Update on State Compacting Authority Litigation CWAG August 2009

2. Update on State Compacting Authority Litigation CWAG August 2009 • Stephanie Striffler • Senior Assistant Attorney General • Oregon Dept of Justice

3. Background: relationship of state and federal law

4. Indian Gaming Regulatory Act • 25 U.S.C. Sec. 2710(d)(1)(C) requires that Class III gaming be “conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State...that is in effect.” • The compact takes effect only when approval by the Secretary of Interior is published. 25 U.S.C. sec. 2710(d)(3)(B). • Secretarial approval can not cure a defect in state authority. Pueblo of Santa Ana v. Kelly , 104 F3d 1546 (10th Cir. 1997).

5. Kinds of challenges and forms of invalidity

6. Separation of powers • Invalidation based on view that matters negotiated in compacts are matters of policy for the legislature that the legislature has not authorized. • E.g., State ex rel Stephan v. Finney, 836 P2d 1169 (Kan. 1992): “We conclude the legislature has enacted no legislation authorizing the Governor to negotiate the compact herein and bind the State thereby.”

7. Illegal gaming authorized • Invalidation based compact authorizing • tribes to engage in forms of gaming not • otherwise authorized in state law. • E.g. Florida House of Representatives v. Crist, 999 So.2d 601 (Fla. 2008), cert den ___US___, 129 S Ct 1526, 173 L Ed2d 657 (2009)

8. Compacting Authority • Initiative or other legislative compact • Legislative delegation • Legislative ratification

9. Issues in Litigation • Standing • Indispensable parties

10. Recent Cases

11. Taxpayers of Michigan Against Casinos v. Michigan (TOMAC II) , 732 NW2d 487 (Mich. 2007) • Florida House of Representatives v. Crist, 999 So.2d 601 (Fla 2008), cert den. ___US___, 129 S Ct 1526, 173 L Ed2d 657 (2009) • Mudarri v. State, 196 P3d 153, rev den 203 P3d 1123 (Wash App 2009) • Dewberryv. Kulongoski, ___Or___ (Or June 18, 2009)

12. Mudarri v. State of Washington • Suit by private casino operator on numerous grounds • The court held : • 1) The tribe was an indispensable party to challenge to compact , so did not address challenges • 2) The equal protection claim failed because plaintiff was not similarly situated to the Tribe. By entering compact with the tribe, the state was not conferring a privilege to a “citizen or class of citizens” under the state Privileges and Immunities clause.

13. Taxpayers of Michigan Against Casinos v. Michigan (TOMAC II) • Legislature approved gaming compacts – Under TOMAC I form of legislation was constitutional • The court held: amendatory provision of legislatively approved compact did not violate separation of powers. “The Legislature chose to approve an amendment procedure that gives the Governor broad power to amend the compacts, and the Legislature was well within its authority to make such a decision.”

14. Florida House of Representatives v. Crist • Governor did not have authority to execute compact, violation of separation of powers. • Compact authorized games prohibited under Florida law, such as house-banked card games – did not consider whether other compact provisions encroached on legislature’s policymaking authority. • “Necessary business” clause does not authorize governor to executive compacts to create exceptions to the law .

15. Dewberry v. Kulongoski • Challenge by “People Against a Casino Town” • Federal court, 406 F. Supp. 2d 1136 (D. Or. 2005) held • Tribes were indispensable parties • Governor had statutory and constitutional authority to enter compact • Compact did not authorize prohibited games

16. Oregon Supreme Court reversed and remanded mandamus dismissal, holding: • Indispensable party rule did not apply in mandamus • Plaintiffs did not have adequate alternate remedy