The opinion of the court was delivered by: ROYCE C. LAMBERTH
Before the court are rules promulgated by the National Indian Gaming Commission under the Indian Gaming Regulatory Act, 25 U.S.C.§§ 2701 et seq; all parties have moved for summary judgment. Upon consideration of the memoranda filed by all plaintiffs, by defendants, and by intervenor-defendants, and for the reasons stated below, the court finds that plaintiffs' objections to the rules are meritless. Thus, plaintiffs' motions for summary judgment shall be denied. Defendants' and intervenor-defendants' motions for summary judgment shall be granted, and final judgment shall be entered for defendants and intervenor-defendants. The State of Alabama's motion to dismiss the counterclaim filed by the Poarch Band of Creek Indians is also granted and this counterclaim is dismissed with prejudice.
Following the Supreme Court's decision in State of California v. Cabazon Band of Mission Indians, 480 U.S. 202, 94 L. Ed. 2d 244, 107 S. Ct. 1083 (1987) (authorizing gaming in Indian country), Congress enacted the Indian Gaming Regulatory Act ("IGRA"), codified at 25 U.S.C. §§ 2701 et seq. The Act, inter alia, codified the right of Indian tribes to conduct limited gaming on Indian lands; established the National Indian Gaming Commission ("the Commission") to implement and oversee the Act; and divided the various types of gaming into three "classes," each of which is subject to differing levels of state and federal regulation and involvement.
At issue in this case are rules relating to two of those three classes.
Class II gaming, the definition of which includes bingo and games comparable to it as well as non-banking card games, is subject to the provisions of IGRA and to state law, but remains within the jurisdiction of the Indian tribes. All games which do not qualify for class I or class II (examples include banking card games such as baccarat and casino games such as roulette) fall into the residuary category of class III gaming; such games are lawful only if the Indian tribe and the relevant State enter into a Tribal-State compact allowing such gaming. Although the Act anticipates that the States will negotiate such compacts in good faith, 25 U.S.C. § 2710(d)(3)(A), several Indian tribes assert that they have had difficulty reaching agreements with the States. Since only class III gaming requires such a compact, it is imperative for the Indian tribes that the definition of class II gaming be as expansive as possible.
Important in the distinction between class II gaming and class III gaming are the definitions of (as well as the allowable uses of) "electronic, computer or other technologic aids," 25 U.S.C. § 2703(7)(A)(i) and 25 C.F.R. § 502.7, and "electronic or electromechanical facsimiles," 25 U.S.C. § 2703(7)(B)(ii) and 25 C.F.R. § 502.8. The former may be used with respect to bingo, a class II game; the latter are relegated to class III. Thus, it is again imperative for the Indians that the definition of aids be as broad as possible.
The Commission promulgated Definitions under IGRA in its Proposed Rule and Public Hearings, dated November 1, 1991. 56 Fed. Reg. 56278. After five public hearings, the Commission released on April 9, 1992, its final Rule and Definitions. 57 Fed. Reg. 12382, codified at 25 C.F.R. § 502.1 et seq. In Claims One, Two, and Three of their four-count complaint, plaintiffs challenge several of the subsections of the Commission's final rule as arbitrary and capricious, beyond statutory authority, and contrary to law under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 et seq. In their final claim, plaintiffs request a declaratory judgment that video and computer assisted pull-tab games
qualify as class II games.
Plaintiffs are eight Indian tribes
that conduct gaming on Indian lands by using video and computer assisted pull-tab games which, plaintiffs assert, Congress meant to be within the class II definition but which the Commission allegedly has redefined illegally as class III games. Defendants are the Commission, its chairman, the Department of the Interior (and its secretary), and the Department of Justice (and the Attorney General). In addition, fifteen states
have intervened in the case as defendants. Both defendants and intervenor-defendants have filed cross-motions for summary judgment.
Finally, the Poarch band has also filed a counterclaim against intervenor-defendant State of Alabama. Alabama has filed a motion to dismiss the counterclaim.
II. ADMINISTRATIVE PROCEDURE ACT CHALLENGES.6
In the first three claims in their four-count complaint, plaintiffs challenge several aspects of the Commission's final rule as arbitrary and capricious, beyond statutory authority, and contrary to law under the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq. The court finds that the legislative rules promulgated by the Commission are perfectly consistent with Congress' unambiguous intent as embodied in IGRA. Therefore, defendants' and intervenor-defendants' motions for summary judgment as to these three claims will be granted; plaintiffs' motions for summary judgment as to these three claims will be denied.
Under the APA, a court reviewing an agency's legislative rule-making must first examine the statute and determine whether Congress has unambiguously expressed its intent. Chevron. U.S.A. v. National Resources Defense Council, 467 U.S. 837, 842-43, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984). If Congress has been unambiguous, neither the agency nor the court may diverge from that intent. Such is the case here.
First, plaintiffs challenge 25 C.F.R. § 502.3, the definition of "class II gaming."
Plaintiffs challenge the Commission's determination that the parenthetical "(whether or not electronic, computer, or other technologic aids are used)" should not be included in the description of the sub-games of pull-tabs, punch boards, tip jars, instant bingo, and other games similar to bingo in 25 C.F.R. § 502.3(b). Plaintiffs assert that the Commission's failure to include the parenthetical in subsection (b) means that the use of such aids is prohibited with respect to those sub-games. The court finds otherwise.
In its initial rule, the Commission divided the two categories of class II gaming enunciated in 25 U.S.C. § 2702(7)(A) (bingo [including the sub-games of pull-tabs, lotto, and the like] and non-banking card games) into three categories (bingo, the sub-games, and non-banking card games). As to the first two categories, the Commission included the parenthetical "(whether or not electronic, computer, or other technologic aids are used)," thus mirroring the construction of 25 U.S.C. § 2703(7)(A)(i).
In the final rule, however, the Commission stated that the parenthetical only modifies preceding language and thus removed the parenthetical from the § 502.3(b).
However, the Commission did not - and the rules do not - prohibit the use of such aids with respect to the sub-games. In fact, in its commentary to the final rule, the Commission noted "that in its view so long as technology does not fall under the definition of gambling devices under the Johnson Act (15 U.S.C. 1171), it is not prohibited." 57 Fed. Reg. at 12383. In other words, under the Commission's rules, technologic aids may be used with the sub-games.
In short, contrary to plaintiffs' assertions, the court finds that the use of aids is not prohibited by 25 C.F.R. § 502.3(b); rather, the Commission has specifically stated that the use of such technology is permitted with the sub-games, just as it is with bingo. Therefore, plaintiffs' objections are rejected as moot.
plaintiffs also challenge 25 C.F.R. § 502.4, the definition of "class III gaming."
Since Congress defined "class III gaming" negatively,
plaintiffs assert that it was unlawful for the Commission to promulgate an affirmative definition. This objection is frivolous. In its definition, the Commission included non-exclusive examples of class III gaming, all of which were either listed specifically in the statute (subsections (a)(1) and (b) of the Commission's definition) or enumerated in the accompanying Senate Report (subsections (a)(2), (c), and (d)). Moreover, and most importantly, the definition retains - verbatim - the statutory definition in its opening clause. ...