MEMORANDUM OPINION GRANTING IN PART PLAINTIFFS'
MOTION TO AMEND COMPLAINT
RUDOLPH CONTRERAS UNITED STATES DISTRICT JUDGE.
I.
INTRODUCTION
Before
this Court is the latest volley in a contentious,
long-running battle over a stalled casino project in East
Windsor, Connecticut. The state of Connecticut (the
“State”) and the Mashantucket Pequot Tribe claim
that the United States Secretary of the Interior has
unlawfully declined to approve an agreement that would allow
them to begin constructing the casino. Defendants-the
Secretary, the Department of the Interior, and MGM Resorts
Global Development, LLC-argue that the Secretary has violated
no law. Having failed to convince this Court of their first
theory of the case, Plaintiffs-the State and the Pequot-seek
to amend their complaint and take a second bite at the apple.
While Plaintiffs' motion appears to be the product of
tactical timing more than newly-discovered information or
legal theories, allowing the case to proceed would not unduly
prejudice Defendants. And while one of Plaintiffs' three
proposed claims would not survive a motion to dismiss, the
Court cannot say that amendment would be futile as to the
other two claims. Thus, for the reasons stated below, the
Court will allow Plaintiffs to amend their complaint in
certain respects.
II.
BACKGROUND[1]
A.
The Indian Gaming Regulatory Act
The
Indian Gaming Regulatory Act (“IGRA”) governs
Class III casino gaming- blackjack, roulette, slot machines,
and other casino games-on tribal land. 25 U.S.C. §§
2701 et seq.; 25 C.F.R. § 502.4; Amador Cty. v.
Salazar, 640 F.3d 373, 376 (D.C. Cir. 2011). It mandates
that a tribe must obtain authorization from a state before
conducting Class III gaming on land within that state's
borders. 25 U.S.C. § 2710(d)(1)(C). That authorization
may be obtained in one of two ways: (1) negotiating a
tribal-state compact with the state, see id. §
2710(d)(3)(A); or (2) asking the Secretary to impose
secretarial procedures, see id. §
2710(d)(7)(B).
A
tribal-state compact is “an intergovernmental agreement
executed between Tribal and State governments under the
[IGRA] that establishes . . . the terms and conditions for
the operation and regulation of the tribe's Class III
gaming activities.” 25 C.F.R. § 293.2. If the
Secretary does not explicitly approve or disapprove a
tribal-state compact within 45 days after the Office of
Indian Gaming receives it, [2] the compact shall be
automatically approved “to the extent the compact is
consistent with” the IGRA. 25 U.S.C. §
2710(d)(8)(A)-(C); 25 C.F.R. §§ 293.10-12. The
Secretary may disapprove a compact for one of three reasons:
(1) it violates the IGRA, (2) it violates any other provision
of Federal law that does not relate to jurisdiction over
gaming on tribal land, or (3) it violates the United
States' trust obligations to Native Americans. 25 U.S.C.
§ 2710(d)(8)(B); 25 C.F.R. § 293.14. Once a compact
is approved, the Secretary must publish that approval in the
Federal Register within 90 days from the date of receipt. 25
U.S.C. § 2710(d)(8)(D); 25 C.F.R. § 293.15(b). The
compact becomes effective when its approval is published. 25
U.S.C. § 2710(d)(3)(B); 25 C.F.R. § 293.15(a). The
Department's regulations apply these same procedural and
substantive requirements to compact amendments. See
25 C.F.R. §§ 293.4, 293.10.
Secretarial
procedures govern class III tribal gaming when a tribe and a
state cannot reach good faith agreement on a compact. 25
U.S.C. § 2710(d)(7)(B)(vii)(II). These procedures result
from a series of forced negotiations between the tribe and
the state, including mediation. See id. §
2710(d)(7)(A), (B). If the tribe and the state ultimately
cannot agree on a compact, “the Secretary shall
prescribe, in consultation with the Indian tribe,
procedures” for Class III gaming activities
“which are consistent with the proposed compact
selected by the mediator . . . the provisions of [the IGRA],
and the relevant provisions of the laws of the
[s]tate.” Id. § 2710(d)(7)(B)(vii)(I).
The Department has not issued regulations governing the
secretarial procedures or procedure amendments at issue in
this action.[3]
B.
Relevant Facts and Procedural History
In
1989, the Pequot sought to open a casino in Connecticut.
See Mashantucket Pequot Tribe v. Connecticut, 913
F.2d 1024, 1026 (2d Cir. 1990), cert. denied, 499
U.S. 975 (1991). However, the Pequot and the State could not
agree on a tribal-state compact to govern the Pequot's
gambling activities. Id. at 1027. The Pequot
accordingly availed themselves of the IGRA's secretarial
procedures mechanism, and in 1991 the Secretary imposed
procedures (the “Pequot Procedures”) on the
Pequot and the State. See Compl. ¶ 25, ECF No.
1; Notice of Final Mashantucket Pequot Gaming Procedures, 56
Fed. Reg. 24, 996 (May 31, 1991). The Pequot's casino has
operated under these procedures ever since. In 1994 the State
and another tribe, the Mohegan Tribe of Indians of
Connecticut (the “Mohegan”) (together with the
Pequot, the “Tribes”), executed a tribal-state
compact (the “Mohegan Compact”) allowing the
Mohegan to operate their own casino within the State.
See Compl. ¶ 24.[4]
In
return for the State allowing the Tribes to operate casinos,
the Pequot Procedures and Mohegan Compact Memoranda of
Understanding mandate that the State receive a percentage of
the Tribes' gross operating revenues from certain
gambling activities. See generally Pequot Procedures
MOU; Mohegan Compact MOU. They also mandate that if the State
permits “any other person” to engage in those
activities, the State is no longer entitled to its royalty
payments (the “exclusivity clauses”). See
id. By their terms both the Pequot Procedures and the
Mohegan Compact may be amended only by written agreement of
the Tribes and the State, and the amendments do not become
effective until the Secretary approves them and publishes
notice of that approval in the Federal Register in accordance
with 25 U.S.C. § 2710(d)(3)(B).[5] See Pequot
Procedures § 17; Mohegan Compact § 17.
In
2015, the Tribes agreed to form a joint venture, MMCT Venture
LLC (“MMCT”), to build and operate an
off-reservation, commercial casino in East Windsor,
Connecticut.[6] Decl. of Uri Clinton (“Clinton
Decl.”) ¶¶ 17-19, ECF No. 11-2; see
also MMCT's Articles of Organization, Mem. Supp.
MGM's Mot. Leave Intervene Ex. A, ECF No. 11-3. The
proposed East Windsor casino project threatened MGM's
plans in the region. MGM was in the midst of constructing a
casino in Springfield, Massachusetts, a mere twelve miles
north of East Windsor. See Pls.' Opp'n to
Defs.' Partial Mot. to Dismiss at 9, ECF No. 27; Clinton
Decl. ¶¶ 13, 17, 20.[7]MGM also planned to pursue a
casino project in Bridgeport, Connecticut. See
Clinton Decl. ¶¶ 5, 8. It thus lobbied against
legislative approval of the Tribes' casino, arguing that
Connecticut should implement a competitive selection process
for the right to operate the State's first commercial
casino. Id. ¶ 6. Those efforts failed, and the
Tribes secured their casino project's conditional
approval in 2017 through the passage of Public Act
17-89.[8] 2017 Conn. Acts 17-89 (Reg. Sess.). This
setback notwithstanding, MGM continued to push for a
Bridgeport casino. See Clinton Decl. ¶¶
8-10.
Public
Act 17-89 states that MMCT “is authorized to conduct
authorized games at a casino . . . at 171 Bridge Street, East
Windsor.” 2017 Conn. Acts 17-89 § 14(b) (Reg.
Sess.). Its passage did not, however, remove all obstacles
from the Tribes' path to operating Connecticut's
first commercial casino. Rather, it provides that its
“authorization shall not be effective unless”:
(1) the Tribes and the State's governor execute
“amendments to” the Pequot Procedures and the
Mohegan Compact, and their memoranda of understanding,
creating a special exemption for MMCT such that
“authorization of MMCT . . . to conduct [casino] games
in the [S]tate does not terminate” the Tribes'
obligation to pay the State royalties from their gaming
activities;
(2) the amendments “are approved or deemed approved by
the Secretary . . . pursuant to the [IGRA] . . . and its
implementing regulations”;
(3)-(4) the amendments “are approved by” the
Connecticut legislature; and
(5) the Tribes pass resolutions providing that the State may
sue the Tribes if MMCT fails to pay any fees or taxes due to
the State.
Id. § 14(c). To satisfy the Act's
conditions, the State and the Tribes agreed to amend the
Pequot Procedures and the Mohegan Compact to exempt MMCT from
the exclusivity clauses. Compl. ¶ 27.
During
the amendment process the Tribes allegedly requested
technical assistance from the Office of Indian Gaming, and
according to Plaintiffs that Office “repeatedly
informed representatives of the Tribes that it intended to
approve” the amendments. Id. ¶¶
28-31. The Tribes and the State duly approved and executed
the amendments according to Tribal and State law,
id. ¶ 33, and in late July and early August
2017, the Tribes requested that the Office of Indian Gaming
formally approve the amendments. See Compl. ¶
32; First Am. Compl. (“FAC”) Ex. 1, ECF No. 60-2
at 21-69. Instead, the Secretary's office
“return[ed]” the amendments to the Tribes and the
State “to maintain the status quo, ” stating:
We find that there is insufficient information upon which to
make a decision as to whether a new casino operated by the
Mohegan and Mashantucket Pequot Tribes (Tribes) would or
would not violate the exclusivity clauses of the Gaming
Compact [and Pequot Procedures]. The Tribes have entered an
agreement with the State whereby they have agreed that the
exclusivity [clauses] will not be breached by this
arrangement. Therefore, our action is unnecessary at this
time.
See Mem. Supp. Pls.' Mot. (“Pls.'
Mem.”) Ex 4, ECF No. 60-2 at 91-93;[9] see also
Compl. ¶ 37. This response prompted the Tribes and the
State to file suit in this Court.
The
Tribes and the State initially claimed that because the
Secretary did not explicitly disapprove their proposed
amendments to the Pequot Procedures and the Mohegan Compact
within 45 days, the IGRA required that the Secretary deem the
amendments approved by law and publish notice of that
approval in the Federal Register. See id.
¶¶ 40-60. Shortly after the complaint was filed,
the Secretary approved the proposed amendments to the Mohegan
Compact and published that approval.[10] See Tribal-State
Class III Gaming Compact Taking Effect in the State of
Connecticut, 83 Fed. Reg. 25, 484 (June 1, 2018); First Joint
Status Report at 1, ECF No. 41. This Court then concluded
that the procedural requirements governing the
Secretary's approval of tribal-state compacts and compact
amendments-including amendments to the Mohegan Compact-do not
govern the Secretary's approval of secretarial procedures
and procedures amendments-including amendments to the Pequot
Procedures. Connecticut v. U.S. Dep't of
Interior, 344 F.Supp.3d 279, 318-19 (D.D.C. 2018). The
Court dismissed the initial complaint on those grounds.
Id. at 319-20.
Undeterred,
the remaining Plaintiffs-the State and the Pequot-seek to
press on with new theories. They have moved to amend their
complaint to assert three new claims, discussed in greater
detail below. See Pls.' Mot. For Leave to Amend
Compl., ECF No. 60; FAC. Although the proposed claims are
different than Plaintiffs' original claims, they arise
from the same event: The Secretary's refusal to approve,
or explicitly disapprove, the proposed amendments to the
Pequot Procedures. The proposed claims also arise under the
same cause of action as the original claims: The
Administrative Procedure Act (“APA”), 5 U.S.C.
§ 706. Despite these similarities, Defendants argue that
the Court should deny Plaintiffs' motion to amend their
complaint. Fed. Defs.' Opp'n to Pls.' Mot., ECF
No. 62; MGM's Opp'n to Pls.' Mot., ECF No. 63.
The issue has been fully briefed and is ripe for the
Court's consideration.
III.
LEGAL STANDARD
Federal
Rule of Civil Procedure 15(a) permits a plaintiff to amend
its complaint once as a matter of course within 21 days of
serving it or within 21 days of the filing of a responsive
pleading. Fed.R.Civ.P. 15(a)(1). Otherwise, the plaintiff may
amend its pleading only with the opposing party's written
consent-which has been denied in this case-or the Court's
leave. Fed.R.Civ.P. 15(a)(2).
“The
decision to grant or deny leave to amend . . . is vested in
the sound discretion of the trial court.”
Commodore-Mensah v. Delta Air Lines, Inc., 842
F.Supp.2d 50, 52 (D.D.C. 2012) (citing Doe v.
McMillan, 566 F.2d 713, 720 (D.C. Cir. 1977)). And Rule
15 instructs courts to “freely give leave when justice
so requires.” Fed.R.Civ.P. 15(a)(2); see also
Belizan v. Hershon, 434 F.3d 579, 582 (D.C. Cir. 2006)
(explaining that Rule 15 “is to be construed
liberally”). Generous standard notwithstanding, courts
may deny leave to amend for such reasons as “undue
delay, bad faith or dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, [or] futility of
amendment.” Foman v. Davis, 371 U.S. 178, 182
(1962). “Amendments that do not radically alter the
scope and nature of the action . . . are especially
favored.” United States ex rel. Westrick v. Second
Chance Body Armor, Inc., 301 F.R.D. 5, 8 (D.D.C. 2013)
(quoting Estate of Gaither ex rel. Gaither v. District of
Columbia, 272 F.R.D. 248, 252 (D.D.C. 2011)). Finally,
“[t]he party opposing the amendment bears the burden to
show why leave should not be granted.” Flaherty v.
Pritzker, 322 F.R.D. 44, 46 (D.D.C. 2017) (citing
Dove v. Washington Metro. Area Trans. Auth., 221
F.R.D. 246, 247 (D.D.C. 2004)).
IV.
ANALYSIS
Plaintiffs
seek to add three claims to their complaint. First,
Plaintiffs argue that “Federal Defendants'
purported ‘return' of the [Pequot Procedures
amendments] was arbitrary and capricious on its face, ”
particularly given the Secretary's approval of the
identical Mohegan Compact amendment. Pls.' Mem. at 7, ECF
No. 60-1; FAC ¶¶ 60-66. Second, Plaintiffs argue
that “Federal Defendants' failure to approve the
[Pequot Procedures amendments] was the product of improper
political influence.” Pls.' Mem. at 7; FAC
¶¶ 68-72. Third, Plaintiffs argue that the proposal
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