United States Court of Appeals

FOR THE EIGHTH CIRCUIT

________________________

Nos. 98-1484SD, 98-1577SD

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Turn Key Gaming, Inc., *

*

Appellant/Cross-Appellee, *

* On Appeal from the United

v. * States District Court

* for the District of South

* Dakota.

Oglala Sioux Tribe, *

*

Appellee/Cross-Appellant. *

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Submitted: October 19, 1998

Filed: January 4, 1999

___________

Before BOWMAN, Chief Judge, RICHARD S. ARNOLD and MORRIS SHEPPARD

ARNOLD, Circuit Judges.

___________

RICHARD S. ARNOLD, Circuit Judge.

The plaintiff, Turn Key Gaming, Inc., appeals from several rulings made by the

District Court on two motions for partial summary judgment. In both rulings the Court

resolved various legal issues concerning the meaning and effect of a management

contract between the parties. At the close of its second Memorandum Opinion, the

District Court entered a “judgment of dismissal, together with costs” against Turn Key,

leaving only the Tribe’s counterclaims remaining. Subsequently, the District Court
It is this ruling which forms the basis of the Tribe’s cross-appeal. 1

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certified its ruling as final under Rule 54(b). Although we agree with the Court’s

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conclusions, we hold that Turn Key’s entire complaint should not have been dismissed,

and remand for further proceedings.

At the center of this case is a Management Agreement executed by Turn Key

and the Oglala Sioux Tribe on November 30, 1994, and approved by the Chairman of

the National Indian Gaming Commission (NIGC) on December 7, 1995. Under the

terms of this Agreement, Turn Key was to develop, finance, construct, and manage a

gaming facility on Oglala Sioux tribal lands to be known as the Prairie Wind Casino.

All costs of constructing and equipping the project were to be advanced by Turn Key,

and repaid by the Tribe out of revenues from operations according to a set formula.

According to Turn Key, the project experienced significant cost overruns because of

the protracted process of receiving NIGC approval, inflation, and the added expenses

of opening temporary facilities. Turn Key insists that these overruns were discussed

with Tribe officials, and that in order to avoid the risk of further delays, it was orally

agreed that the parties would modify the Agreement after receiving NIGC approval.

By the time the Agreement finally received NIGC approval on December 7, 1995,

Turn Key had already spent a considerable amount of money, about $2.7 million, on

the project. In June of 1996, Turn Key sent a change order to the Tribe requesting that

it approve an increase in construction costs. The Tribe refused, and Turn Key ceased

work on the project. The Tribe then declared Turn Key in default, and, after a time,

terminated the Agreement. Turn Key filed suit alleging breach of contract and unjust

enrichment. The Tribe counterclaimed for breach of contract and breach of fiduciary

duty. 

The Indian Gaming Regulatory Act of 1988 provided a statutory basis for the

operation and regulation of Indian gaming, and established the National Indian Gaming

Commission (NIGC) to oversee Indian gaming. 25 U.S.C. §§ 2701-21. Among other

things, the Act permits tribes to enter into management contracts for the operation and
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management of gaming facilities, subject to the approval of such contracts by the

Chairman of the NIGC. 25 U.S.C. § 2711. A contract cannot receive approval from

the Chairman unless it provides certain minimal protections for the tribe. Id. Some

requirements are codified in the Act itself, and others are set out in the accompanying

regulations. See id.; 25 C.F.R. §§ 531.1-533.7. A few of those requirements are

relevant here. First, the contract must provide for an “agreed ceiling for the repayment

of development and construction costs.” 25 U.S.C. § 2711(b)(4); see 25 C.F.R.

§ 531.1(g). Second, the contract must contain a “representation that the contract as

submitted . . . is the entirety of the agreement among the parties.” 25 C.F.R.

§ 533.3(a)(2). In addition, the regulations mandate that any management contract that

does not receive approval is void, and that any attempted modification of an approved

contract that does not comply with the regulations and does not receive approval, is

also void. 25 C.F.R. §§ 533.7, 535.1(f). 

In keeping with these requirements, the management contract (hereinafter

“Agreement”) in this case stated that it encompassed the entire agreement between the

parties with respect to the subject matter thereof and that there were no other collateral

agreements or understandings except those contained therein. The Agreement

provided that it could not be changed orally, but only by an instrument in writing

signed by both parties and submitted by the Tribe for written approval to the NIGC.

The Agreement also provided that “the maximum agreed ceiling for development and

construction cost of all construction and equipping of the Project shall not exceed the

aggregate sum of $4,000,000.” 

While awaiting final NIGC approval of the Agreement, the parties entered into

several “interim agreements” which allowed gaming operations to begin in temporary

facilities erected on the site. There was a Rental Agreement, whereby Turn Key agreed

to provide the Tribe certain gaming equipment and other personal property, as well as

an Employee Agreement between Wayne Barber, a tribe member and officer of Turn

Key, and the Tribe, in which the Tribe employed Barber to manage the temporary
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gaming facility until the Agreement received NIGC approval. Both interim agreements

stated that they would end upon approval of the main Agreement by the NIGC, and

that thereafter the main Agreement would govern all rights and obligations of the

parties. Turn Key also asserts that there was an oral agreement with Tribe officials to

modify the $4,000,000 construction cost ceiling after it became obvious that this

amount would not adequately cover the full cost of construction. 

On appeal, Turn Key first argues that it was error for the District Court to refuse

to consider the content and effect of these interim agreements. Turn Key claims that

the common law of South Dakota should control the issue of whether it is proper for

the Court to look to these other agreements in order to determine the intent of the

parties. Although this may be the correct approach in ordinary contract disputes, in the

context of Indian gaming the directives of Congress, when made apparent, must

control. As the Court below pointed out, the integration clause, which is required by

the Act and regulations, prevents consideration of any prior or contemporaneous

agreements; and the no-oral-modification clause and the regulation’s requirements for

modifying management contracts preclude consideration of any subsequent agreements

not approved by the Chairman of NIGC. Accordingly, these other agreements can

have no effect with respect to any of the subject matter encompassed by the

Management Agreement. 

Turn Key next argues that it was error for the District Court to conclude that the

ceiling on construction costs applied only to the amount the Tribe is required to repay,

and not to the amount Turn Key is required to invest in the project. Turn Key claims

that this ruling improperly shifts the risk of cost overruns to it and is contrary to the

plain language of the Agreement and the intention of the parties. 

As noted above, the Act and regulations require that before the Chairman of the

NIGC may approve a management contract, it must include an “agreed ceiling for the

repayment of development and construction costs.” 25 U.S.C. § 2711(b)(4); see 25
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C.F.R. § 531.1(g). The ceiling provision in this case is mentioned several times in the

Agreement. First, section 3.3 states: 

No Agreement; Reimbursement of Manager. If an Agreement is not

approved, the Tribe specifically agrees to reimburse the Manager for the

costs of construction of any building and related costs . . . to the extent as

provided by § 11.2 herein. An amount of $4,000,000 is the ceiling

agreed upon in § 4.1(a)(1) for development costs for the Project. The

parties acknowledge that $4,000,000 is the maximum amount that will be

invested in the Project and to maximize financial returns to the Tribe,

Manager will endeavor to spend less on development. 

The provision is also mentioned in § 4.1(a), which provides in part:

The costs of all such construction and equipping of the Project shall be

advanced by Manager as its investment in the project, and repaid as a

Construction and Asset Acquisition Payment as contemplated in § 6.4(f).

The parties agree that the maximum agreed ceiling for development and

construction cost of all construction and equipping of the Project shall not

exceed the aggregate sum of $4,000,000. 

The third reference to the construction ceiling is found in § 6.4(f), which provides for

the creation of an “Construction and Asset Acquisition Account” to include all of the

expenditures by Turn Key in constructing, furnishing, and equipping the project. This

section goes on to direct that the balance of this account “as specified and limited in

§ 4, . . . shall be repaid to Manager . . . from the Manager’s fee and the Tribe’s share

as provided at § 6.5(b), and in the proportions set forth therein.” 

Turn Key insists that the clear import of these clauses indicates that the ceiling

was meant to apply both to the amount the Tribe would be required to repay and the

amount Turn Key would be required to invest. We do not agree. Such a construction
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is contrary both to the reason the Act requires a ceiling provision -- for the protection

of the Tribe -- and the obvious reason for placing a “limit” on Turn Key’s

“investment.” In our view, to the extent that the above clauses can be read as limiting

Turn Key’s investment, it is still a limit that is imposed for the protection of the Tribe.

As each clause indicates, the more Turn Key “invested” in the project, the more the

Tribe would have to pay back. This is why § 3.3 of the Agreement states that in order

to “maximize financial returns to the Tribe,” Turn Key “would endeavor to spend less”

on the project. Turn Key has not pointed to any other portions of the Agreement,

besides those discussed above, which would support its position, and we refuse to

convolute the Agreement to provide a protection to Turn Key that was not bargained

for.

Turn Key also appeals the dismissal of its complaint at the conclusion of the

District Court’s Memorandum Opinion granting the Tribe’s second motion for partial

summary judgment. Turn Key argues that its claims under Section 11.2(a) of the

Agreement, as well as its claims for unjust enrichment, should have survived. Section

11.2(a) of the Agreement provides, “if termination of this Agreement occurs for any

reason prior to the end of the Term, all costs which were incurred by [Turn Key] in the

performance of this Agreement and which have not been repaid as provided in [the

formula] shall be repaid to [Turn Key].” Turn Key’s Sixth Claim for Relief avers that

the Tribe owes it approximately $2.3 million for costs incurred prior to termination.

 In the alternative, Turn Key has also claimed unjust enrichment under its Fourteenth

Claim for Relief, based on the enhanced value of the Tribe’s property due to the

expenditures made by Turn Key on the project. These claims were not addressed in

the District Court’s Memorandum Opinion, and none of the legal conclusions reached

in that opinion would necessarily prevent these claims from going forward. We

therefore reverse the dismissal of Turn Key’s claims under Section 11.2(a) of the

Agreement and for unjust enrichment. 

Finally, we hold that the District Court did not abuse its discretion in certifying
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its judgment as final under Rule 54(b), and we therefore affirm on the Tribe’s crossappeal on this issue. 

On remand, the case should go forward on Turn Key’s remaining claims, as well

as on the Tribe’s counterclaim.

It is so ordered.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.