew Bonner of Kemp Smith in El Paso represent the defendants. (Additional documents available: Contempt brief. Document #96-150325-036B. Blue Stone opposi- tion brief. Document #96-150325-037B. Pueblo opposition brief. Document #96-150325-038B.) I Tribal Officers Claim Sovereign Immunity In Michigan Casino Dispute GRAND RAPIDS, Mich. — Claims by the State of Michigan that Indian tribal officers violated a 1993 compact with the state by seeking to expand casino gambling operations outside the tribe’s reservation should be dismissed because the ‘‘tribal officers re- main cloaked in the sovereign immunity of the Tribe itself,’’ the officers argue in a March 20 brief filed in Michigan federal court (State of Michigan v. Aaron Payment, et al., No. 1:12-cv-962, W.D. Mich.). (Brief in support of motion to dismiss available. Document #96-150325-061B.) Land Trusts The Sault Ste. Marie Tribe of Chippewa Indians oper- ates five casinos on Indian lands in the Upper Peninsula of Michigan pursuant to a class III gaming compact between the state and the tribe entered into under the Indian Gaming Regulatory Act (IGRA). In 2012, Michigan sued the tribe and 13 tribal officers in the U.S. District Court for the Western District of Michigan, alleging that the tribe’s submission to the Department of the Interior to have nontribal land taken into trust pursuant to the Michigan Indian Land Claims Settlement Act (MILCSA) violated the gaming compact with the state. The court dismissed all claims against the individual defendants without prejudice but entered a preliminary injunction against the tribe barring it from filing its trust submission. The Sixth Circuit U.S. Court of Appeals reversed and dissolved the injunction, finding that the District Court lacked jurisdiction based on sovereign immunity. The Sixth Circuit also said that the issue of whether casino gambling on nontribal land violates the IGRA compact if the tribe’s trust submission is successful ‘‘is not ripe for adjudication because it depends on contingent future events that may never occur.’’ After the District Court dismissed the action, the tribe in June 2014 filed two applications with the Depart- ment of the Interior to have two properties taken into trust to operate casinos on the land. In response, the state on Feb. 3 filed an amended complaint, again alle- ging breach of contract/compact claims but naming only the tribal officers as defendants. The named defen- dants are Aaron Payment, Lana Causely, Cathy Abram- son, Keith Massaway, Dennis McKelvie, Jennifer McLeod, Debra Ann Pine, D.J. Malloy, Catherine Hollowell, Darcy Marrow, Denise Chase, Bridget Sor- enson and Joan Anderson. (Amended complaint available. Document #96- 150325-062C.) Sovereign Immunity The defendants, again arguing that the action should be dismissed because the claims are barred by sovereign immunity, say that the District Court ‘‘should reject the State’s naked effort to make an end-run around IGRA and the Sixth Circuit’s decision.’’ ‘‘The Tribe itself, of course, is immune from suit at this time, as the Sixth Circuit held and as this Court recognized in dismissing all claims against the Tribe. The State may not circumvent the Tribe’s immunity by changing the caption of its complaint to sue tribal officers for the same alleged breach of compact,’’ the defendants say. Also, the defendants argue, the action should be dis- missed because the tribe itself is a party to the allega- tions but is immune to the claims. ‘‘The core allegation underlying each of the State’s four claims is that the Tribe’s MILCSA submissions breached the gaming compact between two parties, MEALEY’S Native American Law Report Vol. 1, #1 March 2015 9
  • 10. the State and the Tribe. It is a matter of both law and common sense that such a compact dispute cannot properly be litigated when one contractual party (the Tribe) is not present in the case because it is immune,’’ the defendants say. ‘‘The complaint should thus be dismissed for failure to join a necessary party.’’ The suit also should be dismissed ‘‘under simple and black-letter rules of contract and tort law’’ for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the defendants say. Counsel The defendants are represented by Seth P. Waxman, Danielle Spinelli, Kelly P. Dunbar and Matthew Guarnieri of Wilmer Cutler Pickering Hale and Dorr in Washington, D.C., and R. John Wernet Jr. of Sault Ste. Marie Tribe of Chippewa Indians in Sault Ste. Marie, Mich. The state is represented by Assistant Attorneys General Kelly Drake and Nate Gambill and Special Assistant Attorney General Louis B. Reinwasser of the Michigan DepartmentofAttorneyGeneral,Environment,Natural Resources and Agriculture Division, in Lansing, Mich. I California Federal Judge: Water Right Reserved, But Land Act Extinguished Claim RIVERSIDE, Calif. — A federal judge in California on March 20 granted partial summary judgment in favor of the Agua Caliente Band of Cahuilla Indians and the United States’ claim that the government implicitly reserved appurtenant water sources, including under- lying groundwater, when it created the tribe’s reserva- tion, but granted the defendants partial summary judgment on the tribe’s aboriginal title claims, saying a land act effectively extinguished any such right (Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water District, et al., No. 13-883, C.D. Calif.). (Opinion in Section D. Document #96-150325- 063Z.) Water Rights The Agua Caliente Band of Cahuilla Indians have lived in the Coachella Valley, which sits to the east of the San Jacinto Mountains in southern California, since before American or European settlers arrived in the area now known as California. The tribe has used surface water and groundwater resources there for ‘‘cultural, domestic and agricultural subsistence purposes.’’ In May 1876, President Ulysses S. Grant established the tribe’s reservation in an executive order. The reser- vation was expanded by President Rutherford B. Hayes in September 1877. The United States, pursuant to statute, holds the lands of the reservation in trust for the tribe. In May 2013, the Agua Caliente sued the Coachella Valley Water District (CVWD) and the Desert Water Agency (DWA) in the U.S. District Court for the Cen- tral District of California, seeking a declaration that their federal reserved water rights, which arise under the doctrine of Winters v. United States (207 U.S. 564 [1908]) extend to groundwater. The Agua Caliente claim that the ‘‘establishment of the Reservation pur- suant to federal law impliedly reserved to the Tribe and its members the right to surface water and groundwater sufficient to accomplish the purposes of the reservation, including establishing a homeland for the Tribe and its members.’’ The Agua Caliente contends that those reserved rights ‘‘are the most senior’’ in the region, and, as such, the Ague Caliente may prevent CVWD and DWA from adversely affecting the quantity and quality of their water. In June 2014, the court granted the United States’ motion to intervene as a plaintiff in its capacity for the tribe’s reservation. The United States’ complaint in intervention asserts claims materially similar to the tribe’s complaint regarding the claim for a declaration of federally reserved water rights, but it does not, how- ever, assert a claim regarding aboriginal water rights. Phase I The parties agreed to trifurcate the action into three phases. Phase I seeks to resolve the primarily legal ques- tions regarding the existence of the Agua Caliente’s federal reserved rights to groundwater under the Win- ters doctrine and the tribe’s aboriginal rights to ground- water. Phase II, contingent to an extent on Phase I’s resolution, seeks to address the ownership of certain ‘‘pore space’’ beneath the reservation, the legal question of whether a right to quantity of groundwater encom- passes a right to water of a certain quality and some of Vol. 1, #1 March 2015 MEALEY’S Native American Law Report 10
  • 11. the equitable defenses asserted by the CVWD and DWA. In Phase III, if necessary, the court will under- take the fact-intensive task of quantifying the Agua Caliente’s rights to groundwater and pore space and crafting appropriate injunctive relief. All four parties moved for summary judgment pertain- ing to Phase I. The Agua Caliente argued that federal law recognizes the tribe’s reserved right to groundwater and that it also holds aboriginal title to land in the Coachella Valley to which groundwater rights attach. The United States’ motion echoes the tribe’s Winters rights argument and emphasizes the supremacy of fed- eral water rights over those created by state law but does not claim tribal aboriginal title on the Agua Caliente’s behalf. CVWD argued that Congress extinguished any abori- ginal groundwater rights and that Winters rights impli- citly reserved for the tribe do not extend to groundwater, and even if they do extend to groundwater, the purposes of the Agua Caliente’s reservation will not ‘‘entirely fail’’ without a reserved right to groundwater. DWA’s motion parallels CVWD’s motion. Reserved Rights Judge Jesus G. Bernal held that the tribe’s federal reserved water rights may include groundwater, but its aboriginal right of occupancy was extinguished long ago, such that the tribe has no derivative right to groundwater. ‘‘For over a century, the Supreme Court has held that when the United States ‘withdraws its land from the public domain and reserves it for a federal purpose, the Government, by implication, reserves appurtenant water then unappropriated to the extent needed to accomplish the purposes of the reservation,’ ’’ Judge Bernal said, citing Cappaert v. United States (426 U.S. 128, 138 [1976]). ‘‘Impliedly reserved water rights ‘vest[] on the date of the reservation and [are] superior to the rights of future appropriators,’ ’’ the judge added. ‘‘Winters rights arise under federal law, and are thus an exception to the normal rule that assigns water resources regulations to the states.’’ ‘‘The federal government intended to reserve water for the Tribe’s use on its reservation,’’ Judge Bernal said. ‘‘Rights to the groundwater underlying the reservation are appurtenant to the reservation itself. Accordingly, the Court concludes the federal government impliedly reserved groundwater, as well as surface water, for the Agua Caliente when it created the reservation. Whether groundwater resources are necessary to fulfill the re- servation’s purpose, however, is a question that must be addressed in a later phase of this litigation.’’ Judge Bernal held that the tribe and the United States were entitled to partial summary judgment on the Phase I issue of whether the tribe’s federally reserved water rights encompass groundwater underlying the reservation. Aboriginal Right The tribe also asserted an aboriginal right to use groundwater beneath the Coachella Valley, with a priority date of time immemorial. The tribe argued that federal law recognizes certain rights connected to original Indian occupancy lands and that lands en- compassed by the Treaty of Guadalupe Hidalgo fall under the original occupancy doctrine. Further, the tribe contends that is has continuously and exclusively occupied the Coachella Valley, which was ceded as part of the Treaty of Guadalupe Hidalgo, so it possesses an aboriginal right to groundwater underlying its reservation. The defendants countered that Congress, via the Land Claims Act of 1851 statute, required the presentation of land claims in California to a commission for vali- dation and that the tribe did not assert such a claim, so the land the tribe occupied in the Coachella Valley reverted to public domain. As such, the tribe’s claim to an aboriginal occupancy fails, the defendants said. Judge Bernal agreed with the defendants, saying the tribe admitted that no claim was filed on its behalf as part of the claims process under the act. As such, like the Indians in all other cases interpreting the act, the Agua Caliente’s aboriginal claim was effectively extin- guished after the two-year claims window closed, and its territory subsumed within the public domain, the judge added. Judge Bernal granted partial summary judgment to the defendants regarding the tribe’s aboriginal title claim. He then certified the order for interlocutory appeal, should the parties seek review. MEALEY’S Native American Law Report Vol. 1, #1 March 2015 11
  • 12. Attorneys Emil W. Herich and Catherine F. Munson of Kilpa- trick Townsend and Stockton in Beverly Hills, Calif., David J. Masutani of AlvaradoSmith in Los Angeles, Heather Whiteman Runs Him and Steven C. Moore of Native American Rights Fund in Boulder, Colo., and Mark H. Reeves of Kilpatrick Townsend and Stockton in Augusta, Ga., represent the Agua Caliente. Daron T. Carreiro, F. Patrick Barry and Yosef M. Negose of the U.S. Department of Justice in Washington, D.C., represent the United States. Steven B. Abbott, Gerald D. Shoaf and Julianna K. Strong of Redwine Sherrill in Riverside represent the CVWD. Roderick E. Walston and Gene Tanaka of Best Best and Krieger in Walnut Creek, Calif., Ste- ven George Martin of Best Best in San Diego and Arthur L. Littleworth and Piero C. Dallarda of Best Best in Riverside represent DWA. (Additional documents available: Coachella summary judgment brief. Document #96-150325-064B. Uni- ted States summary judgment brief. 96-150325- 065B. Desert Water agency summary judgment brief. Document #96-150325-066B. Agua Caliente summary judgment brief. Document #96-150325- 067B.) I Nevada Federal Judge Dismisses 1 Count In Challenge To Water Pipeline Approval LAS VEGAS — A Nevada federal judge on Feb. 24 dismissed one count of a consolidated action brought against the federal government for its approval of a southern Nevada water pipeline project (Center for Biological Diversity v. United States Bureau of Land Management, et al., No. 14-226, White Pine County, et al. v. United States Bureau of Land Management, et al., No. 14-228, D. Nev.; 2015 U.S. Dist. LEXIS 2355). (Opinion available. Document #95-150312-009Z.) The federal government granted a right of way to the Southern Nevada Water Authority to construct a pipe- line to carry groundwater from other parts of Nevada to Clark County, Nev. Two separate lawsuits challenging the government’s authority were filed in the U.S. District Court for the District of Nevada by the Center for Biological Diversity and by White Pine County and 11 other plaintiffs including Native American tribes, water authorities, environmental and advocacy groups. The cases were consolidated. The United States moved to dismiss parts of one com- plaint. Judge Andrew P. Gordon erroneously denied the motion as moot but then reinstated it and ruled on it. Native American, Water Rights The federal government moved to dismiss on three grounds. First, it said that one count relies on the Amer- ican Indian Religious Freedom Act, which it says gives no judicially enforceable rights. Second, the federal government said it does not owe any enhanced trust duties to a Native American tribe under the Federal Land Policy and Management Act (FLPMA), the National Environmental Policy Act (MEPA) or the National Historic Preservation Act (NHPA). It argued thatcompliancewiththestatutesfulfillsthegovernment’s obligations. Finally, the federal government said there is no law im- posing on it a trust duty to manage or mitigate adverse effects on a tribe’s reserved water rights. Plaintiffs Clarify Claims In response, the plaintiffs said they do not assert a claim under the American Indian Religious Freedom Act or on reserved water rights. Instead, the plaintiffs said they are claiming that the federal government’s failure to consider the tribes’ religious and ceremonial practices and reserved water rights violated the National Environmental Policy Act. They said they are not asserting a claim for an in- dependent breach of fiduciary duty. They said they are alleging that under the Federal Land Policy and Management Act, the National Environmental Policy Act or the National Historic Preservation Act, the gov- ernment must fulfill its statutory duties with special consideration for the tribes’ interests. Judge Gordon said that since the plaintiffs clarified they are not asserting independent claims under the Amer- ican Indian Religious Freedom Act or for reserved water rights, he denied the motion to dismiss those counts. Vol. 1, #1 March 2015 MEALEY’S Native American Law Report 12
  • 13. No Enhanced Obligations With respect to enhanced trust obligations, Judge Gordon said the government acts not as a private trus- tee but as a sovereign interest. ‘‘[T]he federal govern- ment’s compliance with the FLPMA, NEPA, AND NHPA satisfies its general trust obligations to Indian tribes,’’ the judge held. The plaintiffs argued that there is an open question about whether the federal government has to take spe- cial consideration of tribal interests when complying with applicable statutes and regulations. ‘‘Yet, the pre- vailing rule of law remains that the federal government’s trust obligation is satisfied by compliance with general statutes and regulations not aimed at protecting Indian tribes unless some statute or regulation imposes upon the government a specific duty with respect to Indians,’’ the judge wrote. The judge said ‘‘the complaint does not identify any specific duty the Treaty [Treaty of Peace and Friend- ship with the Goshute Shoshone Indians in 1863] or any related statute or regulation imposes on the federal government.’’ He said the applicable count in the com- plaint seeks to impose enhanced statutory duties on the government beyond what the FLPMA, NEPA and NHPA already require. Counsel The Center for Biological Diversity is represented by Marc D. Fink of Duluth, Minn., and Julie Cavanaugh- Bill of the Cavanaugh-Bill Law Offices in Elko, Nev. The United States is represented by Maureen E. Rudolph of the U.S. Justice Department in Washing- ton, D.C., and Luther L. Jajek of the Justice Depart- ment in Denver. White Pine County and other defendants are repre- sented by White Pine County District Attorney Kelly C. Brown of the District Attorney’s Office in Ely, Nev., and Simeon M. Herskovitz of Advocates for Commu- nity and Environment in El Prado, N.M. I Crow Water Allottees Lack Standing For Legal Defense, Indian Affairs Says BILLINGS, Mont. — The U.S. government on Feb. 25 asked a Montana federal court to enter judgment against water rights allottees of the Crow Native Amer- ican tribe, arguing that the court lacks jurisdiction and that there is no obligation by the government to provide the plaintiffs with legal representation (Crow Allottees Association, et al. v. United States Bureau of Indian Affairs, No. 14-62, D. Mont., Billings Div.). (Brief available. Document #95-150312-016B.) In May, the Crow Allottees Association and 35 indivi- dual members sued the U.S. Bureau of Indian Affairs (BIA) and the judges of the Montana Water Court in the U.S. District Court for the District of Montana. The plaintiffs want the BIA to provide them with legal representation under terms of the Crow Tribal Com- pact, which provides them with reserved water rights on the Crow reservation in Montana. The plaintiffs say their water rights have been recog- nized in subsequent legislation and agreements, includ- ing the Crow Act of 1920, the 1999 Crow Compact and the Crow Tribal Water Rights Settlement of 2010. The Crow Allottees say the most recent compact requires the Crow tribe to develop a water code within two years but does not specify protection of the allot- tees’ rights. They say that since their rights are not being distinguished from other rights, they cannot be ade- quately represented by the Tribal Administration and want the BIA to provide them with legal representation. Stay Pending Dismissal Motion The complaint alleges that the BIA is in breach of its fiduciary duties and that the allottees are being denied due process by not being represented in the process of developing a tribal water code. Water Court Judges Russell McElyea and Douglas Ritter have moved to dismiss the claims against them. On Feb. 4, the parties said they agreed to stay proceed- ings in the case so the court can hear the BIA’s motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). They said the outcome of the dispositive motion may affect the need for discovery. On Feb. 6, Judge Susan P. Watters stayed discovery and ordered briefing on the BIA’s dismissal motion. Underlying Case Must Conclude In its Feb. 25 motion for judgment, the BIA says the plaintiffs have not pleaded any injury that establishes MEALEY’S Native American Law Report Vol. 1, #1 March 2015 13
  • 14. their standing. It says the U.S. Interior Department’s waiver of the allottees’ claims will not be effective until the Water Court proceedings are resolved. The BIA says that once the waiver becomes effective, the allottees will receive ‘‘substitute resources equal to or greater than the value of the waived claims.’’ ‘‘To claim any injury now is speculative and cannot establish standing,’’ the government says. The BIA says the allottees have not identified any waiver of sovereign immunity by the federal govern- ment. It says that to invoke the federal Administrative Procedure Act, a plaintiff must challenge a final agency action or a failure to perform an enforceable legal duty. ‘‘The Plaintiffs have done neither here,’’ the agency says. No Duty To Defend Finally, the BIA says the allottees fail to state a claim because they do not allege any violation of law. It says the allottees claims violations of a federal duty to pro- vide independent counsel but says none of the cited laws creates such a duty. The allottees are represented by Hertha L. Lund of Lund Law in Bozeman, Mont. The BIA is represented by John C. Cruden and Ty Bair of the U.S. Justice Department in Washington, D.C. The Water Court is represented by Jeffrey M. Doud of the Montana Attorney General’s Office in Helena, Mont. I Natural Resources Committee Outlines Process For Water Rights Settlements WASHINGTON, D.C. — Rob Bishop, chairman of the U.S. House of Representatives Committee on Natural Resources, sent a letter dated Feb. 26 to Attor- ney General Eric Holder and Sally Jewell, secretary of the Interior, outlining the process the committee intends to follow when considering future Indian water rights settlements. (Letter available. Document #96-150325-025X.) The House Natural Resources Committee has primary authorizing jurisdiction over the legislative resolution of Indian water rights claims within the House of Representatives. The United States has a longstanding policy that disputes regarding Indian water rights should be resolved through negotiated settlement rather than through litigation, and the Department of Justice and Department of the Interior play key roles in negotiating and developing settlements regarding the claims before they are considered by Congress, Bishop says in the letter. The executive branch is charged with implementing existing Indian water rights settlement criteria and procedures designed to meet the goal of implementing the settlements, Bishop says. If crafted correctly, the settlements can provide relief to the United States from burdensome legal obligations that benefit all American taxpayers, Bishop says. The letter outlines the process the committee intends to follow when considering future Indiana water rights settlements and to inform the attorney general and secretary of the assistance the committee will need from them and their designees. As part of the process, Bishop says that the departments ‘‘must convey support for and forward the settlements and the proposed authorizing legislation, specifically including federal spending levels, before any Commit- tee consideration takes place.’’ Outline Of Actions Also, the committee has outlined the following pro- cesses it intends to follow when considering future Indian water right settlements: Holder and Jewell ‘‘will provide a statement to the Committee affirming that each proposed settlement resolution transmitted by your Department will adhere to the current criteria and procedures.’’ The departments are to ‘‘specifically affirm to the Committee that a settlement meets Criteria 4 and 5(a) and (b) [as included in the Federal Reg- ister] to ensure that the American taxpayer is deriving benefits from any such settlement prior to Committee consideration. Related to such a determination, both Departments will be expected to affirm that a particular settlement represents a net benefit to the American taxpayer as compared to the consequences and costs of not settling Vol. 1, #1 March 2015 MEALEY’S Native American Law Report 14
  • 15. litigation, and specifically support the federal fin- ancial authorization included in the proposed legislative text.’’ ‘‘For settlement legislation to be considered, the Attorney General or his/her designee must have conveyed to a court and all settling parties have agreed, in writing, to the settlement pending a leg- islative resolution before it is forwarded to the Committee for it to be considered.’’ ‘‘Both Departments and the settling parties must have approved, in writing, the legislative text needed to codify the settlement before it is trans- mitted to the Committee and have provided that proposed text to the relevant court.’’ ‘‘Based on precedent, the Committee requests that the Department of Justice consent to being available to testify if any legislative text is considered by the Committee related to such proposals.’’ ‘‘Both Departments must list the legal claims being settled in any document transmitting legislative text.’’ ‘‘Such settlements and proposed legislation shall not include financial authorizations for claims already settlement by Congress or claims that have no legal basis.’’ I Government Asks Judge To Dismiss Indian Tribe’s ACA Employer Mandate Challenge CHEYENNE, Wyo. — An Indian tribe waived its objections to the Patient Protection and Affordable Care Act (ACA)’s large employer mandate by not rais- ing them during the rulemaking process, and its action runs afoul of the Anti-Injunction Act’s (AIA) bar on tax challenges taxes, the government told a federal judge on March 19 (Northern Arapaho Tribe, et al. v. Sylvia Burwell, et al., No. 14-247, D. Wyo.; 2015 U.S. Dist. LEXIS 30480). (Memo available. Document #93-150325-017B.) The Northern Arapaho Tribe sued the U.S. Depart- ment of Health and Human Services, Sylvia Burwell, secretary of the Health and Human Services, the U.S. Department of Treasury and Jacob Lew, secretary of the Department of Treasury, seeking an exemption from the ACA’s large-employer mandate. Northern Arapaho Tribe operates several businesses, including a casino, convenience store, gas station and grocery store. The ACA defines employers with more than 50 full-time employees as large employers and requires them to provide health insurance plans or face ‘‘assessable payment’’ tax. Northern Arapaho employs more than 900 people. Employer Mandate The Northern Arapaho Tribe discovered after the ACA’s passage that its employees could find more affordable insurance through the federal exchange and offered to pay up to 80 percent of the employees’ costs in obtaining insurance through the exchange. In January 2015, the ACA’s large employer mandate became effective. The tribe filed suit, arguing that any insurance coverage it offered employees would be inferior to that which they could obtain through the exchange. The challenged regulations are at 26 Code of Federal Regulations Sections 54.4980H-1, 301.6045-1 and 1.6055-1. The tribe moved for a preliminary injunction, which was denied in February. Anti-Injunction The government then moved for dismissal, arguing that as Judge Scott W. Skavdahl found in denying the tribe an injunction, the AIA bar on lawsuits involving taxes forecloses on the suit. Section 4940H repeatedly uses the term ‘‘tax,’’ the government argues. The U.S. Supreme Court has repeatedly made this bar clear, the government argues. The concurring opinion in Hobby Lobby Stores Inc. v. Sebelius (723 F.3d 1144 [10th Cir. 2013]) finding that the AIA was nonjurisdic- tional did not ‘‘disturb settled circuit law on this point’’ and is not binding on the court because it was joined by only three of the eight justices, the government argues. ACA Purpose Further, the tribe has not stated a claim on which relief can be granted, the government argues. The tribe waived its challenge by not raising the issues it now complains of during the notice-and-comment period of the rulemaking process, the government argues. MEALEY’S Native American Law Report Vol. 1, #1 March 2015 15
  • 16. Additionally, the regulations are ‘‘consistent with the language, structure and purpose of the ACA,’’ the gov- ernment argues. Section 4980H applies to all large employers, including governments, the government argues. Section 4980H’s purpose was to help employers provide adequate insurance coverage, and there is no reason to assume that Congress wanted to exclude Indian tribes from that goal, the government argues. Had it wanted to do so, Congress was more than cap- able of excluding Indian tribes from the mandate, the government argues. Andrew W. Baldwin, Janet E. Millard, Kelly A. Rudd, Mandi Anne Vuinovich and Berthenia S. Crocker of Baldwin, Crocker Rudd in Lander, Wyo., represent the tribe. Benjamin C. Mizer, Sheila M. Lieber, Alice S. LaCou, Christopher A. Crofts, Nicholas Vassallo and Jacek Pruski of the U.S. Department of Justice in Washington, D.C., represent the government. I Plan Participant Need Not Exhaust Tribal Remedies Under ERISA, Judge Rules KANSAS CITY, Kan. — A participant in a nongovern- mental health need not exhaust tribal remedies prior to bringing a claim for recovery of health benefits under the Employee Retirement Income Security Act, a fed- eral judge in Kansas ruled March 13 (Amy Coppe v. The Sac Fox Casino Healthcare Plan, et al., No. 14- 2598, D. Kan.; 2015 U.S. Dist. LEXIS 30992). (Memorandum and order available. Document #54- 150408-022Z.) Amy Coppe, a participant in the Sac Fox Casino Healthcare Plan, sued the plan and Benefit Manage- ment Inc., the plan’s third-party administrator, (collec- tively, the plan) asserting that the defendants wrongfully denied her claim for medical benefits under ERISA Section 502(a)(1)(B). The plan moved to dismiss or for a stay for failure to ex- haust tribal remedies. The plan asserted that the casino is a noncorporate operating arm of the Sac and Fox Nation of Missouri, a federally recognized Indian tribe, that the money to fund the plan came from the casino’s general operating expenses, that the plan was managed by the tribe’s council members and that a judgment against the plan would likely come di- rectly from the tribal treasury or the casino’s general operating fund. ‘Preemptive Intent’ In ruling that tribal courts do not have jurisdiction over ERISA actions, U.S. Judge Richard D. Rogers of the District of Kansas initially noted that the plan did not allege that it is a ‘‘governmental plan’’ within the mean- ing of ERISA Section 3(32). Judge Rogers then concluded that ‘‘tribal rights to make laws governing members and to regulate activity upon the reservation does not exclude federal authority as expressed in ERISA to occupy and preempt the field of ERISA rights enforcement for nongovernmental plans.’’ The judge noted that ‘‘if an ERISA claim was brought in tribal court against a nonmember defen- dant or if an ERISA claim against a nongovernmental ERISA plan had to be brought first in tribal court, . . . [t]he power of an ERISA defendant to remove the action to federal court, as exists for state court ERISA defendants, would not be present. And, the right of an ERISA plaintiff to choose a federal forum at the outset of an action would be infringed.’’ This conclusion is true even as to members of a tribe because of ‘‘the preemptive intent of Congress in pas- sing ERISA,’’ the judge said. Access To Federal Courts Judge Rogers also rejected the plan’s argument that ERISA does not provide for federal preemption of ben- efit claims under Section 502(a)(1)(B) because state courts have concurrent jurisdiction over such claims. ‘‘The key point is that access to a federal forum must be allowed to ERISA defendants and plaintiffs and that such access via removal would be denied to ERISA defendants if tribal courts had jurisdiction to decide ERISA claims, and such access for ERISA plaintiffs would be denied or at least infringed if cases were forced to be brought initially in tribal court,’’ the judge said. Because the court held that the tribal court lacks jur- isdiction, the judge said that he did not need to con- sider exhaustion of tribal court remedies as a matter of comity. Vol. 1, #1 March 2015 MEALEY’S Native American Law Report 16
  • 17. Coppe is represented by Dean Nash and Brian Fran- ciskato in Kansas City, Mo. The plan is represented by Christopher C. Halbert of Halbert, Dunn Hal- bert in Hiawatha, Kan., and Joseph V. Messineo of Fredericks Peebles Morgan in Omaha, Neb. I Breach Claim Dismissed; Reimbursement Claim Continues In Funding Dispute PHOENIX — A federal judge in Arizona on March 6 dismissed a breach-of-trust claim from a dispute over the funding for contract health care services the Gila River Indian Community provided to members of the Tohono O’odham Reservation but allowed a claim for reimbursement to continue (Gila River Indian Com- munity v. Sylvia Matthews Burwell, et al., No. 14-943, D. Ariz.; 2015 U.S. Dist. LEXIS 27595). (Opinion available. Document #96-150325-031Z.) Final Offer Rejected Gila River Indian Community is a federally recognized Indian tribe. Until 1995, Indian Health Services (IHS) provided health care for community members and operated a hospital in Sacaton, Ariz. The community then entered into a self-governance contract with IHS pursuant to the Indian Self-Determination and Educa- tion Assistance Act (ISDEAA). The contract allowed the community to take control of its health care services and the hospital, with the support of federal funds. In 2002, the community entered into a self-governance ‘‘compact’’ with IHS pursuant to ISDEAA amend- ments that Congress had passed. The compact granted the community greater autonomy in providing health care services. Since the community assumed control of its health care services, members of the Tohono O’odham Reser- vation have received care at the community’s hospital. as well as contract health care services paid by the community. The funding agreements — which were entered into annually by the community and IHS under the self-governance contract and compact — never specifically identified funding for the contract health care services for Tohono O’odham members. In 2013, the community requested and IHS agreed to additional funding for contract health care services for Tohono O’odham members. For the 2014 funding agreement, the community again requested additional funding for the services, but IHS declined the request and also declined to delineate what portions of the 2014 funding agreement were allocated to health care services for Tohono O’odham members. On Nov. 15, 2014, the community sent IHS a ‘‘Final Offer,’’ which contained an amendment to the 2014 funding agreement. The proposed amendment re- quired IHS to delineate what amounts in the funding agreements from 1996 to 2014 were allocated to health care services for Tohono O’odham members. If IHS failed to do this, or evidence showed that the funding had been deficient, the amendment required an addi- tional $963,114 for the 2014 funding agreement and reimbursement for the deficiencies in the previous funding agreements. IHS rejectedthe final offer andthe proposedamendment. Claims Dismissal Sought Further negotiations failed, and the community sued Sylvia Matthews Burwell, secretary of Health and Human Services, and Yvette Roubideaux, acting direc- tor for IHS, in the U.S. District Court for the District of Arizona. In its amended complaint, the community seeks injunctive and declaratory relief for violation of 25 U.S. Code Section 458aaa-6 for failing to approve the amendment to the 2014 funding agreement, vio- lation of 25 U.S. Code Section 458aaa-6 for failing to sever the portions of the amendment that were acceptable to the defendants and for breach of various trust duties owed to the community. The community also claimed that it was entitled to reimbursement for fund spent on health care services for Tohono O’od- ham members. The defendants moved to dismiss the community’s breach-of-trust claim and its request for reimbursement, arguing that the court lacked subject matter jurisdiction over the claims. Other than the reimbursement remedy, the defendants did not ask the court to dismiss the community’s claims for violation of the ISDEAA. Jurisdiction At the outset, Judge David G. Campbell noted that because Burwell and Roubideaux were being sued in their official capacities, sovereign immunity may bar portions of the suit. The ISDEAA does contain a waiver MEALEY’S Native American Law Report Vol. 1, #1 March 2015 17
  • 18. of sovereign immunity. Under the statute, the federal government waives its immunity and grants district courts ‘‘original jurisdiction over any civil action or claim against the appropriate Secretary arising under [the ISDEAA].’’ The statute also grants district courts, subject to the provisions of the Contract Disputes Act (CDA), jurisdiction ‘‘over any civil action or claim against the Secretary for money damages arising under contracts authorized by this subchapter.’’ The waiver of immunity extends to claims arising under self-governance compacts, Judge Campbell said. Under Federal Rule of Civil Procedure (FRCP) 12(b)(1), defendants may move to dismiss a case for lack of subject matter jurisdiction. A FRCP 12(b)(1) jurisdictional attack may be facial or factual, Judge Campbell said. Although the parties’ briefing is difficult to characterize, Judge Campbell said it appears that the defendants have mounted a facial attack on subject matter jurisdiction. Regardless, the central issues are whether the community has pleaded a cognizable breach-of-trust claim and whether its claim for reim- bursement may be asserted only under the CDA, Judge Campbell said. Breach Of Trust The community has not pleaded a viable breach-of- trust claim, so the claim must be dismissed because it does not fall within the limited waiver of sovereign immunity and for failure to state a claim, Judge Camp- bell said. Judge Campbell said he could not accept the commu- nity’s argument that it can sustain a breach-of-trust claim for two reasons. First, United States v. Navajo Nation (547 U.S. 488, 506, S. Ct. 1079 [2003]) makes clear that a mere substantive source of statutory regu- latory duties is not sufficient to give rise to a breach-of- trust claim, Judge Campbell said. The statutes and regulations in this case ‘‘simply do not give the federal government full responsibility to manage Indian resources for the benefit of Indians,’’ Judge Campbell said. ‘‘Nor can the government’s general trust obligations provide the missing elements of Com- munity’s breach-of-trust claim’’ because Navajo makes ‘‘clear that the general trust obligation can ‘reinforce the conclusion that the relevant statute or regulation im- poses fiduciary duties,’’’ but ‘‘it is not sufficient to sup- port that conclusion in the absence of comprehensive statutes and regulations. Thus, the Community’s argu- ment that the general trust relationship is recognized in the ISDEAA or other Indian health care legislation does not enable him to find a cognizable breach-of-trust claim,’’ Judge Campbell said. The judge said he could not conclude ‘‘that the statutes and regulations relied on by the Community show that the United States has accepted trust responsibilities for the healthcare related duties the Community seeks to enforce.’’ Further, ‘‘[t]his case does not involve a traditional cor- pus,’’ Judge Campbell said. ‘‘There is no property or money held in trust by the federal government for the benefit of the Community. THIS case does involve appropriations Congress makes to IHS, part of which are used to fund tribal self-governance compacts for healthcare.’’ ‘‘A congressional appropriation of government funds is qualitatively different from the tribal-owned real prop- erty managed by the government on behalf of Indian tribes,’’ Judge Campbell said. ‘‘The appropriation con- sists of moneys of the United States, and cannot be said to constitute property of the tribes when it has not been set aside in trust as tribal property.’’ Reimbursement Judge Campbell held, however, that the community’s reimbursement claim complies with the statutory requirements asserting a claim under the ISDEAA; therefore, it cannot be dismissed at this stage of the litigation on the ground that it may be brought only under the CDA. The ISDEAA allows an Indian tribe to bring suit in federal court for IHS’s failure to accept a final offer, Judge Campbell said. The community submitted a final offer to defendants, which IHS rejected. The com- munity then filed this lawsuit, claiming that the def- endants improperly rejected the final offer and the proposed amendment, the judge said. The comm- unity’s actions closely track the requirements of the ISDEAA, which states that the community may ‘‘directly proceed to initiate and action in a Federal district court pursuant to section 450m-1(a) of THIS title,’’ the judge added. Linus Everling and Thomas L. Murphy of the Gila River Indian Community in Sacaton, Robert Richard Vol. 1, #1 March 2015 MEALEY’S Native American Law Report 18
  • 19. Yoder of Yoder Langford in Phoenix and Vernle C. Durocher Jr. of Dorsey Whitney in Minneapolis rep- resent the community. Adam Ryan Smart of the U.S. Attorney Office in Phoenix represents the defendants. (Additional documents available: Amended com- plaint. Document #96-150325-032C. Dismissal brief. Document #96-150325-033B. Opposition brief. Document #96-150325-034B.) I New Mexico Federal Judge Declines To Transfer Dispute Over Hospital Funding ALBUQUERQUE, N.M. — A federal judge in New Mexico on Feb. 5 declined to dismiss or transfer a dispute over the pulling of funding for a hospital pro- viding health care services on the Navajo Reservation, saying that although many of the events giving rise to the dispute occurred in Arizona, the court the plaintiffs filed the case in was more convenient for the parties and for obtaining documents (Navajo Health Foundation — Sage Memorial Hospital Inc. v. Sylvia Mathew Burwell, et al., No. 14-958, D. N.M.; 2015 U.S. Dist. LEXIS 19611). (Opinion available. Document #96-150325-010Z.) Hospital Turnaround Navajo Health Foundation — Sage Memorial Hospital Inc. is a private nonprofit corporation that has owned and operated a health care facility in Ganado, Ariz., which lies within the Navajo Reservation, since 1974. The Navajo Nation Council designated Sage Hospital as a ‘‘tribal organization’’ for the purpose of contracting with the U.S. Department of Health and Human Ser- vices (HHS). HHS Secretary Sylvia Mathews Burwell is responsible for conducting all HHS duties, including contracting on behalf of the United States with tribal organizations to provide health care to Native Ameri- cans. The Indian Health Service (IHS) is a division of the HHS that is the principal health care provider for members of federally recognized American Indian tribes. Yvette Roubideaux is IHS’s acting directing and is responsible for contracting with tribal organiza- tions to provide health care to American Indians. John Hubbard Jr. is the area director of the Navajo- area IHS. Frank Dayish is the contracting officer for the Navajo-area IHS. Dayish is responsible for negotia- ting and maintaining IHS’s contracts throughout the Navajo Reservation, including its contract with Sage Hospital. Dayish has the authority to sign Indian Self Determination and Education Assistant Act (ISDEA) contracts and funding agreements with Sage Hospital and to award funds under those agreements. From 1947 to 2007, Sage Hospital’s facilities ‘‘grew increasingly obsolete, and the quality of its healthcare services plummeted.’’ By 2007, Sage Hospital was fight- ing multiple regulatory and financial battles to stay afloat. Sage Hospital worked to turn its operations around, and by September 2009, the hospital received its unconditional Arizona Department of Health Ser- vices license and Centers for Medicare and Medicaid Services certification. The hospital received several other awards. In September 2013, the Arizona Depart- ment of Health Services licensed Sage Hospital through Sept. 30, 2016. In March 2014, the Joint Commission on Accreditation of Health Care Organi- zations granted the hospital ‘‘Critical Access Hospital Accreditation,’’ stating that it did not identify any areas for improvement. The hospital also received an unqualified — or ‘‘clean’’ — audit from its independent auditors every year from 2007 to 2013. Support Pulled Despite the hospital’s accomplishments, IHS failed to provide full contract support to the hospital. In October 2003, the Navajo Nation Council renewed Sage Hospital’s tribal organization status through 2005. In June 2005, the council reaffirmed the hos- pital’s tribal organization status, authorizing Sage Hos- pital to manage and operate contracts through IHS through Sept. 30, 2020. Soon after receiving tribal organization status through Sept. 30, 2020, Sage Hos- pital entered into a contract with IHS that became effective in 2009. The contract was extended through 2013. In an Aug. 22, 2013, letter to IHS, Sage Hospital offered two proposals — to extend IHS’s contract with Sage Hospital through Sept. 30, 2016, and to approve an annual funding agreement for the 2014 fiscal year with no material changes in Sage Hospital’s budget, services or programs for the 2013 fiscal year. IHS did not accept either of the proposals but in- stead chose to fund Sage Hospital on a monthly basis while conducting a performance monitoring review and forensic audit. IHS conducted the review, and Moss MEALEY’S Native American Law Report Vol. 1, #1 March 2015 19
  • 20. Adams LLP, an independent accounting firm, con- ducted the audit. Sage Hospital contends that it was supposed to be provided draft reports for review so it could correct errors and discuss any adverse findings before IHS finalized the report. The hospital said, how- ever, that it never received any documents, despite ask- ing for the draft reports. In September 2014, IHS informed Sage Hospital that it would not renew the hospital’s contract. The declina- tion stated that Sage Hospital’s board of directors was misusing government funding and providing inade- quate care to patients. Sage Hospital demanded that IHS rescind the declination, but IHS did not. After issuing the declination, IHS told Sage Hospital’s supplier — without notifying Sage Hospital — to immediately stop delivering pharmaceuticals to the hospital. IHS also informed the public through media advisories that IHS would be changing how it provided health care services to beneficiaries in the Granado Ser- vice area who were formerly served by Sage Memorial because IHS was no longer funding the hospital. Dismissal, Transfer Sought In October 2014, Sage Hospital sued Burwell, Roudbideaux, Hubbard and Dayish in the U.S. District Court for the District of New Mexico, contending that IHS’s declination of its contract proposal violated 25 U.S. Code Section 450f(b)(2) and 25 Code Federal Regulation Sections 900.32 and 900.33 and that IHS’s declination of the contract proposal for fiscal year 2015 — to the extent that it was substantially the same as the fiscal year 2014 proposal — violated 25 U.S. Code Section 450f(b)(2) and 25 Code Federal Regulation Sections 900.32 and 900.33. Sage Hospital sought immediate injunctive relief and said that be- cause it is entitled to immediate injunctive relief to reverse the declination and to compel Burwell to award and fund the three-year contract proposal it submitted, the defendants are required to pay the hospital the full amount requested in the fiscal year 2014 additional funding agreement. Sage Hospital also said IHS violated 41 U.S. Code Section 7103(f)(3). In November, the defendants asked the court to dis- miss the case for improper venue under Federal Rule of Civil Procedure 12(b)(3) or to transfer the case to the U.S. District Court for the District of Arizona under 28 U.S. Code Section 1401(a). Transfer Denied Judge James O. Browning denied the defendants’ motion to dismiss, finding that the District of New Mexico is a proper venue for the case pursuant to Section 1391(e)(1)(A) because Dayish is domiciled in New Mexico. The District of New Mexico, however, is not a proper venue for the case under Section 1391(e)(1)(B) because a ‘‘substantial part of the events or omissions giving rise to the claim’’ did not occur in New Mexico, the judge added. However, the judge declined to transfer the case, saying Sage Hospital filed the suit in the District of New Mexico and the court is a more convenient forum for the witnesses, the parties and for obtaining the relevant documents than the District of Arizona. Paul E. Frye of Frye Law Firm in Albuquerque rep- resents Sage Hospital. Angela M. Belgrove and Paula R. Lee of the U.S. Department of Health and Human Services in San Francisco and Karen Grohman of the U.S. Attorney’s Office in Albuquerque represent the defendants. (Additional documents available: Complaint. Docu- ment #96-150325-011C. Dismissal brief. Document #96-150325-012B. Opposition brief. Document #96-150325-013B. Reply brief. Document #96- 150325-014B.) I Our Copyright Policy Subscribers are encouraged to copy sections of this report for use in court submissions. You also are welcome to copy a single article to send to a client or colleague, and to copy and route our table of contents. However, it is a violation of our copyright to copy substantial portions of this report for any other reasons without permission. Illegal copying can seriously undermine subscription-based publications like ours; moreover, the Copyright Act of 1976 provides for damages for illegal copying. If you wish to copy and distribute sections of the report, simply contact MealeyInfo@LexisNexis.com. Vol. 1, #1 March 2015 MEALEY’S Native American Law Report 20
  • 21. Tribe Members’ Class Claims For Compensation Filed Too Late, Judge Finds SIOUX FALLS, S.D. — Class claims filed by four members of the Cheyenne River Sioux Tribe alleging that the United States violated its trust and fiduciary duties by taking their land without just compensation are barred by the statute of limitations and because there is no waiver of sovereign immunity, a South Dakota federal judge ruled Feb. 26 in granting the government’s motion to dismiss the claims (Casimir L. Lebeau, et al. v. United States of America, No. 14- 4056, D. S.D.; 2015 U.S. Dist. LEXIS 23093). (Decision available. Document #96-150325-054Z.) Oahe Dam Project Sioux Tribe members Casimir L. Lebeau, Clarence Moretenson, Raymond Charles Handboy Sr. and Fred- die Lebeau filed a class complaint April 11, 2014, against the United States of America in the U.S. District Court for the District of South Dakota, alleging claims for breach of trust, breach of fiduciary duty and accounting. The plaintiffs owned land that was taken by the United States in the 1940s for the Oahe Dam project on the Missouri River. Construction of the dam flooded 370,000 acres in North Dakota and South Dakota, including 104,420 acres in the Cheyenne River Sioux Indian Reservation. About half of that land was owned by the Cheyenne River Sioux Tribe, and the other half was owned by individual members of the tribe. More than 180 tribal families were forced to leave their homes because of the dam. In 1954, Congress passed an act to provide compen- sation to the tribe and individual landowners for the taking of their land. In 2000, Congress passed the Cheyenne River Sioux Tribe Equitable Compensation Act (CRSTECA), which recognized that the 1954 act did not provide adequate compensation to the tribe for the land flooded by the dam. The CRSTECA appropriated money for a trust fund that provided addi- tional compensation to the tribe. The plaintiffs assert that the taking of their land without proper compensation violates the trust and fiduciary duties the United States owed to them and to all other individual landowners whose land was taken. They also allege that their claims fall under the Indian Trust Accounting Statute and that a constructive trust exists with respect to the money that would provide just compensation for the taking of their land. The plaintiffs also assert that they are entitled to an accounting. ‘Sympathetic Claims’ On July 14, the United States moved to dismiss the complaint for lack of jurisdiction and failure to state a claim. The plaintiffs filed their opposition to the motion on Sept. 8. (Memorandum in support of motion to dismiss available. Document #96-150325-055B. Opposition memorandum available. Document #96-150325- 056B.) Judge Karen E. Schreier reluctantly granted the motion, finding that the plaintiffs waited too long to bring their claims and that the United States had not waived its sovereign immunity. ‘‘Plaintiffs’ claims accrued decades ago and are therefore barred by the statute of limitations. As this court stated in 2013, it is sympathetic to the claims made by plain- tiffs. But even sympathetic claims must comply with jurisdictional requirements,’’ the judge said, referring to her ruling in a previous case that individual tribe members were not entitled to money from the trust created by the CRSTECA. ‘‘Because there is no valid waiver of sovereign immunity, this court has no juris- diction to entertain this suit. Plaintiffs may deserve compensation, but that compensation must come from Congress.’’ Trust Obligation Judge Schreier rejected the plaintiffs’ argument that because the 1868 Treaty of Fort Laramie, the General Allotment Act and the Act of March 2, 1889, impose a trust obligation on the United States to prevent the alienation of land, the laws are sufficient to support the breach of trust and fiduciary duty claims. ‘‘Even if the United States had a trust obligation or fiduciary duty to plaintiffs as to their land, any breach of trust or fiduciary duty would have occurred and been known to plaintiffs when their land was flooded,’’ the judge said. ‘‘Plaintiffs do not present any argument or evidence to show that they were unaware of the MEALEY’S Native American Law Report Vol. 1, #1 March 2015 21
  • 22. alienation of their land at the time it occurred or that the flooding of their land was somehow concealed from them. Thus, any claim plaintiffs had relating to a breach of trust or fiduciary duty based on the aliena- tion of their land accrued no later than when the land was flooded because all events fixing liability had occurred and the plaintiffs knew of their claim.’’ The plaintiffs had argued that tribal landowners did not receive fair value for their land even though similarly situated white landowners did receive fair value, and the 1954 act imposed a trust obligation on the United States to pay just compensation for the plaintiffs’ land. ‘‘But any compensation decisions would have been known to plaintiffs at the time the United States made its payments to them. In fact, plaintiffs indicate that they signed statements accepting the values even though they thought at the time the values were too low. Thus, plaintiffs’ claims based on unfair compensation accrued at that time because all facts fixing the United States’ liability had occurred,’’ Judge Schreier held. Counsel The plaintiffs are represented by Judith K. Zeigler of Judith K. Zeigler Law in Sioux Falls and Vernle C. Durocher, Kristin M. Stastny and Forrest K. Tah- dooahnippah of Dorsey Whitney in Minneapolis. The United States is represented by U.S. Attorney Brendan V. Johnson and Assistant U.S. Attorney Camela C. Theeler in Sioux Falls; Acting Assistant Attorney General Sam Hirsch of the U.S. Department of Justice Environment and Natural Resources Divi- sion in Washington, D.C.; Devon Lehman McCune of the Department of Justice Environment and Natural Resources Division in Denver; and Kenneth Dalton and Ericka Howard of the U.S. Department of the Interior in Washington. (Additional document available. Complaint. Docu- ment #96-150325-057C.) I Chippewa Indian Tribe Opposes High Court Review Of Hunting Decision WASHINGTON, D.C. — The Lac Courte Oreilles Band of Lake Superior Chippewa Indians on March 9 asked the U.S. Supreme Court to deny a petition for writ of certiorari filed by the State of Wisconsin and leave intact a Seventh Circuit U.S. Court of Appeals decision finding that the tribe had met its burden to show that a total ban on the nighttime hunting of deer was no longer necessary to ensure public safety (State of Wisconsin, et al. v. Lac Courte Oreilles Band of Lake Superior Chippewa Indians, et al., No. 14-792, U.S. Sup.). (Opposition brief available. Document #96-150325- 068B.) In 1991, the U.S. District Court for the Western Dis- trict of Wisconsin upheld a state statute, through the application of Wisconsin Administrative Code Section NR 13.54, prohibiting members of several Wisconsin Indian tribes from hunting deer at night outside the tribes’ reservations. Several Wisconsin Indian tribes moved the District Court under Federal Rule of Civil Procedure 60(b)(5) to relieve them from the final judgment on the ground that its continued enforcement would be ‘‘no longer equitable.’’ The District Court denied the motion. Comparative Evidence In reversing and remanding, the Seventh Circuit said, ‘‘The burden of production should be placed on the state, for as the record stands the evidence presented by the tribes that night hunting for deer in the ceded territory is unlikely to create a serious safety problem provides a compelling reason for vacating the 1991 judgment that prohibited Indians from hunting deer at night in that territory.’’ The panel commented that it would leave to the Dis- trict Court the decision whether to invite the parties to submit evidence from Oregon, Washington, Minne- sota and Michigan, which are states that allow Indians to hunt deer at night. Burden Shifted In January, the state filed a petition for writ of certiorari with the Supreme Court, saying that the Seventh Cir- cuit’s opinion shifted the burden to the nonmoving party to justify an underlying judgment that night hunting of deer was fundamentally unsafe. The state Vol. 1, #1 March 2015 MEALEY’S Native American Law Report 22
  • 23. asked the court to determine whether Rule 60(b)(5) permits such a shift. The state says that it does not and that the Seventh Circuit’s decision ‘‘undermines the proper function of the Rule, is in conflict with this Court’s and other circuits’ precedent, and introduces an improperly expansive approach to reopening judgments within the Seventh Circuit and, potentially, in other circuits.’’ ‘‘The Rule is an extraordinary remedy that reflects the value our legal system places on finality. The presump- tion against reopening an earlier judgment is enforced by keeping the burden of proof where it belongs (on the movant), keeping the focus of the substantive inquiry where it belongs (on whether circumstances outside the movant’s control have changed significantly since the entry of judgment), keeping the primary decision- making duties where they belong (with the district court whose decision is reviewed for abuse of discre- tion), and keeping the fact-finding duties where they belong (in the trial court),’’ the state says. ‘‘The Seventh Circuit’s approach turns these imperatives on their heads. If allowed to stand, it threatens to generate future vexatious relitigation and uncertainty in a variety of contexts. That is especially true for the States, which are commonly parties to judgments and consent decrees with ongoing effect, including those involving Indian tribes.’’ Petition Opposed ‘‘The Seventh Circuit’s unanimous decision was based on the unique factual circumstances presented in this case,’’ the tribe says in its opposition brief. ‘‘It does not pose an issue of national importance, it does not create a circuit split in authority, and it is not at odds with any precedent of this Court. Consequently, there is no reason to grant review over this interlocutory appeal.’’ A closer examination of the state’s argument reveals that the state ‘‘simply disagrees with the Seventh Circuit’s application of the traditional Rule 60(b)(5) standard, which is insufficient grounds for granting certiorari,’’ the tribe says. Precedent establishes that a party is entitled to relief from a final litigated judgment under Rule 60(b)(5) if the movant can establish new facts or laws that, if they had been before the lower court in the original petition, would have produced a decision in favor of the moving party, the tribe says, adding that those are the circumstances of the present case. Also, contrary to the state’s argument, the Seventh Circuit’s decision does not shift the burden of proving changed circumstances to the nonmoving party, the tribe says. The Seventh Circuit believed that the tribe had established the existence of changed circumstances, the tribe says. Rather than compelling the District Court to reopen the final judgment, the Seventh Cir- cuit noted that the court could, on remand, permit the introduction of evidence of safety of nighttime deer hunting in other jurisdictions. If the District Court did so, however, the Seventh Circuit indicated that the burden of production should be shifted to the state to produce the evidence, the tribe says. ‘‘This made sense, because the Tribes had already met their burden.’’ The tribes are represented by James Henry Schlender Jr. of the Lac Courte Oreilles Legal Department in Hayward, Wis. Wisconsin is represented by Diane L. Milligan of the Office of the Attorney General, Wis- consin Department of Justice, in Madison, Wis. (Additional document available. Petition for writ of certiorari. Document #96-150325-073B.) I Wyoming Federal Judge: Eagle Permit Violates Exercise Of Religion CHEYENNE, Wyo. — Calling the issue one of first impression, a Wyoming federal judge on March 12 held that the First Amendment to the U.S. Constitu- tion forbids the federal government from imposing the burden of law on one federally recognized Indian tribe’s free exercise of religion for the benefit of an- other Indian tribe (Northern Arapaho Tribe v. Daniel Ashe, in his official capacity of U.S. Fish Wildlife Service Director, No. 11-347, D. Wyo.; 2015 U.S. Dist. LEXIS 31435). (Opinion in Section A. Document #96-150325- 040B.) Eagle Permit In 2009, the Northern Arapaho Tribe (NAT) and the chairman of the Northern Arapaho Business Council MEALEY’S Native American Law Report Vol. 1, #1 March 2015 23

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