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DIAMOND GAME ENTERPRISES v. RENO

June 23, 1998

DIAMOND GAME ENTERPRISES, INC., KICKAPOO TRADITIONAL TRIBE OF TEXAS, Plaintiffs, THE CHEYENNE and ARAPAHO TRIBES OF OKLAHOMA GAMING COMMISSION, on behalf of THE CHEYENNE and ARAPAHO TRIBES OF OKLAHOMA, Plaintiff-Intervenor,
v.
JANET RENO, ATTORNEY GENERAL OF THE UNITED STATES, ET AL., Defendants, THE STATE OF ALABAMA, THE STATE OF CALIFORNIA, and THE STATE OF FLORIDA, Defendant-Intervenors.



The opinion of the court was delivered by: URBINA

MEMORANDUM OPINION

 I. Introduction

 The plaintiffs *fn1" bring suit seeking declaratory judgment and injunctive relief to prevent the defendants *fn2" from commencing forfeiture proceedings on gaming devices used in Indian gaming casinos. Specifically, the plaintiffs seek an order declaring that the Lucky Tab II machine is a Class II electronic aid which, under the Indian Gaming Regulation Act, ("IGRA"), 25 U.S.C. § 2703(7)(A), assists its users in playing the traditional pull-tab game. In addition, the plaintiffs also seek to enjoin the defendants from interfering with the plaintiffs' right to manufacture, install and operate the Lucky Tab II gaming devices.

 The issues come before the court on the parties' cross-motions for summary judgment. This case is appropriate for resolution by summary judgment since it presents no genuine issues of material fact. Fed. R. Civ. P. 56(c); see Anderson v. Liberty Lobby, 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The motions frame the dispositive issue as follows: Is the Lucky Tab II machine an "aid" to the traditional pull-tab game - thus making it a Class II gambling device which can be operated without state or federal involvement; or is the Lucky Tab II a "facsimile" of the pull-tab game - thereby rendering it a Class III gaming apparatus which necessitates a tribal-state compact for its legal operation? Upon consideration of the parties' submissions, oral and evidentiary presentation, and the law relevant to this controversy, the court concludes that the Lucky Tab II is a Class III gaming device. Accordingly, the court grants the federal defendants' and defendant-intervenors' motions for summary judgment in part and denies them in part. The plaintiffs' motion is denied.

 II. Background

 Plaintiff Diamond Game Enterprise, Inc., manufactures and distributes Lucky Tab II gaming devices to Indian tribes. In August 1996, plaintiff Kickapoo Tribe of Texas began operating approximately 100 Lucky Tab II devices on its Reservation. This drew the attention of the Director of Enforcement of the National Gaming Commission who informed the Kickapoo Tribe that these devices were subject to enforcement proceedings. The Director, however, advised the Tribe that he would defer any enforcement action while the parties negotiated the classification of the Lucky Tab II. At the time, the Director advised the plaintiffs that the Lucky Tab II gaming device could only be manufactured or operated pursuant to a tribal-state compact On March 18, 1997, plaintiffs Kickapoo Tribe and Diamond Enterprises filed an action in this court seeking declaratory judgment establishing the Lucky Tab II gaming device as a permissible aid to a Class II pull-tab game. The plaintiffs also sought injunctive relief to preclude the federal defendants from taking civil, criminal or administrative action against the manufacturers and operators of the Lucky Tab II device.

 On April 10, 1997, aware of the pending action and the uncertain classification of the Lucky Tab II, the Cheyene and Arapho Tribes of Oklahoma began operating 100 of these gaming devices on their respective Reservations. Consequently, these two tribes filed a motion to intervene in the then-pending motion for preliminary injunction. The court granted their motion to intervene as plaintiffs. On May 12, 1997, the court denied the plaintiff's motion for preliminary injunction and consolidated it with the action on the merits pursuant to Fed. R. Civ. P. 65(a)(2). On the same day, the parties entered into a stipulation which specified that the federal defendants agreed to refrain from taking any action against the plaintiffs in connection with the Lucky Tab II device predicated upon the plaintiffs ceasing to operate the Lucky Tab II devices until the court's final resolution of this issue. *fn3"

 Before discussing the merits of the controversy resolved by the court's determination that the Lucky Tab II fails to qualify as a Class II gaming device, the court will briefly address (1) the federal defendants' challenge to the court's jurisdiction, and (2) the plaintiffs' assertion that the IGRA implicitly repealed the Johnson Act's overly broad definition of "gambling device."

 III. Discussion

 A. The Plaintiffs Have Properly Alleged Federal Jurisdiction

 The federal defendants challenge the court's jurisdiction to preside over this dispute on grounds of sovereign immunity and interference with prosecutorial discretion. Neither ground is availing. Simply stated, the court has jurisdiction because 28 U.S.C. § 1331 vests district courts with "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." Similar to the present action, in a case involving the classification of a gaming device under the IGRA, the Ninth Circuit succinctly stated on the jurisdictional point, "section 1331 is enough; be it IGRA or the federal common law of Indian affairs that allocates jurisdiction among the federal government, the tribes, and the states." Sycuan Band of Mission Indians v. Roache, 54 F.3d 535, 538 (9th Cir. 1995). Likewise, in Cabazon Band of Mission Indians v. National Indian Gaming Comm'n, this court ruled that it had proper jurisdiction to adjudicate the Cabazon Band's motion for declaratory judgment under the IGRA because the Cabazon Band invoked jurisdiction under 28 U.S.C. § 1331. 827 F. Supp. 26, 29 n.5 (D.D.C. 1993) aff'd 304 U.S. App. D.C. 335, 14 F.3d 633 (D.C. Cir. 1993) ("Cabazon II "). The controversy in the instant case invites this court's interpretation and application of the IGRA, a federal statute within the meaning of 28 U.S.C. § 1331. Consequently, the court resolves the jurisdictional issue in favor of the plaintiffs.

 B. IGRA Does Not Implicitly Repeal the Johnson Act Because Both Statutes Can Coexist Without Conflict

 In 1962, Congress enacted the Gambling Devices Act which amended the Slot Machine Act of 1951 (better known as the Johnson Act). 15 U.S.C. §§ 1171 et seq. The 1962 Gambling Devices Act was not an independent piece of legislation; rather Congress promulgated it as an amendment revising the Johnson Act. Lion Mfg. Corp. v. Kennedy, 117 U.S. App. D.C. 367, 330 F.2d 833, 836 (D.C. Cir. 1964). The most important revision was the expansion of the Johnson Act's definition of the term "gambling device." This new definition broadened the previous definition of "gambling device" by including within its scope "other mechanical devices which were thought to offer similar opportunities in exploitation" as did the slot machine. Id. As it stands, the Johnson Act not only defines the "gambling device," 15 U.S.C. § 1171(a), but also prohibits the possession and operation of any such device, 15 U.S.C. § 1175, unless authorized under a tribal-state compact. 25 U.S.C. § 2710(d)(6). The Johnson Act, in pertinent part, defines "gambling device" as

 
(2) any other machine or mechanical device (including, but not limited to, roulette wheels and similar devices) designed and manufactured primarily for use in connection with gambling, and (A) which when operated may deliver, as a result of the application of an element of chance, any money or property, or (B) by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property, or . . . any subassembly or essential part intended to be used in connection with any such machine or mechanical device, but which is not attached to any such machine or mechanical device as a constituent part, or
 
(3) any subassembly or essential part intended to be used in connection with any such machine or mechanical device, but which is not attached to any such machine ...

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