United States District Court, District of Columbia
COLLEEN KOLLAR-KOTELLY UNITED STATES DISTRICT JUDGE.
Forest County Potawatomi Community has brought this action
under the Administrative Procedure Act (“APA”)
against Defendants United States of America, United States
Department of the Interior, the Secretary of the Interior,
and the Assistant Secretary of Indian Affairs (collectively,
the “Federal Defendants”), challenging the
Assistant Secretary's decision to disapprove a 2014
amendment to a gaming compact between Plaintiff and the State
of Wisconsin under the Indian Gaming Regulatory Act. 25
U.S.C. §§ 2701 et. seq,
(“IGRA”). The Court has previously granted the
Menominee Indian Tribe of Wisconsin (“Menominee”)
and the Menominee Kenosha Gaming Authority's
(collectively, the “Defendant-Intervenors”) 
Motion for Leave to Intervene as Defendants.
before the Court is Plaintiff's  Motion for Summary
Judgment, Federal Defendants'  Cross-Motion for
Summary Judgment, and Defendant-Intervenors'  Cross-
Motion for Summary Judgment. Upon consideration of the
pleadings,  the relevant legal authorities, and the
record as a whole, the Court will DENY the Plaintiff's
motion, GRANT the Federal Defendants' motion, and GRANT
the Defendant-Intervenors' motion.
Court finds that the Assistant Secretary's disapproval of
Plaintiff's 2014 compact amendment was not arbitrary or
capricious. Evidence in the administrative record supports
the Assistant Secretary's determination that the 2014
compact amendment was inconsistent with IGRA. Because there
is evidence to support a finding that the amendment was
inconsistent with IGRA, it was not arbitrary or capricious
for the Assistant Secretary to disapprove the amendment.
Statutory and Regulatory Background
passed IGRA in 1988 in order “to provide a statutory
basis for the operation of gaming by Indian tribes as a means
of promoting tribal economic development, self-sufficiency,
and strong tribal governments.” 25 U.S.C. §
2702(1). IGRA divides gaming into three classes. As is
relevant here, Class III games are “all forms of gaming
that are not class I gaming or class II gaming.”
Id. at § 2703(8). Class III gaming includes
slot machines and “most casino games such as blackjack
and roulette.” Amador Cty., Cal. v. Salazar,
640 F.3d 373, 376 (D.C. Cir. 2011).
Indian tribe to engage in Class III gaming, the tribe must
have a tribal-state gaming compact. See 25 U.S.C.
§ 2710(d)(1)(C). Gaming compacts may include provisions
relating to a limited number of topics. Id. at
§ 2701(d)(3)(C)(i-vii). Gaming compacts may fall into
one of six enumerated categories or may be on “any
other subjects that are directly related to the operation of
gaming activities.” Id. at §
Class III gaming compacts must be submitted to the Secretary
of the Department of the Interior for approval. See
25 C.F.R. § 293.4. The Secretary has delegated authority
to approve or disapprove of compacts to the Assistant
Secretary of Indian Affairs.
gaming compact is submitted for approval, the Assistant
Secretary has three options. The Assistant Secretary may: (1)
approve the compact, (2) disapprove the compact, or (3) take
no action for 45 days, which results in the compact being
deemed approved only to the extent it is consistent with
IGRA. 25 U.S.C. § 2710(d)(8). The Assistant Secretary is
permitted to disapprove a compact only if the compact
violates IGRA, another federal law, or the United States'
trust obligations to Indians. Id. at §
is an Indian tribe occupying Southeastern Wisconsin.
FCPCAR000005. Prior to the passage of IGRA, Plaintiff
submitted an application to the United States to acquire in
trust for the benefit of the tribe two parcels of land
located in the city of Milwaukee, “Concordia College
Land” and “Menomonee Valley Land.”
Id. In its application, Plaintiff explained that it
intended to operate a bingo hall on the Menomonee Valley
Land. Id. Some of the profits from this bingo hall
would fund the Milwaukee Indian School located on the
Concordia College Land which served Indian children from
various Wisconsin tribes. Id.
lands were acquired in trust for Plaintiff in 1990 under the
Indian Reorganization Act. And Plaintiff's application to
conduct gaming on these lands was approved under IGRA.
Id. In 1991, Plaintiff opened a bingo hall.
FCPCAR000006. The closest Class III gaming facility was over
110 miles away from the bingo hall. Id.
1992, Plaintiff and the state entered into a gaming compact
to regulate the conduct of Class III gaming. Id. The
compact authorized 200 gaming devices at the bingo hall. The
compact also required Plaintiff to pay its proportional share
of the state's $350, 000 in annual costs for regulating
Indian gaming. Id.
1998, various amendments to the 1992 compact were required.
Id. Plaintiff and the state submitted a new compact
amendment to the Secretary of the Interior, and the amendment
was approved. Id. The 1998 compact amendment
permitted Plaintiff to operate 1, 000 gaming devices and 25
blackjack tables if the city and county adopted regulations
allowing expanded gaming. FCPCAR000007. Additionally, the
amendment increased Plaintiff's annual payment to the
state to $6, 375, 000 and extended the 1992 compact for five
additional years, with an expiration date of 2004.
and the state again amended the original 1992 compact in
2003. Id. In 2000, Plaintiff had opened a new,
larger casino, and the 2003 compact amendment authorized
Plaintiff to operate an unlimited number of gaming devices as
well as additional casino games. Id. As part of the
amendment, Plaintiff agreed to make lump-sum payments to the
state totaling $90.5 million over two years to help alleviate
the state budget crisis. Id. Plaintiff also agreed
to make increased annual payments to the state based on a
percentage of the Class III gaming net wins. Id.
consideration for the lump-sum payments and the increased
annual payments, Plaintiff and the state negotiated a 50-mile
“no-fly zone” around Milwaukee. FCPCAR000008.
Under the “no-fly zone” agreement, if the state
permitted Class III gaming within 50-miles of Plaintiff's
casino, then Plaintiff would be relieved of its obligation to
make additional payments and the state would refund some of
Plaintiff's past payments. Id.
the submitting the 2003 compact amendment to the Secretary,
the Secretary informed Plaintiff and the state that he would
not approve the amendment if the “no-fly zone”
provision was included. Id. The parties removed the
“no-fly zone” provision and re-submitted the
amendment to the Secretary. The parties agreed to negotiate a
new provision at a later date which would similarly benefit
Plaintiff. FCPCAR000009. Following the submission of the
amendment with the “no-fly zone” provision
removed, the Secretary took no action, so the amendment was
deemed approved to the extent it was consistent with IGRA.
year and a half, the parties attempted to negotiate a
substitute provision for the “no-fly zone” and to
resolve other ancillary issues. FCPCAR0000011. But, Plaintiff
and the state were unable to reach a complete agreement.
Id. In 2005, the parties agreed to again amend the
1992 compact. Id. The 2005 compact amendment
established a 30-mile “no-fly zone” and required
the parties to undertake last-best-offer arbitration
addressing the rights and duties of the parties in the event
that another tribe opened a Class III gaming facility within
30 to 50 miles of Plaintiff's casino. Id. The
2005 compact amendment was deemed approved by the Secretary
to the extent it was consistent with IGRA. FCPCAR000012.
Plaintiff continued to make lump-sum payments and annual
payments to the state in reliance on the compact amendment.
Plaintiff was renegotiating and amending its compact with the
state, the Menominee tribe was attempting to develop an
off-reservation casino for Class III gaming. In 2000, the
Secretary approved Menominee's request to operate Class
III gaming on an off-reservation land parcel in Kenosha,
subject to the land being acquired in trust for gaming
purposes. FCPCAR000685. The land parcel in Kenosha is located
33 miles away from Plaintiff's casino. FCPCAR001462. In
2004, Menominee filed an application asking the Secretary to
take the Kenosha land into trust for gaming purposes.
FCPCAR000685. In August 2013, the Assistant Secretary
approved Menominee's application to take the Kenosha land
into trust for gaming purposes. FCPCAR000014. Following the
Assistant Secretary's determination, the Governor of
Wisconsin had one year to concur. The Assistant Secretary
granted the Governor a six-month extension, giving the
Governor until February 19, 2015 to decide whether to concur.
this backdrop, in June 2014 the state invoked the arbitration
agreement from the 2005 compact amendment with Plaintiff. The
arbitration process was meant to establish compact terms
pursuant to which Plaintiff would be compensated for lost
revenue due to the opening of a new Class III gaming facility
within 30 to 50 miles of its casino. Id. The
arbitration panel selected the 2014 compact amendment as the
best proposed compact amendment. Id.
2014 compact amendment set out the obligations of the state
and Plaintiff in the event that the Assistant Secretary
approved a Class III gaming facility between 30 and 50 miles
away from Plaintiff's casino. FCPCAR000029. In that
event, the compact requires an annual Mitigation Payment to
the Plaintiff equal to the annual revenue lost. Id.
The annual revenue lost is to be calculated based on
“Milwaukee Net Revenues” which include revenue
from “Class III gaming, Class II gaming, food and
beverage, [and] hotel and entertainment activity.”
the state is ultimately “responsible for ensuring that
the Mitigation Payments are paid in a timely manner and in
full, ” the 2014 compact amendment “anticipate[s]
that the State will enter into agreements under which the
Applicant will agree to pay the Mitigation Payment.”
FCPCAR000031. The only named Applicant Facility is
Menominee's proposed gaming facility. FCPCAR000029.
the amendment provides a payment plan whereby the Plaintiff
“shall negotiate in good faith to reach an agreement on
reasonable terms proposed by the State which would obligate
the Applicant or other third party to make some or all of the
Mitigation Payments.” FCPC000032. The amendment
suggests these payments could be made from the “Lock
Box established in the Menominee Compact.” Id.
December 30, 2014, Plaintiff provided the Assistant Secretary
with the 2014 compact amendment and detailed arguments for
approving it. FCPCAR000001-25. But on January 9, 2015, the
Assistant Secretary disapproved the 2014 compact amendment,
finding it invalid under IGRA. FCPCAR001459-67.
disapproving the amendment, the Assistant Secretary concluded
that the amendment violated IGRA because it “includes
provisions involving subjects that exceed the permissible
scope of a Class III gaming compact.” FCPCAR001464. The
Assistant Secretary provided two primary reasons why the
amendment exceeded the permissible scope of a Class III
gaming compact. First, the Assistant Secretary determined
that, rather than the state, “in fact, Menominee would
be responsible for making all of the Mitigation
Payments.” Id. Because Menominee would make
the payments, the amendment “impose[d] upon another
tribe the obligation to guarantee the [Plaintiff's]
gaming and other profits.” Id. Second, the
calculation of the Mitigation Payments was based on revenue
from not only Class III gaming, but also Class II gaming and
ancillary businesses. FCPCAR001464-64 n.32.
January 21, 2015, Plaintiff filed this lawsuit challenging
the Assistant Secretary's disapproval of the 2014 compact
Rule 56(a) of the Federal Rules of Civil Procedure,
“[t]he court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.” However, “when a party seeks review of
agency action under the APA [before a district court], the
district judge sits as an appellate tribunal. The
‘entire case' on review is a question of
law.” Am. Bioscience, Inc. v. Thompson, 269
F.3d 1077, 1083 (D.C. Cir. 2001). Accordingly, “the
standard set forth in Rule 56[ ] does not apply because of
the limited role of a court in reviewing the administrative
record . . . . Summary judgment is [ ] the mechanism for
deciding whether as a matter of law the agency action is
supported by the administrative record and is otherwise
consistent with the APA standard of review.”
Southeast Conference v. Vilsack, 684 F.Supp.2d 135,
142 (D.D.C. 2010).
“sets forth the full extent of judicial authority to
review executive agency action for procedural
correctness.” FCC v. Fox Television Stations,
Inc., 556 U.S. 502, 513 (2009). It requires courts to
“hold unlawful and set aside agency action, findings,
and conclusions” that are “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2)(A). “This is a
‘narrow' standard of review as courts defer to the
agency's expertise.” Ctr. for Food Safety v.
Salazar, 898 F.Supp.2d 130, 138 (D.D.C. 2012) (quoting
Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). However,
an agency is still required to “examine the relevant
data and articulate a satisfactory explanation for its action
including a rational connection between the facts found and
the choice made.” Motor Vehicle Mfrs.
Ass'n, 463 U.S. at 43 (internal quotation omitted).
“Moreover, an agency cannot ‘fail[ ] to consider
an important aspect of the problem' or ‘offer[ ] an
explanation for its decision that runs counter to the
evidence' before it.” Dist. Hosp. Partners,
L.P. v. Burwell, 786 F.3d 46, 57 (D.C. Cir. 2015)
(quoting Motor Vehicle Mfrs. Ass'n, 463 U.S. at
considering the arguments of all the parties and reviewing
the administrative record, the Court concludes that the
Assistant Secretary's disapproval of Plaintiff's 2014
compact amendment was not arbitrary or capricious. The
Assistant Secretary determined that the amendment violated
IGRA in two ways. First, the Assistant Secretary determined
that the amendment violated IGRA by making one tribe liable
for another's revenue losses. Second, the Assistant
Secretary determined that the amendment violated IGRA by
requiring mitigation payments for Class II gaming and
ancillary businesses. Neither of these determinations were
arbitrary or capricious.
Assistant Secretary determined that the 2014 compact
amendment violated IGRA because the amendment concerned
subjects impermissible under tribal-state compacts. Plaintiff
contends that the subject of the compact was permissible
because it fell under IGRA's tribal-state compact
“catchall provision” which allows compacts
concerning “any other subjects that are directly
related to the operation of gaming activities.” 25
U.S.C. § 2701(d)(3)(C)(vii). As an initial matter, the
Court concludes that the catchall provision is ambiguous and
that the Assistant ...