should have been, before the Chairman. It would prevent the Commission, in short, from
fully and properly performing its appellate function.

In short, nothing in 25 C.F.R. part 539 confines our review as Southwest would
have it. The motion for summary affirmance on the ground that Governor Flyingman’s
statement of reasons must fall outside of our consideration is denied.

D. AMENDMENT 11, HAVING BEEN PROPERLY AUTHORIZED UNDER THE

CHEYENNE AND ARAPAHO CONSTITUTION, WAS PROPERLY SUBMITTED TO.
THE CHAIRMAN FOR HIS REVIEW AND APPROVAL.

Finally, NIGC regulations put in place submission requirements for the
Chairman’s review and approval of amended management contracts. Some of these
requirements are designed to ensure that the amended contract submitted was properly
authorized by the tribal government. Thus, submission of the following is required:

(1) the amendment containing “original signatures of an authorized official of the
tribe and the management contractor;”
(2) a letter “signed by the tribal chairman, setting out the authority of an authorized
tribal official to act for the tribe concerning” the amendment; and,
(3) copies of documents evidencing the authority of an authorized tribal official to act
for the tribe.
25 C.F.R. § 535.1 (c)(1)-(3). The submission of Amendment 11 failed to satisfy these
requirements.

First, in April 2007, NIGC received a copy of the Amendment 11 with the
original signatures of Ida Hoffman, Speaker of the First Legislature, and the CEO of
Southwest. Speaker Hoffman is an elected official of the Tribes but, pursuant to the

Supreme Court’s holding in Jn re the Execution of Casino Gaming Management

20


proceedings that arise out of various statutes, but the Indian Gaming Regulatory Act is
not one of them. Fed. R. Civ. P. 81.

Southwest’s ability to intervene is governed by the Commission’s regulations, and
again the differences between parts 577 and 539 inform our action. The extended
adversarial process envisioned by part 577 explicitly contemplates intervention by
interested parties, and it thus provides both grounds for and a mechanism for
intervention. 25 C.F.R. § 577.12.

The summary proceeding envisioned by part 539, by contrast, does not
contemplate, and is silent about, intervention. It provides neither grounds for intervening
nor a mechanism for doing so. We could, therefore, deny the motion to intervene on this
procedural point alone. In the interests of justice, however, we decline to do so, and we
grant the motion.

Again, we are free to waive procedural regulations to promote the orderly
transaction of the agency’s business, if doing so does not prejudice the public, prevent us
from making a complete and informed determination, or prevent judicial review of our
decision. American Farm Lines, 397 U.S. at 538. Indeed, such a waiver is not reviewable
except upon a showing of substantial prejudice to the complaining party. Jd. at 539.

Here, we opt to allow Southwest to intervene and respond to Governor
Flyingman’s statement to again make the record that much more robust and to strengthen
our own decision-making. As the resolution of the case before us is of great importance
to the Tribes, we do not see how considering Southwest’s response, while remaining
within the 60 days allowed under 25 C.F.R. § 539.2 for making a decision, can work

prejudice on anyone. Southwest’s motion to intervene is therefore granted.

14


CERTIFICATE OF SERVICE

I hereby certify that on the 17" day of August, 2007, I served a copy of the
foregoing COMMISSION DECISION by facsimile and by certified mail, return receipt

requested, upon the following:

Darrell Flyingman, Governor

Cheyenne and Arapaho Tribes of Oklahoma
100 Red Moon Circle, P.O. Box 38

Concho, OK 73022

Ida E. Hoffman, Speaker of the Legislature
Cheyenne and Arapaho Tribes of Oklahoma
100 Red Moon Circle, P.O. Box 38
Concho, OK 73022

David Bearshield, Tribal Council Coordinator
Cheyenne and Arapaho Tribes of Oklahoma
100 Red Moon Circle, P.O. Box 38

Concho, OK 73022

James B. Druck, Chief Executive Officer
Southwest Casino Corporation

2001 Killebrew Drive, Suite 350
Minneapolis, MN 55425

Nelson W. Westrin

Honigman, Miller, Schwartz and Cohn, LLP
222 North Washington Square

Suite 400

Lansing, MI 48933-1800

Richard Grellner

439 N.W. 18" Street
Oklahoma City, OK 73103

23


million earned to 15% of the first $28 million and 10% of net revenue for amounts in
excess of $28 million. (See Administrative Record, Tab 16.)

The contract extension was a matter of strong political dispute within the Tribes.
The Governor had made known his opposition to Southwest and to any proposed
amendment and extension. He made known as well his refusal to execute any
amendment. (See Administrative Record, Tab 14, March 2, 2007, letter from Governor
Flyingman to Southwest.) Accordingly, the Tribal Council’s March 31 resolution also
authorized and directed the Tribes’ legislature to ratify the amendment “if the Governor
fails to sign and enter into the contract(s) or extension(s) as directed in these
resolutions. ...” (See Administrative Record, Tab 24, Exhibit A.)

On April 3, 2007, the Governor filed a challenge to the constitutionality of the
March 31 resolution, and thus to the validity of the adoption of the amended management
contract, in the Tribes’ District Court. Jn re the Execution of Casino Gaming
Management Contract with Southwest Casino and Hotel Corp., CNA-CIV-07-27. (See
Administrative Record, Tab 37, April 3, 2007, declaratory judgment pleadings.)

The Governor did not in fact sign the amended contract as directed by the March
31 resolution. Instead, on April 14, 2007, Ida Hoffman, the Speaker of the First
Legislature, signed the amendment. This “Amendment No. 11” extended the Southwest
management contract for two years until May 19, 2009, and set Southwest’s fee still
lower at 10% of net revenue up to $28 million and 15% of net revenue over $28 million.
The First Legislature ratified Amendment 11 and deemed it signed by the Governor. (See

Administrative Record, Tab 33, contract amendment.) Amendment 11 was submitted for


Contract, was not authorized to sign Amendment 11. The Supreme Court found that the
action taken by the Tribes’ Legislature in ratifying Amendment 11 “was invalid and
ineffective under the Constitution to cause any such contracts to be valid.” (See
Administrative Record, Tab 51).

Second, on May 9, 2007, NIGC received a letter from Speaker Hoffman setting
out her authority to act for the Tribes concerning Amendment 11. (See Administrative
Record, Tab 19.) Although the District Court determined that she had authority to act for
the Tribes, the Supreme Court has since ruled that her actions with regard to the contracts
with Southwest were invalid and ineffective under the Constitution. (See Administrative
Record, Tab 51.) The relevant regulation here also requires, however, that the letter
setting out the authority of the “authorized tribal official to act for the tribe” must be
signed by the tribal chairman, which Speaker Hoffman is not.

We read 25 C.F.R. § 535.1(c)(2) broadly in order to accomplish its purpose,
namely to assure the Chairman that the submission of, and the representations in, the
statement of authority are themselves authorized by tribal law. As the Chairman has
already noted, the title of the official making the statement is thus not particularly
relevant, be it “president,” “chief,” “governor,” or “town king.” (See Administrative
Record, Tab 12, p. 5.) Moreover, while officials providing the statement of authority are
typically executive branch officials, that is not strictly necessary. A tribal government
may not have an executive branch as such. However, the Tribes’ Supreme Court
determined that the First Legislature’s actions in authorizing Amendment 11 were not

constitutional. As such, the requirements of Section 525.1(c)(2) are not satisfied here.

21


It is so ordered by the National Indian Gaming Commission, this | Tday of August,

eg Gong _ a

ifip N. Hogen Cloyce V. Choney Norman H. DesRosiers
Chairman Commissioner Commissioner

22


(See Administrative Record, Tab 12, p. 5.) The Chairman’s May 18, 2007,
reconsideration, then, arose sua sponte (whether or not it also arose out of Speaker
Hoffman’s request), something the Chairman was well within his power to do. Trujillo v.
General Elec. Co., 621 F.2d 1084, 1086 qo" Cir. 1980) (“Administrative agencies have
an inherent authority to reconsider their own decisions, since the power to decide in the
first instance carries with it the power to reconsider.”) Albertson v. Federal
Communications Comm'n, 182 F.2d 397, 399 (D.C. Cir. 1950) (“The power to reconsider
is inherent in the power to decide ... in the absence of any specific limitation”). Beyond
this, the District Court’s decision is properly within the full Commission’s consideration
on this appeal, for we may take judicial notice of it. See, generally, 5 U.S.C. § 556(e).
However, since the District Court decision was issued, the Tribe’s Supreme Court has
overruled that decision and the Supreme Court’s holding is also properly before this
Commission.

Given all of this, we defer to the decision of the Tribes’ Supreme Court and
conclude, that Amendment 11 was not properly authorized under the Tribes’ constitution.

Cc SOUTHWEST’S MOTION FOR SUMMARY DISPOSITION IS DENIED.

Southwest’s response to Governor Flyingman’s statement of reasons is a motion
for summary affirmance for which it offers two arguments in support. On the one hand,
Southwest contends that the Commission should affirm the Chairman’s approval of
Amendment 11 because Governor Flyingman failed to properly and timely file this
appeal. On the other hand, Southwest argues that the Commission must affirm because its
review is limited to the record before the Chairman, and the decision of the Tribes’

District Court is dispositive therein. We find neither argument persuasive.

18


procedural ground alone. /d. (“Failure to file an appeal within the time provided by this
section shall result in a waiver of the opportunity for an appeal.”) We decline, however,
to do so.

First, under the circumstances presented here, the procedural non-compliance is a
slim reed upon which to hang a dismissal. Notwithstanding the absence of a formal
statement of reasons, the notice of appeal makes clear, if generally, the reason Governor
Flyingman believes the Chairman’s approval of Amendment 11 was in error. The
approval, he argues, was contrary to IGRA and tribal law, i.e., that Amendment 11 was
not properly approved under the Tribes’ constitution and therefore the Chairman
approved an invalid contract. (See Supplemental Record, Tab 1.)

Next, there is no indication in the record before us that the Governor’s reliance on
part 577 rather than part 539 was done in anything other than good faith. Finally, the
record reveals the importance of Amendment 11 to the Tribes. It indicates not only that
the extension of Southwest’s contract is a sharply contested political and legal issue, (see,
e.g., Administrative Record, Tabs 14, 16, 24 Exhibit A, 37), but also that the failure of the
management contract would obligate the Tribes, on short notice, to run their casinos
themselves after years of employing an experienced manager. (See, e.g., Administrative
Record, Tab 9, May 17, 2007, letter to Chairman Hogen requesting technical assistance
for the transition to tribal operation.) Accordingly, we will decide this appeal on its
merits.

As a general matter, an agency is free to waive procedural regulations such as
internal filing deadlines to promote the orderly transaction of the agency’s business, if

doing so does not prejudice the public, prevent the agency from making a complete and

10


accordance with the March 31, 2007, Resolution and the Constitution.” Jd. Governor
Flyingman appealed this decision to the Tribes’. (See Supplemental Record, Tab 1, notice
of appeal and attachment.)

Also on May 18, deferring to the decision of the District Court, the Chairman
reversed his previous decision and approved Amendment 11. (See Administrative Record
Tab 2, approval letter.) Recognizing the pending decision of the Supreme Court, he
wrote: “[I]f the tribal court order is reversed on appeal, I would have to reconsider my
approval and may void the contract.” Jd.

On June 14, 2007, the Governor filed the present appeal. (See Supplemental
Record, Tab 1, notice of appeal.) On July 31, 2007, Southwest moved to intervene. (See
Supplemental Record, Tab 8, motion to intervene.) On August 17, 2007, the Supreme

Court overturned the District Court’s decision. This decision followed.

DISCUSSION
I. PROCEDURAL MATTERS.
A. THOUGH GOVERNOR FLYINGMAN DID NOT INITIALLY MEET ALL OF THE
FILING REQUIREMENTS NECESSARY TO PERFECT HIS APPEAL, THE
COMMISSION CHOOSES, IN THE INTERESTS OF JUSTICE, TO WAIVE STRICT
COMPLIANCE AND DECIDE THIS APPEAL ON ITS MERITS RATHER THAN
DISMISS IT ON PROCEDURAL GROUNDS.
As a preliminary matter, we note that Governor Flyingman filed this appeal under
25 C.F.R. part 577 rather than 25 C.F.R. part 539. (See Supplemental Record, Tab 1,
notice of appeal.) Part 577 is inapplicable here. By its terms, part 577 applies to appeals

from notices of violation brought by the NIGC Chairman; from proposed civil fine

assessments for violations of IGRA, NIGC regulations, or approved tribal gaming


the Chairman’s review and approval shortly thereafter, both by Speaker Hoffman and by
Southwest. (See Administrative Record, Tab 33, and Tab 30, Southwest submission.)

Since Amendment 11 did not contain the Governor’s signature as required by the
Tribes’ constitution, the NIGC inquired with the Tribes about the propriety of Speaker
Hoffman’s signature. (See Administrative Record, Tab 22, May 7, 2007, letter from
Elaine Trimble-Saiz.) Speaker Hoffman replied that she had authority to sign contracts in
compliance with NIGC regulations and tribal law. (See Administrative Record, Tab 19,
May 9, 2007, letter.)

On May 16, 2007, reasoning that Amendment 11 was not executed in accordance
with the requirements of the Tribes’ constitution, the NIGC Chairman disapproved it.
(See Administrative Record, Tab 12, disapproval letter.) The Chairman’s disapproval
recognized that Governor Flyingman’s declaratory judgment action was still pending.
Accordingly, the Chairman wrote:

While I am prepared to reconsider this decision should the tribal court rule

to the contrary, I am compelled, under my understanding of the NIGC

regulations and tribal law, to disapprove the amendment to the contract.
(See Administrative Record, Tab 12, p. 5.)

On May 18, 2007, the Tribes’ District Court issued an order in Jn re the Execution
of Casino Gaming Management Contract, finding that the Tribal Council’s March 31
resolution and the execution of Amendment 11 were valid under the Tribes’ constitution.
(See Administrative Record, Tab 5, order.) In particular, the court found that Governor
Flyingman had negotiated the terms of Amendment 11, as the Tribes’ constitution
requires; that he did not have to sign the contract, a mere ministerial requirement; and

that the action taken by the First Legislature in ratifying Amendment 11 “was in


i. THE COMMISSION HAS WAIVED STRICT COMPLIANCE WITH THE FILING
REQUIREMENTS OF § 539.2 IN THIS APPEAL

For all of the reasons stated in section I.A. of this decision, Southwest’s motion
for summary affirmance on the ground that this appeal was not timely filed is denied.

ii. UNDER THE PLAIN TERMS OF 25 C.F.R. § 539.2, THE COMMISSION’S REVIEW
IS NOT STRICTLY LIMITED TO THE RECORD BEFORE THE CHAIRMAN.

Southwest argues that the District Court’s decision must be dispositive because
that decision was part of the record before the Chairman and because our review is
necessarily limited to that record under 25 U.S.C. part 539. With this, we disagree.

Part 539 contemplates a summary proceeding, but it does not, by its terms, strictly
limit the Commission to the record that was before the Chairman when deciding to
approve or disapprove a management contract. We reject that reading of part 539 for two
equally sufficient reasons.

First, reading 25 C.F.R. § 539.2 in this way is inconsistent with its plain and
unambiguous terms. Again, that section specifically requires that “an appeal under this
section shall specify the reasons why the person believes the Chairman’s determination to
be erroneous, and shall include supporting documentation, if any.” 25 C.F.R. § 539.2. A
reading that permits an appellant only to submit documentation that the Chairman already
considered makes the requirements of § 539.2 meaningless. The appellant ceases to be a
party advocating for his or her position and is relegated instead to a superfluous
administrative support staffer for the Commission, able to provide only such
documentation as the Commission already has.

Second, reading § 539.2 to preclude any document that was not originally before

the Chairman would prevent the Commission from considering material that was not, but

19


Part 539, by contrast, applies only to appeals from the Chairman’s approval or
disapproval of a management contract. It contemplates a summary determination by the
Commission on a written record. This format is better suited to the review of the narrow
question of whether the Chairman properly observed IGRA’s requirements for approving
or disapproving management contracts, 25 U.S.C. § 2711(b), (e). Accordingly, part 539,
unlike part 577, provides for an accelerated schedule.

Part 539 makes no provision for notice pleading. Rather, it requires the appellant
to file a notice of appeal and, at the same time, a statement that sets out the reasons why
the Chairman erred and that may attach supporting documents: “An appeal under this
section shall specify the reasons why the person believes the Chairman's determination to
be erroneous, and shall include supporting documentation, if any.” 25 C.F.R. § 539.2.
The Commission is then required to issue its decision within 30 days, or 60 if the
appellant consents to the additional time. Jd.

Here, because Governor Flyingman filed his appeal under 25 C.F.R. part 577 and
not under part 539, he filed only a notice of appeal and omitted a statement of reasons and
supporting documentation. Instead, he sought leave for additional time to file the
supplemental statement required by part 577. (See Supplemental Record, Tab 1.) He
reasoned that additional time would give the Tribes’ Supreme Court an opportunity to
decide his appeal in In re the Execution of Casino Gaming Management Contract and
thus address an issue central to the determination of this appeal, namely whether
Amendment 11 was properly executed under tribal law. Jd.

As a technical matter, then, Governor Flyingman’s appeal does not comply with

the requirements of 25 C.F.R. § 539.2, and thus we could bar his appeal on this


Robert Lyttle

P.O. Box 1189

Carefree, AZ 85377

Klint A. Cowan

Hobbs, Straus, Dean & Walker, LLP

117 Park Avenue, Second Floor
Oklahoma City, OK 73102

Mihe2 Cy

Michael C. Hoenig, Esq.
National Indian Gaming Commission
1441 L Street NW, Suite 9100

Washington, D.C. 20005

24


IN THE MATTER OF

The May 18, 2007, Approval of the Final decision and order
Gaming Management Contract between
the Cheyenne & Arapaho Tribes of August 17, 2007

Oklahoma and Southwest Casino and
Hotel Corporation

On appeal to the National Indian Gaming Commission (NIGC or Commission)
from an approval by the NIGC Chairman of a gaming management contract between the
Cheyenne and Arapaho Tribes of Oklahoma and Southwest Casino and Hotel

Corporation, 25 U.S.C. § 2711.

FINAL DECISION AND ORDER
After careful and complete review of the agency record; a statement of reasons on
appeal filed by Darrell Flyingman, Appellant and Governor of the Cheyenne and Arapaho
Tribes of Oklahoma (Tribes); and a motion to intervene by Southwest Casino and Hotel
Corporation (Southwest), the Commission finds and orders that:

1. Governor Flyingman timely filed this appeal, but did so mistakenly under 25
C.F.R. part 577 instead of 25 C.F.R. part 539.

2. In the interests of justice, the Commission chooses to decide this appeal on the
merits, and thus strict compliance with the filing deadline under 25 C.F.R.
§ 539.2 for Governor Flyingman’s statement of reasons and supporting
documentation is waived.


the DoD’s efforts to secure service from other carriers or the names and addresses of
other carriers that refused service. Id. at 537.

The Supreme Court, however, found that the ICC could waive this requirement.
The application regulations were promulgated for the purpose of providing the ICC with
information necessary to make an “informed and equitable decision” when acting on
applications for temporary authority. /d. at 538. Notwithstanding the statement’s
omission, the ICC had sufficient information to act. The record supported the ICC’s
finding that American Farm Lines’ service was required to meet DoD’s immediate and
urgent transportation needs, and it was sufficient to allow judicial review of the ICC’s
decision. /d. Moreover, the waiver did not prejudice the interested public. “The briefest
perusal of the objecting carriers’ replies, which cover some 156 pages in the printed
record of these appeals, belies any such contention.” Jd.

Accordingly, the Supreme Court concluded that the ICC’s waiver fell within the
general rule that it is always within the discretion of an administrative agency to relax or
modify procedural rules adopted for the orderly transaction of business before it when, in
a given case, the ends of justice require it. Jd. at 539. So too here.

Our ability to decide this case on its merits is helped, rather than hindered, by
waiving strict compliance with the one procedural requirement of 25 C.F.R. § 539.2 that
Governor Flyingman missed — submitting a statement of reasons and documentation
showing why he believed the Chairman erred in approving Amendment 11. Giving
Governor Flyingman a reasonable time for this submission makes the record before us,
and before any Court should the litigation continue that far, that much more robust and

complete. Likewise, we fail to see how complete consideration of the matter before us

12


informed determination, or prevent judicial review of the same. American Farm Lines y.
Black Ball Freight Svc., 397 U.S. 532, 538 (1970).

Thus, in American Farm Lines, the former Interstate Commerce Commission
(ICC) had the statutory ability to issue what it called “temporary operating authority” to a
freight carrier, without a hearing or any other proceedings, in what were effectively
emergency circumstances. The operating authority had to relate to a “service for which
there is an immediate and urgent need” and where there is “no [existing] carrier service
capable of meeting such need.” Jd. at 533-534. The ICC processed applications for
temporary operating authority under the former 49 C.F.R. part 1131.

Among other things, those rules required that an applicant provide supporting
statements of shippers that contain information “designed to establish an immediate and
urgent need for service which cannot be met by existing carriers.” Former 49 C.F.R.

§ 1131.2(c). In particular, a supporting statement had to contain some 11 items of
information, including whether the shipper made efforts to obtain service from existing
motor, rail, or water carriers; the dates and results of such efforts; the names and
addresses of existing carriers who failed or refused to provide the service; and the reasons
given for any such failure or refusal. Former 49 C.F.R. § 1131.2(c); American Farm
Lines, 397 U.S. at 534.

American Farm Lines applied for temporary operating authority and received it
over the objections of numerous other carriers. In the Supreme Court, these other carriers
argued that the ICC’s grant of authority was improper because it failed to follow its own
regulations. Specifically, while American Farm Lines’ application was supported by a

statement of an official of the Department of Defense (DoD), his statement did not detail

11


ordinances; from the Chairman’s orders of temporary closure; and from “an order voiding
or modifying a management contract subsequent to initial approval.” 25 C.F.R. §
577.1(a)(1)-(4). This last refers to those situations where the Chairman acts under 25
U.S.C. § 2711(f) to void, or to require a modification of, an existing management contract
that does not comply with the requirements of IGRA. By contrast, an appeal from the
Chairman’s approval or disapproval of an amendment to a management contract that
arises in the ordinary course of business between a tribe and a gaming manager is brought
under 25 C.F.R. part 539, which sets out this distinction:

This part applies to appeals from the Chairman’s decision to approve or

disapprove a management contract under this subchapter, except that

appeals from the Chairman’s decision to require modification of or to void

a management contract subsequent to his or her initial approval are

addressed in part 577 of this chapter.
25 C.F.R. § 539.1.

The appellate procedures envisioned by parts 577 and parts 539 are different. Part
577 requires an initial notice pleading in the form of a notice of appeal, followed no more
than ten days thereafter by a detailed supplemental statement “that states with
particularity the relief desired and the grounds therefor and that includes, when available,
supporting evidence in the form of affidavits.” 25 C.F.R. 577.3(c). An appellant may also
request a hearing and present testimony before a hearing official, who has the authority to
regulate the course and schedule of the hearing and to rule on evidentiary and procedural
motions. 25 C.F.R. § 577.7(a), (b). In short, part 577 contemplates an adversarial,

evidentiary appellate proceeding suited to reviewing actions by the Chairman taken in

many complicated and varied factual settings.


Third and finally, the Tribes’ Supreme Court has determined that Ms. Hoffman
did not have the authority to act on behalf of the Tribes. (See Administrative Record, Tab
51).
CONCLUSION
Given all of the foregoing, the Chairman’s May 18, 2007, approval of
Amendment 11, the amended gaming management contract between the Cheyenne and

Arapaho Tribes of Oklahoma and Southwest Casino and Hotel Corporation, is reversed.

22


constitution delegates specific powers to each branch. In particular, it addresses gaming
management contracts by requiring authorization by the Tribal Council, negotiation and a
signature by the Tribes’ governor, and ratification by the tribal legislature:

The Governor shall have the power to negotiate and sign a treaty,

compact, or gaming management contract which has been previously and

specifically authorized by the Tribal Council. No treaty, compact, or

gaming management contract shall be valid which has not been previously

authorized by the Tribal Council. Any treaty, compact, or gaming

management contract signed by the Governor shall be subject to

ratification by the Legislature.

(See Administrative Record, Tab 13, Constitution, Art. VII, Sec. 4(c).)

On February 24, 2007, the Tribal Council considered a resolution to authorize the
Tribes’ Governor, Darrell Flyingman, the Appellant here, to negotiate and sign an
amended management agreement with Southwest. At the time, Southwest was the
manager of the Tribes’ gaming operations and had been for a number of years. The
amendment would extend their existing contract, which was due to expire on May 19,
2007, and Southwest had proposed the amended terms to the Tribal Council in a meeting
of November 18, 2006. (See Administrative Record, Tab 16, May 14, 2007, letter of
David Bearshield, Tribal Council Coordinator; Tab 24, Exhibit A, March 31 Tribal
Council resolution.) Final approval by the Tribal Council would be contingent on a
subsequent vote to be held on March 31, 2007. (See Administrative Record, Tab 16.)

On that day, the Tribal Council held a special meeting. (See Administrative
Record, Tab 25, Exhibit C, resolution for special meeting.) It there adopted a resolution
authorizing and directing Governor Flyingman to sign and enter into an extension of the

gaming management contract with Southwest. The resolution also would require the

contract to reduce the fee paid to Southwest from 20% of net revenue for the first $28


IL. SUBSTANTIVE MATTERS

A. STANDARD OF REVIEW

Fundamentally, Governor Flyingman advances only one reason why the
Chairman erred in approving Amendment 11 and extending for two years the
management contract between the Tribes and Southwest. Amendment 11, he contends,
was not properly authorized under the Tribes’ constitution and is not a valid contract that
the Chairman could have approved. The propriety of the Chairman’s approval, then,
turns on a question of law, and our review is de novo.

Standards of review for administrative appeals within an agency are set by statute
or regulation. See, e.g., 5 U.S.C. § 557(b); NLRB v. A.P.W. Products, 316 F.2d 899, 904
(2" Cir. 1963); In Re S.H., 23 I. & N. Dec. 462 (Dep’t. of Justice, Board of Immigration
Appeals, Sept. 12, 2002); Windsor Health Care Ctr. v. Ctrs. for Medicare and Medicaid
Sves., DAB No. 1902 (Dep’t. of Health and Human Sves., Dec. 22, 2003). Having no
such standard mandated by IGRA, and having promulgated no such regulations, we
choose to follow the common practice and review questions of law de novo. See, e.g.,
Birdtail v. Rocky Mtn. Reg. Dir., Bureau of Indian Affairs, 45 IBIA 1, 5 (2007).

B. THE COMMISSION DEFERRS TO THE INTERPRETATION OF TRIBAL LAW BY THE
CHEYENNE AND ARAPAHO SUPREME COURT.

a Governor Flyingman does not challenge the propriety of the Chairman’s approval because of

anything that Amendment 11 contains. That issue is thus not before us. In any event, Amendment 11
provides only for a two-year extension of the existing gaming management contract and a reduction in
Southwest’s fee. As the Chairman found, its contents meet the requirements for approval of 25 U.S.C.
§ 2711.

Similarly, Governor Flyingman does refer, in passing, to investigations into Southwest’s alleged
undue influence on the Tribes’ government. (See Supplemental Record, Tab 7 Exhibit B, p. 3; Exhibit D,
pp. 8, 39). He does not, however, argue that the Chairman should have disapproved Amendment 11 under
25 U.S.C. § 2711(e)(2), which provides for mandatory disapproval upon a finding that the “management
contractor has, or has attempted to, unduly interfere or influence for its gain or advantage any decision or
process of tribal government relating to the gaming activity.” As such, that question is also not before us,
and any such investigations by the NIGC will proceed separate and apart from this appeal.

15:


governments”). Tribal courts play a vital role in tribal self government, and the Federal
government has consistently encouraged their development. Jowa Mutual, 480 U.S. at 15.

As a matter of practice, Federal courts hold that the exercise of Federal
jurisdiction over matters relating to internal tribal affairs can impair the authority of tribal
courts, and thus considerations of comity direct that tribal remedies should be exhausted
before a question is addressed in Federal district court. Nat'l Farmers Union Ins. Co. v.
Crow Tribe, 471 U.S. 845, 857 (1985). The same policy considerations apply here, and
the Commission will thus defer to the determinations of the tribal courts about the
meaning and proper interpretation of Cheyenne and Arapaho law.

Governor Flyingman contends that the decision of the District Court was not
properly before the Chairman. Speaker Hoffman, he contends, acted beyond the scope of
her constitutional authority and thus lacked standing to request of the Chairman, as she
did on May 18, 2007, that he reconsider his May 16 disapproval of Amendment 11.
Speaker Hoffman made her request on the basis of the District Court’s decision. (See
Administrative Record, Tab 3.)

We need not decide the question of Speaker Hoffman’s standing. The Chairman
was aware when he issued his May 16, 2007, disapproval that Jn re the Execution of
Casino Gaming Management Contract was pending in the Tribes’ District Court. He thus
specifically stated he might reconsider his disapproval if the District Court were to
conclude that Amendment 11 was properly authorized:

While I am prepared to reconsider this decision should the tribal court rule

to the contrary, I am compelled, under my understanding of the NIGC
regulations and tribal law, to disapprove the amendment to the contract.

Ef


STATUTORY, FACTUAL AND PROCEDURAL BACKGROUND

The Indian Gaming Regulatory Act (IGRA), 25 U.S.C. §§ 2701 et seq., deems the
establishment of Federal standards for gaming on Indian lands “necessary to meet
congressional concerns regarding gaming and to protect such gaming as a means of
generating tribal revenue.” 25 U.S.C. § 2702(3). One such concern is that each tribe be
the primary beneficiary of its gaming operation. 25 U.S.C. § 2702(2). In order to address
its concerns, Congress created the NIGC and gave it oversight regulatory authority for
gaming on Indian lands. 25 U.S.C. §§ 2702(3), 2704(a).

As part of that oversight authority, Congress granted the NIGC Chairman the
power and authority to approve gaming management contracts, 25 U.S.C. §§ 2705(4),
2710(d)(9), and set out various statutory criteria for approving and disapproving
contracts. 25 U.S.C. § 2711(b), (e). Congress, for example, limited management fees to
30% of net gaming revenue — 40% in special cases when permitted by the Chairman on
petition from a tribe. 25 U.S.C. § 2711(c). Management contracts that have not been
approved by the Chairman are void. 25 C.F.R. §533.7. First American Kickapoo
Operations, LLC. v. Multimedia Games, Inc., 412 F.3d 1166, 1168 (10" Cir. 2005).

In April 2006, the Cheyenne and Arapaho Tribes (“Tribes”) adopted a new
constitution that establishes four branches of government: the Tribal Council, the
Legislature, the Executive, and the Judicial. (See Administrative Record, Tab 13, Const.

of the Cheyenne and Arapaho Tribes, Art. II, § 2.)' Asa general matter, the new

' “Administrative Record” refers to the record of documents considered by the NIGC Chairman and
supporting his May 18, 2007, approval of the amended casino management contract between the Tribes and
Southwest. “Supplemental Record” refers to those additional documents submitted to, and considered by,
the full National Indian Gaming Commission in this appeal.


10.

11.

12.

In the interests of justice, and as the Commission chooses to decide this appeal on
as complete a record as possible, Southwest’s motion to intervene is granted.

Southwest’s motion for summary affirmance on the ground that Governor
Flyingman’s appeal was not timely or properly filed is denied because the
Commission has waived strict compliance with 25 C.F.R. § 539.2.

Southwest’s motion for summary affirmance on the ground that the Commission’s
review is strictly limited to the record before the Chairman is denied because 25
C.F.R. § 539.2. does not thus limit the Commission’s review.

25 U.S.C. § 2711 requires the NIGC Chairman’s approval for gaming
management contracts between Indian tribes and their management contractors.

In April 2007, the Tribes, by their Speaker of the First Legislature, Ida Hoffman,
submitted an amendment to the Third Amended and Restated Gaming
Management Agreement between the Tribes and Southwest, the so-called
“Amendment 11.”

Amendment 11 was signed by Southwest’s CEO and by Ms. Hoffman, in
apparent contradiction to the requirements of the Tribes’ constitution, Art. VII,
sec. 4(c).

The Tribes’ District Court, in Jn re the Execution of Casino Gaming Management
Contract with Southwest Casino and Hotel Corp., CNA-CIV-07-27, determined
that the action taken by the Legislature in ratifying Amendment 11 “was in
accordance with the March 31, 2007, Resolution and the Constitution.”

In approving Amendment 11, the Chairman properly deferred to the District
Court’s interpretation of the Tribes’ constitution, in accordance with Federal
Indian policy.

On August 17, 2007, the Cheyenne and Arapaho Supreme Court overruled the
District Court decision in Jn re the Execution of Casino Gaming Management
Contract with Southwest Casino and Hotel Corp., CNA-CIV-07-27. The
Supreme Court held that Amendment 11 was not validly entered into by the
Tribes because Amendment 11 was not signed by the Governor and that the
actions of the Legislature with regard to the contracts with Southwest were
invalid and ineffective under the Constitution to cause any such contracts to be
valid.

Amendment 11 was not properly submitted to the Chairman under 25 C.F.R.

§ 535.1(c) because following the decision of the Cheyenne and Arapaho Supreme
Court, Speaker Hoffman is not an authorized official of the Tribes and did not
have authority to act on behalf of the Tribes.

The Chairman’s May 18, 2007, approval of Amendment 11 is reversed.


would prejudice any other party with an interest in the outcome here. Allowing a
reasonable time to submit a statement of reasons places the case in no different posture
than if Governor Flyingman had filed his appeal under 25 C.F.R. part 539 in the first
place.

Accordingly, shortly after we received the notice of appeal, we directed our
appellate counsel to have Governor Flyingman correct the improper filing. We granted
him 30 days from the date of his notice of appeal, until July 18, 2007, to file a statement
of reasons and documentation. (See Supplemental Record, Tab 3, June 26, 2007, letter.)
In light of the request for additional time in the Governor’s notice of appeal, we sought
his consent, pursuant to 25 C.F.R. § 539.2, for an additional 30 days to issue our decision.
Governor Flyingman timely filed his statement of reasons and documentation and
consented to our request for additional time. (See Supplemental Record, Tab 6, letter, and
Tab 7, statement of reasons.)

B. THOUGH APPLICABLE REGULATIONS DO NOT PROVIDE FOR IT, THE COMMISSION
CHOOSES, IN THE INTERESTS OF JUSTICE, TO GRANT SOUTHWEST’S MOTION TO
INTERVENE IN THIS APPEAL.

On July 31, 2007, Southwest filed a motion to intervene in this appeal and
respond to Governor Flyingman’s statement of reasons and supporting documents. It
argues that it may intervene as of right under Fed. R. Civ. P. 24(a) or, in the alternative,
that it should be permitted to intervene under Fed. R. Civ. P. 24(b). Neither rule provides
Southwest with grounds to intervene, however, as neither rule is applicable. The Federal
Rules of Civil Procedure, by their terms, apply only to “govern the procedure in the
United States district courts in all suits of a civil nature, whether cognizable as cases at

law or in equity or in admiralty...” Fed. R. Civ. P. 1. They are also applicable to

13


By this appeal, Governor Flyingman seeks to relitigate the question of whether
Amendment 11 was properly authorized under the terms of the Tribes’ constitution. He
argues that the Chairman erred in approving Amendment 11 because it was not properly
authorized or executed under tribal law, the decision of the Tribes’ District Court to the
contrary in Jn re the Execution of Casino Gaming Management Contract with Southwest
Casino and Hotel Corp. notwithstanding. His statement of reasons incorporates and
reiterates all of the arguments he has made both before the Tribes’ District Court and
before the Tribes’ Supreme Court in that case: “As presented in our Statement of
Reasons... we respectfully incorporate by reference the substantive arguments contained
in each of the exhibits presented herein.” (See Supplemental Record, Tab 7 and Tab 7
Exhibits B — E.) Although we conclude that the Chairman was correct in deferring to the
May 18, 2007, decision of the District Court, the Cheyenne and Arapaho Supreme Court
has since overturned the District Court’s decision. The Commission defers to the
Supreme Court’s decision.

For the Commission to do otherwise would be to substitute its judgment about the
proper meaning and interpretation of tribal law for that of the Supreme Court. As a matter
of Federal Indian policy, that is inappropriate.

The Federal government’s longstanding policy is to encourage tribal self
government, and numerous statutes, including IGRA, embody this policy. Jowa Mutual
Ins. Co. v. LaPlante, 480 U.S. 9, 14 (1987); 25 U.S.C. § 2702(1) (“The purpose of this
chapter is 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

16