New Ninth Circuit Ruling Could Have Impact On Washington Compact Litigation

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A new, split decision opinion from the Ninth Circuit Court of Appeals has the potential to impact the battle over tribal compacts playing out in Washington.

The Ninth Circuit decided by 2-1 vote to grant summary judgment to the Chicken Ranch Rancheria of Mewukl Indians. They and other tribes had brought suit against California and Governor Gavin Newsom for violating the Indian Gaming Regulatory Act (IGRA).

The IGRA contains a provision requiring governments to engage in good faith negotiations with tribes seeking to offer Class III (full casino) gaming in a state where that activity is permitted. At issue, in this case, was what constitutes a lack of good faith in such negotiations.

There are ongoing high-profile challenges to IGRA over sports betting compacts both Washington State and Washington D.C. Against that backdrop, any case expanding the jurisprudence around IGRA’s scope is an important one to watch.

This result out of California is significant for the Washington case, where Maverick Gaming is the plaintiff. The Ninth Circuit includes Washington, so any relevant findings in this decision will also be binding on that case.

What is the California Compacts Case About?

This case concerns whether the State of California went too far in adding topics to the compact negotiations. Various tribes had approached the state, seeking to enter into Class III gaming compacts. The IGRA states that upon receiving such a request, “the State shall negotiate with the Indian tribe in good faith.”

In 1999, about 60 California tribes entered gaming compacts with the state. Those compacts were all set to expire on December 31, 2020. There was a subsequent extension until June 30, 2022, for tribes actively negotiating extensions or renewals of their compacts. As negotiations dragged on, existing compacts eventually received a second extension until December 31, 2023.

These negotiations have been ongoing since 2015. There were more than 20 compact proposals introduced by one side or the other over nearly 40 negotiating sessions in the four years from 2015 to 2019.

The two sides agreed broadly on many issues. Throughout the negotiations, however, California continued to insist that tribes agree to enforce State judgments for child and spousal support against tribal gaming facility employees. In addition, the state wanted the tribes to waive sovereign immunity for tort claims.

Each of these would undermine tribal sovereignty. The tribes, therefore, rejected these provisions, noting that the demands were unconnected to gaming. To their thinking, the state’s efforts to negotiate for them under IGRA were inappropriate.

Meet the Judges

The three-member panel of Judges that heard and decided the case was composed of:

  • Judge Daniel A. Bress, who wrote the opinion,
  • Judge Kim McLane Wardlaw, who wrote a concurrence, and
  • Judge Patrick J. Bumatay, who dissented.

Judge Wardlaw was a 1998 appointee to the Ninth Circuit. At one time, there were rumors that she was on President Obama’s shortlist of potential Supreme Court nominees.

Judge Bress was a 2019 nominee to the Ninth Circuit under President Trump. Just 40 years old at the time, he was one of the youngest federal judges. He previously clerked for Supreme Court Justice Antonin Scalia.

Judge Bumatay was twice nominated to the Ninth Circuit Court of Appeals, receiving his judicial commission on the second nomination in December 2019.

Summary Judgment in Tribes’ Favor

After California made its “best and final offer” in January 2019, the plaintiff tribes sued the state. They alleged that the state had failed to comply with the IGRA’s requirement to enter negotiations in good faith.

In their motion for summary judgment, the tribes argued that some of these provisions were “per se evidence of bad faith.” The Court agreed, despite Judge Dumatay’s dissent.

In the Ninth Circuit, the Court highlighted that IGRA outlines seven specific areas to which compact provisions may relate. These include licensing, criminal and civil jurisdiction to enforce regulations, taxation, and gaming standards.

The opinion concludes that only the seven enumerated topics are permitted negotiation topics. Therefore, California’s attempts to extend negotiations beyond these subjects violate the IGRA. Judge Bress’s opinion reads, in part:

Thus, a tribal-state compact may include provisions relating to the seven identified topics (though it is not necessarily required to), but it may not include provisions that do not relate to the topics listed.

The majority rejects all three of the most controversial negotiation subjects. These relate to family law, environmental standards, and torts. It asserts that these lack a “direct connection” to gaming activities.

Concurrence and Dissent

Judge Wardlaw not only agreed with Judge Bress’s opinion but provided a “judicial philosophy concurrence.” That is, she argued that in addition to the literal interpretation of Judge Bress (the “letter of the law”), there is support for the idea that the ruling is in line with the IGRA’s intent (the “spirit of the law”).

In his dissent, Judge Bumatay agrees that California strayed from the enumerated topics. However, he argues that the text of the statute does not support a finding of “an automatic bad-faith rule.”

That means that, in the eyes of Judge Bumatay, including those additional provisions does not automatically indicate bad faith. He argues that it merely shifts the burden to the state to justify the inclusion of those topics and show that it acted in good faith.

Relevance to the Maverick Gaming Case

This decision comes as the very framework of IGRA is under threat in Washington State.

Maverick Gaming has asked a Washington District Court to decide whether the obligation for states to negotiate under IGRA constitutes impermissible commandeering of state officials to effectuate federal policy.

The California case does not address the same issue directly. However, the decision does add support for the existence of the negotiation clause in IGRA. Neither the opinion nor even the dissent casts any skepticism on the constitutionality of the crucial shall negotiate” language.

That topic was not raised as an issue at the District Court. However, this case is just one in a series dating back to 1988, which has been shaping the IGRA process. While some challenges have rolled back certain provisions, IGRA has mostly stood up to heavily litigation and retains its most impactful provisions.

About the Author

John Holden

John Holden is a writer at Bonus, focused on legal and regulatory issues in the gambling industry. He is a full-time academic but has been writing for a number of gaming publications since 2018. He is the author of more than 50 academic publications and hundreds of mainstream articles on the regulation of the gaming industry.

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