Publication
United States District Court Finds California Failed to Negotiate Gaming Compact in Good Faith
By Heidi McNeil Staudenmaier and Amanda Z. Weaver, Ph.D.
On February 27, 2024, the District Court for the Eastern District of California entered an order finding that California did not negotiate a Class III gaming compact in good faith with Plaintiff Alturas Indian Rancheria (“Alturas”), as required by the federal Indian Gaming Regulatory Act (“IGRA”). See Alturas Indian Rancheria v. Newsom, No. 2:22-cv-01486-KJM-DMC, Dkt. No. 55 (Feb. 27, 2024).
The IGRA permits states to “play a role in regulating” Class III gaming through negotiation of tribal-state compacts. However, the IGRA “strictly limits” the topics that states may include in the compacts, and requires states to negotiate in good faith. Id. at 2. If a tribe believes the state has failed to negotiate in good faith, it can bring suit in federal court after a certain time period following negotiations. Id. Moreover, a state seeking to negotiate an “off-list topic” constitutes a per se violation of its duty to negotiate in good faith. Id.
The California district court recognized the legal precedent that the negotiation of environmental law and tort law provisions was per se evidence of the state’s lack of good faith. The court held the undisputed facts demonstrated that California attempted to negotiate environmental law and tort law provisions. Id. at 6. As such, the court found there was no genuine dispute of material fact “as to whether [California] negotiated in good faith,” finding California did not. Id.
The court’s order joins several other notable developments in California, including (1) the issuance of IGRA gaming procedures from the United States Department of the Interior for five tribes located in California, which resulted in the cessation of regulatory authority by the state in favor of the National Indian Gaming Commission (along with the tribal regulatory authority);1 (2) a decision from the Ninth Circuit Court of Appeals in 2022, in which the majority opinion concluded that California had failed to negotiate with several other tribes in good faith;2 and (3) the withdrawal of the Rincon Band of Luiseño Indians from California’s oversight of its tribal gaming operations, instead relying solely upon the federal government’s framework for performing regulatory responsibilities normally reserved for the state.3
The court here retained jurisdiction over the parties to engage in the IGRA’s remedial process under its supervision, which requires the parties to first resume negotiation. Id. at 9. If the parties do not conclude a compact through the additional negotiations, the next step in the IGRA remedial framework is for each party to submit to a mediator a proposed compact as a “last best offer.” Id. at 10 (citing 25 U.S.C. § 2710(d)(7)(B)(iv)). If the State does not consent to a proposed compact during the mediation process, the Secretary of the Interior is empowered to prescribe procedures governing Class III gaming in consultation with Alturas (as, for example, with the five tribes located in California earlier this year, see n.1, supra). 25 U.S.C. § 2710(d)(7)(B)(v)-(vii), (d)(8).
Footnotes
1. See “Secretary of the Interior Issues Class III Gaming Procedures for Five Tribes Without Role for State of California,” Legal Alert, Feb. 13, 2024, available at https://www.swlaw.com/publication/legal-alerts/secretary-of-the-interior-issues-class-iii-gaming-procedures-for-five-tribes-without-role-for-state-of-california. [Back]
2. See “Ninth Circuit Holds California Negotiated State-Tribal Gaming Compacts in Bad Faith,” Legal Alert, Aug. 18, 2022, available at https://www.swlaw.com/publication/legal-alerts/ninth-circuit-holds-california-negotiated-state-tribal-gaming-compacts-in-bad-faith. [Back]
3. See “Rincon Band Withdraws From State Regulatory Oversight Under the Indian Gaming Regulatory Act,” Legal Alert, Feb. 17, 2023, available at https://www.swlaw.com/publication/legal-alerts/rincon-band-withdraws-from-state-regulatory-oversight-under-the-indian-gaming-regulatory-act. [Back]
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