IN 'THE MATTER OF 

Coyote Valley Band of Porno Indians 1 

) August 30,2004 

1 

FINAL DECISION AND ORDER 

Appeal to the National Indian Gaming Commission ("NIGC" or "Commission") from 

a Notice of Violation ("NOV") and Temporary Closure Order ("TCO") issued to the Coyote 

Valley B:tnd of I'omo Indians ("Respondent" or "Tnbe"). This appeal is brought pursuant to 

the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. 5 2701 et. seq., and NIGC regulations, 

25 C.F.R Part 501, et. seq. 

Appearances 

W Conley Schulte for the Respondent, Coyote Valley Band of Pomo Indians 

John Hay for the Chairman, National Indian Gaming Commission 

Presiding Official 

Candida S. Steel, Office of Hearings and Appeals, U.S. Department of the Interior 

DECISION AND ORDER 

After carehl and complete review of the agency record, pleadings filed by both 

parties, the Chairman's decision upon expedited review, and the Presiding Official's 

Recommended Decision, the Commission finds and orders that: 

1. The NOV sets forth a permissible remedy to cure the violation. The measure selected 

by the Chairman to correct the violation was closure of the gaming operation. In an 

NOV, the Chairman has discretion to choose the "measure required to correct the 

violation" of the IGRA, as neither IGRA nor NIGC regulations prescribe certain 

remedies for specific violations. 
2. 'I'11e violation of lGRA in this instance was Class 111 gaming in the absence of an 

operative Tribal-State compact. In the NOV, the Chairman stated that the 'Tribe must 

cease all gaming to correct this continuing violation. Three days is a reasonable time 

to close the gaming operation ant1 thereby cure the violation. 

3. The reasonable time period for correction of a violation of IGRA set forth in an NOV 

begins to runs on the date the NOV is issued and served. 

4. Because xve find that closure is a permissible remedy and the proper remedy in this 

instance based on the record before us, we need not reach the question whether the 

enforcement action should be stayed pending the Tribe's attempts to obtain a 

compact. 

5. The Chairnlan has discretion to order the ten~porary closure of an entire operation for 

a substantial violation of lGRA. Mere, the Chairman acted within his discretion to 

order the closure of the entire operation. Based on the record before us, we are not 

persuaded by the Tribe's argument that it should be allowed to proceed with either 

Class 11 gaming or uncompacted Class 111 gaming. 

6. "Good cause" does not supercede or overcome IGKA's requirement that Class 111 

gaming is only authorized pursuant to an approved compact. 'Thus, based on the 

record before us, the closure order will not be rescinded pending approval of a 

compact between the Tribe and the State of California. 

7. Based on the record before us, the Tribe's argument that equities weigh in its favor to 

justify its operation of Class 111 gaming without an operative compact is unpersuasive 

and does not supercede or prevail over IGRA's mandate that Class 111 gaming occur 

only pursuant to a compact that is in effect. 

8. Accordingly, based on the record before us, closure of the casino was the appropriate 

remedy and, therefore, we make permanent the TCO. 

9. If there is a change of relevant and material facts or circumstances which are not now 

part of the agency record, then the Tribe may petition the Commission to rescind the 

permanent closure order and grant the Tribe permission to resume Class I1 andor 

Class III gaming. 

STATUTORY, PROCEDURAL, AND FACTUAL BACKGROUND 

The Coyote Valley Band of Pomo Indians of California ("Tribe") is a federally 

recognized Indian tribe with headquarters in Redwood Valley, California. See 67 Fed. Reg. 

46328. The Chairman of the NIGC approved the Tribe's Gaming Ordinance on November 7, 

1994. (Agency Record at Tab 1). 
The Tribe and California have been involved in some form of compact negotiations 

since 1932. ln the Matter of The C'c?).ote Vnllcy Wand ofPorno lntiian.~, NOV-04-01, CO-04- 

-4 

01 (July ;!9. 2004, Candida S. Steel, Presiding Official) at 2, Finding 2 ("Recommended 

Decision or Rec. Dec."). Despite failing to reach a compact, the Tribe opened the Shodaki 

casino while negotiations were on-going. ld. The Shodaki casino is on tribal lands located at 

7751 North State Street, Redwood Valley, California. See (Agency Record at Tab 23); 

NOV-04-01 at 3(B). In November 1994, the I'ribe began conducting Class 111 gaming 

without a Tribal-State compact, and continues to do so. See In re Gaming Related Cases, 

331 F.3d 1094, 1 109 n.6 (!Ith Cir. 2003). 

In 1988, Congress enacted the Indian Ciarning Regulatory Act (IGRA), 25 U.S.C. 

5 2701 et seq. IGRA "provitles a comprehensive regulatory framework for gaming activities 

on Indian country which seeks to balance the interests of tribal governments, the states, and 

the federal government." Senectc-C;r);ziga Tribe of Okla. v. Nut 'I Indian Ciaming C'omm 'n, 

327 F.3d 101 9, 1023 (1 Olh Cir. 2003), cert. denied, 2004 U.S. I~,EXIS 165 1 (U.S. Mar. 1, 

2004). IGRA authorized the creation of a three member National Indian Ciaming 

Commission, consisting of a Chairman appointed by the President and two associate 

members (Commissioners) who are appointed by the Secretary of the Interior. 25 U.S.C. 

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5 2704 (b)(l). The NIGC is charged with the administration and enforcement of the Act, and 

its powers include monitoring and shutting down unauthorized tribal games and 

promulgating regulations to implement IGRA. Id. at 5 2706; Seneca-Cuyuga Tribe of Okla., 

327 F.3d at 1023 (citing 25 U.S.C. $5 2705-06, 2713). IGM divides Indian gaming into 

three mutually exclusive categories: Classes I, 11, and 111. 25 U.S.C. 5 2703. The three 

classes differ as to the extent of federal, tribal, and state oversight. See 25 U.S.C. 5 2703(6), 

(7), and (8); see also Seneca-Cayuga Tribe of Okla., 327 F.3d at 1023. Class 111 gaming is a 

residual category, in that all gaming activity other than Class I and I1 is Class I11 gaming. 25 

U.S.C. 3 2703 (8). Indian tribes have the right to regulate Class 111 gaming on their lands 

concurrently with a State and the NIGC only pursuant to an approved Tribal-State Compact 

that is in effect. See 25 U.S.C. § 271 0 (d)(l); see also Recommended Decision at 3, Finding 

3; Seneca-Cayuga Tribe of Okla., 327 F.3d at 1024 (regulation of Class I11 gaming is shared 

by the tribes, the states, the NIGC, and the Department of Justice). 
lrr 1999, California's Governor Gray Davis conclucled compact negotiations with the 

Tribe, and a letter of intent to enter into the compact was signed by the Tribe on September 9. '44 

1999. See Rec. Dec. at 3, Finding 5. The California legislature ratified compacts with 

numerous tribes, including this Tribe, Coyote Valley, on September 10, 1999. Irl. (citing 

Chpt. 874, Statutes of 1999 (AB 1385, Batting); Cal. Gov't Code 9 1201 2.25)). Governor 

Davis signed the legislation into law on October 8, 1999. Id (citing Chpt. 874, Statutes of 

1999 (AE3 1385, Battin)). 

Shortly thereafter, however, the Tribe declined to sign the compact, requesting further 

negotiations on several issues in the compact. See Rec. Dec. at 3, Finding 6. When the State 

refused to negotiate, the Tribe sued the State for failure to negotiate a compact in good faith. 

Id. The 1J.S. District Court stayed all civil enforcement actions, and the Tribe continued to 

operate its Class 111 gaming facility, despite the absence of a compact, while the litigation 

was pending. Ill. at 3-4, Finding 6 (clting Unltecl Stcrtcs v 384 Electrorrlc Curnhling Dev~ccs, 

98-cw-1977 (N.D. Cal. Order of October 25,2000)). The District Court nded in favor of the 

State in the bad faith litigation, and the Ninth Circuit Court of Appeals affirmed. See Indian 

Gaming RelutetI Cases v. Calrfornia, 147 F. Supp. 2d 101 1 (N.D. Cal. 2001), afld, 331 F.3d 

1094 (9Ih Cir. 2003). On February 23,2004, the U.S. Supreme Court denied the Tribe's 

petition for writ of certiorari, In Re Indian Gunling Relured Cases, 124 S.Ct. 1412, 2004 

LEXIS 1064 (U.S. Feb. 23, 2004). 

On May 14,2004, the Secretary of the U.S. Department of the Interior received a 

letter from a California State Deputy Attorney General stating that no tribal state compact 

existed with the Tribe because the State had not received proof of ratification by the Tribe by 

October 1999. See (Agency Record at Tab 14). Further, after the Tribe's bad faith litigation 

concluded, the Tribe pursued two strategies for obtaining a valid compact. See Rec. Dec. at 

4, Finding 8. First, the 1999 compact was submitted to the Secretary of Interior for approval, 

and at her request, on June I, 2004, was resubmitted for review pursuant to IGRA, 25 U.S.C. 

9 2710(d)(8). Id. The Tribe also recommenced negotiations with the State of California for a 

new compact, meeting with State representatives on at least four occasions between March 

and May 2004. Id. 

On June 4, the Chairman issued Notice of Violation 04-01 to the Tribe, which gave it 

notice that it was in violation of the IGRA, NIGC regulations, and its own gaming ordinance 
for operating Class IT1 gaming devices and table games without a compact. See (Agency 

Record at Tab 23); NOV-04-01 at 3. Specifically, the NOV set forth that the Tribe was in 

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violation of: 

25 U.S.C. $ 2710(d)(l)(C) - Class 111 gaming activities 

shall be lawfi~l on Indian lands only if' such activities 

are conducted in conformance with a Tribal-State 

compact. 

25 C.F.R. 5 573.6(a)(ll) - Operation of Class I11 games in 

absence of a tribal-state compact is a substantial violation. 

Section 5 of the Coyote Valley Rand of Pomo Indians 

Gaming ordinance - Class Ill gaming shall be conducted 

In accordance with any tribal-state compact between the 

Tribe and the State, or any alternative thereto as provided 

By IGRA. 

Irl The NOV stated that to correct the continuing violation. the Tribe must "[cjease all 

gaming activities by noon on Monday, June 7: 2004." Jd. at 4 

When the casino remained open without a compact on June 7, the Chairman issued a 

TCO, requiring the 'Tribe to cease all gaming activities on the same date. See (Agency 

W Record at Tab 3 1 ); CO-04-01 at 4. The Tribe complied with the TCO by ceasing all gaming 

on June 8,2004. See Rec. Dee. at 5, Finding 10. On June 8, the Tribe requested that the 

Chairman conduct an expedited review of the TCO. See (Agency Record at Tab 33). In its 

petition, the Tribe argued that the TCO should be rescinded pending the Secretary's review of 

the 1999 compact between the Tribe and the State of California; that it be rescinded pending 

conclusion of negotiations on a new compact; and, in the alternative, that the closure order 

was too broad because it effectively prevents the Tribe from engaging in Classes I and I1 

gaming, which do not require a compact. Id.; Rec. Dec. at 5, Finding 10. 

On June 10, the Secretary disapproved the 1999 Compact filed on June 1 as invalid 

because the Tribe had failed to ratify it before the compact's October 9, 1999 deadline. See 

(Agency Record at Tab 38). In response, the Tribe brought suit regarding the Secretary's 

disapproval to the U.S. District Court for the Northern District of California pursuant to the 

Administrative Procedure Act, 5 U.S.C. $5 702-706, seeking declaratory and injunctive 
relief. Sc.e Coyote Vcrlley Band ofporno Indians v. Nrrt '1 Inclic~n Gaming C:omm 'rl, No. C-04- 

2337 JL (N.D. Ca1. Filed June 14, 2004).' 

** 

Also on June 10, the Chainnan issued a decision upon expetlited review, denying the 

'Tribe's request to rescind the TCO. Sce (Agency Record at Tab 39). The Chairman found 

that: 

(1) the Secretary had disapproved the Tnbe's 1999 compact; consequently, the 

Tribe's argument that the I'CO should be rescinded pentl~ng approval of that 

compact was moot; 

(2) the Tnbe's bad faith litigation had concluded and the Tribe must comply with 

IGRA and cease gaming; and 

(3) IGRA authorized the closure of the entire gaming operation for the violation at 

issue and, in this case, closure was the proper remedy. 

If]. 

Further, on June 10, the Tribe filed an appeal with thc (:ommission ancl requested a 

hearing on the NOV and TCO. Scc (Agency Record at Tab 40). The case was assigned to 

Candida S. Steel, Presiding Official at the U.S. Department of the Interior, Office of 

Hearings and Appeals, for a hearing and a recommended tlecision pursuant to 25 C.F.R. 55 

577.4 (a) and 577.14 (a). 

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On June 25, the U.S. District Court for the Northern District of California issued an 

order ~anting the Tribe's motion for a preliminary injunction, enjoining enforcement of the 

TCO for sixty (60) days until August 24,2004. See Coyote Vulley Bund of Pomo Indians v. 

Nut '1 Indian Gaming Comm 'n, No. C-04-2337 JL (N.D. Cal. June 25,2004) (order granting 

preliminary injunction). Thus, the NIGC and the Secretary were enjoined from prohibiting or 

taking any action to inhibit Class III gaming on the Tribe's reservation. Id. at 17. However, 

the preliminary injunction order explicitly stated that "this preliminary injunction does not 

affect the parties' obligations regarding review of the TCO."~ Id. 

' The NIGC and the Chairman are also named defendants in this lawsuif which asserts four claims: (I) that the 

NIGC and the Chairman failed to give the Tribe a reasonable time to correct the asserted violation of IGRA; (2) 

that the NIGC and the Chairman acted arbitrarily and capriciously by ordering the cessation of all gaming in 

order to correct the violation of the lack of a Class I11 compact; (3) that good cause exists to rescind the TCO; 

and (4) the Secretary's disapproval of the 1999 compact is arbitrary and capricious. See Coyote Valley Band of 

Pomo Indians v. Na1'1 Indian Gaming Comm 'n, No. C-04-2337 JL (N.D. Cal. Filed June 14, 2004). 

2 We are aware that on August 19, 2004, the Tribe and the Governor of the State of California reached 

agreement on a Tribal-State compact for Class 111 gaming, which has not yet been approved by the State - legislature or Secretary of the Interior; and that on August 24, 2004, the U.S. District Court for the Northern 

/ 
On July 7, a hearing on the Tribe's appeal of the NOV and 'I'CO was held before the 

Presitling Official ant1 the record was closed on July 16, 2004. See Rec. Dec. at 6, Finding 

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14. At the July 7 hearing, the parties stipulated that the Tribe was and is con(1ucting Class 111 

gaming at the Shodaki casino, and that no Tribal-State compact involving the Tnbe and the 

State of (lalifomia has been approved and published in the Federal Register. See Hearing 

Transcript at 4-5. 

On July 29, the Presiding Official issued a Recommended Decision, concluding "that 

the NOV [for operating Class 111 gaming without a compact] be modified to require 

correction [of the violation] by submission of a current State-Tribal Class 111 compact to the 

Secretary of the interiorw and that the TCO "be suspended unless and until the Tribe fails to 

secure such a compact and its approvals" by September 3, 2004. See RCC. Dec. at 12-1 3. 

Both parties filed objections to the Recommended Decision. See Chairman's 

017jections to the Presiding Official's Recommended Decision (August 4, 2004); 

I<espontlent's Objections to the Presiding Official's Recommendetl Decision (August 9, 

2004). 

DISCUSSION 

Burden of Proof and Standard of Review 

In administrative appeals of enforcement actions undertaken pursuant to 25 C.F.R. 

Part 573, the Chairman bears the burden of proof and the standard of review is 

preponderance of the evidence. In the Matter of JPW Consultants, NIGC 97-4; NIGC 98-8; 

(Nov. 13, 1998) (citing In the Matter of Shingle Springs Band of Mewok Indians, NIGC 97- 

I, Dec. 3, 1998). 

Preponderance of the evidence is the degree of relevant evidence that a reasonable 

person, considering the record as whole, would accept as sufficient to find that a contested 

District of California granted the Tribe's request for an extension of the preliminary injunction, enjoining the 

NIGC From taking any action to inhibit Class 111 gaming on the Tribe's reservation pending the state's 

ratification and the federal register publication of the compact behveen the Tnbe and the State of California. 

See Coyote Valley Band ojPomo Indians v. h'at'l Indian Gaming Comm 'n, No. C-04-2337 JL (N.D. Cal. 

August 24, 2004) (Order Granting Miscellaneous Administrative Request for Extension of Preliminary 

Injunction). However, the District Court recognized that "this preliminary injunction does not affect the 

parties' obligations regarding review of the TCO. Coyote Valley Band of Porno Indians v. Nar '1 Indian 

Gaming Comm 'n, No. C-04-2337 JL (N.D. Cal. June 25,2004) (order granting preliminary injunction). The 

regulations require the Commission to issue a final decision, and we do so based on the record before us, which 

does not include evidence of or arguments regarding these subsequent facts. See 25 C.F.R. FJ 577.15, 

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fact is more likely to be true than untrue. Id. at 4. Since the violation alleged in the NOV as 

the bas~s for the TCO is conceded and not contested by the partles, ive find the violation to be 

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tn~e for pllrposes of deciding the issues raised on appeal. 

In an NOV, the Chairman has discretion to choose the remedy for a 

violation. The Chairman chose closure as the remedy. Three days is a 

reasonable time period to close a gaming operation. 

The Tnbe urges the Commission to find that the Tnbe may cure the violation by 

obtaining an approved compact. See Supplemental Statement in Support of Coyote Valley 

Rand of Pomo Indians' Appeal ofNOV-04-01 and CO-04-01 ("Supp. Stmt.") (June 21, 

2004) at 8. 'Phe Presiding Official agreed with the Tribe, recommending that because the 

Chairman issued the NOV and TCO separately, the Tribe may cure the violation by obtaining 

a compact. In the Recommended Decision, the Presiding Official found: 

If the NIGC feels that the violation is serious enough for the casino to be closed 

immediately, it can issue a simultaneous notice and closure order. But where, as 

here, the Chairman issued a Notice of Violation that includes a period of time 

wlthin which the tribe may correct a violation, that notice implicitly accepts that 

securing of an approved compact is an acceptable alternative method of 

correction, and that closure is not the only recourse. 

See Recommended Decision at 12. We disagree and reverse the finding of the Presiding 

Official. 

Both IGRA and NIGC regulations provide the Chairman discretion to choose the 

remedy to correct a violation. IGRA provides that when the NIGC has reason to believe that 

a violation, which may result in permanent closure, exists, it must "provide the tribal operator 

or management contractor with a written complaint stating the acts or omissions which form 

the basis for such belief and the action or choice of action being considered by the NIGC." 

25 U.S.C. $271 3(a)(3). IGRA also grants the Chairman separate power to order the 

temporary closure of a gaming operation. 25 U.S.C.5 271 3(b). 

NIGC regulations further provide that this complaint, which the NIGC refers to as an 

NOV, must set forth the measures required to correct the violation. 25 C.F.R. $ 573.3(b)(3). 

NIGC regulations also dictate that both failure to correct a violation within the time permitted 

in an NOV, and the conduct of Class 111 gaming without benefit of a compact are substantial 

violations that warrant closure. 25 C.F.R. $5 573.6(a)(I) and (1 1). Thus, the regulations 

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show that the method of correction is within the Chairman's discretion. 'Taken together, the 

statute ant1 regulations set forth an enfbrcement scheme under \vhich the Chairman chooses 

u 

the "meacure" necessary to correct the violation, and provides not~ce in an NOV to the 

alleged violator that a violation exists and how to correct it. Neither IGRA nor the 

reglilations dictate specific measures for particular violations. Thus, the Chairman had clear 

discretionary authority to select closure as the remedy. 

Iri atldition, we disagree with the Presiding Official's recommended finding that the 

NOV is superfluous when the remedy is closure if it is not simultaneously issued with the 

TCO. As set forth above, IGRA requires that the NIGC provide a "written complaint stating 

the acts or omissions which form the basis for the violation." 25 U.S.C. 5 271 3(n)(3). IGRA 

also grants the Chairman separate power to order the temporary closure of a gaming 

operation. 25 U.S.C. 9 271 3(b). Neither the statute nor the regulations provide that when 

closure is the C:hairrnan's chosen remedy, he shall issue the NOV and TCO sin~ultaneously. 3 

The Act contemplates two actions - notice and closure, which are not dependent on 

each other and need not be issued together. The Chairman may issue a NOV and a 

subsequent TCO or issue them ~irnultaneousl~.~ This decision is wholly within his 

discretion. 'The NOV, as the Presiding Official recognizes, puts a tribe on notice that the 

Chairman is aware of a violation, and provides for a reasonable time to correct the particular 

violation. See Rec. Dec. at 10. In essence, in cases involving substantial violations, it allows 

for voluntary compliance short of the more drastic action of the issuance of a TCO. Indeed, 

here the NOV provided the Tribe an opportunity to correct the violation short of a TCO, 

namely a voluntary cessation of the Class 111 operation. However, when the Tribe did not 

comply with the NOV, the Chairman issued the TCO. See Rec. Dec. at 5, Finding 10. 

Furthermore, the issuance of a TCO is distinct from that of a NOV in that the TCO creates a 

3 In our Commission Decision in In the Matter of Santee Sioux Tribe of Nebraska, NOV-96-01, CO-96-01 (July 

3 1, 1996, Commission Decision) we issued an NOV for uncornpacted Class III gaming, followed by a TCO. Id. 

at 2. 

For that matter, the Chairman may choose to issue a civil fine instead of or in addition to closure. See 25 

U.S.C. 2713(a)(I) and 25 C.F.R. Part 575. 
separate right to expedited review not created by the issuance of an NOV. See 25 C.F.R. 

$573.6(c 1'. 

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The Cha~rrnan relied on two distinct subsections of the NIGC closure regulation to 

support his action. (Azency Record at 7'ab 31); TCO-04-01 at 4 (A) and (D). Both of these 

subsections slipport the Chairman's decision to issue the TCO subsequent to the NOV. The 

first subsection provides that. "Simultaneously with or subsequently to the issuance of a 

[NOV] . .the ('hairman may issue an order of temporary closure of all or part of an Indian 

gaming operation if.. .a gaming operation operates Class 111 games in the absence of a tribalstate cornpact that is in effect.. ." 25 C.F.R. § 573.6(a)(11). This subsection makes clear 

that when the violation is uncompacted Class 111 gaming, a TCO may issue either after or at 

the same time as the NOV. Jlere, the Chairman followed this regulation when he issued the 

NOV first and the TCO second. To find that the NOV is superfluous ignores the 

"subsequently to" language of 25 C.F.R. $5 573.6(a) 

The Chairman also relied on section 573.6(a)(l)(i). This section has more general 

:ipplicability, and provides that a closure order may issue if a tribe fails to correct any 

violation within the time permitted in a notice of violation. 25 C.F.R. 5 573,6(a)(l)(i). 

IJnder this subsection of the closure regulation, an NOV and TCO could not issue 

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concurrently because this subsection assumes that an NOV will issue, and that a TCO may 

issue some time later if the tribe fails to correct the violation. This process gives a tribe an 

opportunity to voluntarily correct a violation short of closure. Here, when the Tribe failed to 

close the casino in the time required by the NOV, the Chairman issued the TCO, an action 

well within his authority under the regulations.6 

Moreover, case law provides that it is within an agency's discretion to fashion an 

appropriate sanction. In a case with strikingly similar facts, the Eighth Circuit Court of 

Appeals declined to find the National Credit Union Administration's (NCUA) choice of 

remedy arbitrary, capricious, or an abuse of discretion. Oiciyapi Federal Credit Union v. 

National Credit Uniotr Adntinistration, 936 F. 2d 1007 (8th Cir. 1991). The case involved 

"Within seven (7) days after senrice of an order of temporary closure, the respondent may request, orally or in 

writing, informal expedited review by the Chairman. " 25 C.F.R. $ 573.6(c). The regulations provide a detailed 

procedure for the expedited review. 25 C.F.R. $5 573.6(~)(1)-(3). 

6 We note that while the Chairman relied on both subsections of the closure regulation, he could have relied on 

one or the other alone. 

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multiple violations of the Federal Credit Union Act occ~lmng at the Oiciyapi Federal Credit 

llnion (Credit Union). a bank located on the Rosebucl Indian reservation in Rosebud, South 

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Dakota. Jcl. at 1008. Following the issuance of a warning letter with a date by which to 

correct the violations. and following several intervening years (luring which the violations 

continuecl, the NCIJA issued a Notice of Intent to Suspend Charter and Place into 

involuntary 1,iquidation. The Credit Union requested a hearing, which was held before an 

Administrative 1,aw Judge (A1,J). 'The ALJ found that all but one of the violations existed, 

but recon~mended a different remedy than that set forth in the Notice of Intent. The ALJ 

recommended that the Credit Union's charter be suspended for sixty (60) days, or until the 

violations were remedied. He further recommended that if the Credit Union did not achieve 

compliance by the end of the sixty-day period, the charter be revoked. 

The NCUA declined to adopt the ALJ's proposed remedy and instead suspended the 

C'retlit IJnion's charter intlefinitely ant1 liqui(lated the C:redit IJnion. Id. On review. the 

Eighth C:~rcrlit Court of Appeals held that the remedy chosen by the NCUA was "within its 

statutory authority" in that the governing statute authorizes the NCUA to "suspend, revoke or 

liquidate a credit union.. .". Id. at 101 2. The Eighth Circuit found that, while it may not have 

u chosen the same remedy, the remedy the NCUA chose was within its statutory authority. Id. 

at 1009. Ilence, the Eighth Circuit further concluded that while the ALJ's recommended 

decision becomes part of the record that goes to the NCUA, the NCUA renders the final 

agency action. Id. 

The facts in Oicljiapi are remarkably similar to those at issue here. In Oiciyapi, the 

agency tried unsuccessfully to obtain voluntary compliance, and finally notified the Credit 

Union of its intent to liquidate it. Liquidation was a remedy available to the NCUA from 

among several provided for in its governing statute. Id. at 1012. Here, the Chairman tried 

unsuccessfully to obtain voluntary compliance and ultimately ordered closure of the casino, a 

remedy available to him under IGRA. In Oiciyapi, a hearing was held before an ALJ, a 

quasi-judicial officer similar to a Presiding Official. The ALJ recommended a remedy 

different from that chosen by the NCUA, much like the Presiding Official recommended a 

remedy different from that chosen by the Chairman in this matter. The Oiciyapi court upheld 

the NCUA's choice of remedy as wholly within its statutory authority and discretion. Id. at 

1009. The same finding is warranted on the facts at issue here. 

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Furthermore, the U.S. Supreme Court has held that courts should not disturb an 

agency's choice of sanction unless it is either "unwarranted in law or.. .without jr~stification 

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in fact." I!utz v. Glover I,ivestock C,'ot7im 'n C'o., 41 1 U.S. 182, 185-1 86 (1 973). "Where 

Congress has entrusted an administrative agency with the responsibility of selecting the 

means of achieving the statutory policy the relation of remedy to policy is peculiarly a matter 

for administrative competence." Id.; see ulso JVonsover v. Secrrriies ~nd Exch(ltrge Comm 'n, 

205 F.3d 408, 4 16 (D.C. Cir. 2000) (citing O 'I,etlry v. SEC', 424 F.2d 908, 9 12 (11.C. Cir. 

1970) ("sanction fell within the spectrum of the Commission's statutory authority.. . and 

choosing a point on that spectn~m is a determination left to the Commission.)); J4agic Valley 

Potcrio Shippers, Inc. v. Secretury ofAgriczrlture, 702 F.2d 840, 842 (9Ih Cir. 1983) ("The 

fashioning of an appropriate remedy is for the Secretary of Agriculture and not for the 

court."). 

In atl(lition to arguing that it should be allowed to cure the violation by obtaining a 

compact, the Tribe argues the Chairman violated NIGC regulations by failing to give the 

Tribe a reasonable time to negotiate ant1 achieve an approved compact. See Supp. Stmt at 10. 

The Chairman asserts that he gave the Tribe ample warning of the violatjon and opportunity 

to comply prior to issuance of the NOV. ,See Chairman's Reply to Respondent's w 

Supplemental Statement at 5; Hearing 'Transcript at 29-30. The Presiding Official found that 

the "reasonable time" must nln from the date of the NOV. See Rec. Dec. at 1 1. We agree 

with the Presiding Official in this regard and find that the reasonable time period for 

correction of a violation of IGRA set forth in an NOV begins to run on the date the NOV is 

issued and served. 

NIGC regulations require that the NOV "contain a reasonable time for correction, if 

the respondent cannot take measures to correct the violation immediately." 25 C.F.R. 

5 573.3(b)(4). Regarding issuance of a TCO, the regulations provide that an order of 

temporary closure may issue if the respondent fails to correct a violation "within the time 

permitted in a notice of violation." 25 C.F.R. 3 573.6(a)(l)(i). These regulatory provisions 

make it clear that the clock begins when the NOV is issued. We recognize that NIGC policy 

encourages voluntary compliance, and enforcement is a last resort to gain that compliance. 

In that regard, attempts to gain compliance are favored, and evidence of such is properly 

included in the agency record. However, those efforts camot influence the determination as 
to what is a "reasonable time for correction" following the issuance of an NOV. We find that 

"reasonable" relates to how cluickly the measure chosen for correction can be practically 

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accomplishetl, regardless of prior agency attempts to gain compliance. 

In this case, we find that three days was a reasonable time to effectuate closure of the 

casino. I'he NOV was issued on June 3,2004, ant1 gave the Tribe until June 7,2004, to close 

its operation. When it ditl not close pursuant to the NOV. the Chairman issued a TCO on 

June 7, 2004. The Tribe closed its operation on June 8. 2004, a (late four days following the 

issuance of the NOV and one clay following issuance of the TCO. By its actions in 

immediately closing the casino after receipt of the TCO, the Tribe substantiates our finding 

that three days is a reasonable time to accomplish closure. 

Because we find that closure is a permissible remedy and proper in this 

instance, based on the record before us we neeti not reach the question 

whether the enforcement action should be stayed pending the Tribe's 

attempts to obtain a compact. 

The Tribe argues that the NOV and TCO must be stayed pending its good faith efforts 

to obtain a compact. Because we find that the Chairman was within his discretion to choose 

:W closure of the casino as the remedy, we need not reach the question whether the action should 

be stayed pending the Tribe's attempts to obtain a compact. The achievement of a compact 

was not the remedy chosen by the Chairman. 

Nevertheless, we are compelled to address the Tribe's erroneous reliance on U.S. v. 

Spokane Indian Tribe, 139 F.3d 1297 (9Ih Cir. 1998), for the proposition that the NIGC 

cannot take enforcement action against a tribe engaged in non-compacted Class 111 gaming. 

See Supp. Stmt. at 8. The Spokane court did not make such a broad holding. What it found 

was, "[ulnder the circumstances, IGRA7s provisions governing Class 111 gaming may not be 

enforced against the [Spokane] Tribe." Id. at 1302. The circumstances at issue were that the 

State of Washington had invoked its Eleventh Amendment right to sovereign immunity7 and 

the tribe had applied to the Secretary of the Interior, without success, to prescribe regulations 

to govern compact negotiations given that the state failed to negotiate. 

'See Seminole Tribe ofFlorida v. Florida, 517 U.S. 44 (1996). As to the Tribe at issue in this case, the State of 

California did not invoke its Eleventh Amendment right. 

w 
The circumstances at issue here are distinguishable frorn those at issue in Spokune. 

'The State of California did not invoke the Eleventh Amendment. In fact, the Tribe brought 

w 

suit against the State for bad fa~th compact negotiations, anci the case was litigated to the U.S. 

Supreme Court. The Ninth Circuit Court of Appeals ruled against the Tribe, finding that the 

State had not negotiated in bad faith, hl re Indlart G'or~t~~tg Relutcil (,'ascs, 33 1 F.3d 1004 (91h 

Cir. 2003), and the U.S. Supreme Court denietl the Tribe's petition for writ of certioriari. See 

Coyote Pillley R(1nc1 ofPomo 1llciic1tr.r v. Crrllforr~iu, 2004 1J.S. LEXIS 1064 (U.S. Feb. 23, 

The Tribe also relies on a Presiding Official's decision to stay enforcement 

proceedings in In the Mfitter (4 Shot~hvcrter Buy Indrcin 7?1he, NlGC 99-2, (Order Deferring 

Decision and Staying Proceed~ngs on Reconsideration Motion) (August 23, 2001). We agree 

with the Chairman that because Presiding Officials clo not issue final decisions, but merely 

make recommendations to the Commission which it may reject or accept, their decisions 

have no precedential effect. See Chairinan's Reply to Respondent's Supplemental Statement 

(June 29, 2004) at 10. Moreover, we further agree with the Chairman that our decision in In 

the Matter ofSeminole Nation of Oklahomm, CFA 00-06, CFA 00- 10, (Notice of Decision 

and Order) (Jan. 7,2003), is binding precedent. Id. In that case, we overturned a Presiding 

*ur 

Official's decision to stay proceedings pending a district court ruling in an underlying case. 

We held: 

It is the policy of the [NICC] that Temporary Closure and related 

Civil Fine Assessment actions proceed quickly to ensure that their 

deterrent effect is not diminished. If the Civil Fine proceedings 

were to be stayed until the underlying actions were concluded in 

federal court, any resulting fine would have little or no effect over 

wrongful conduct. This result would be contrary to the goals, policies, 

and purposes of IGRA and the Commission. 

Id. at 7 2. We further agree with the Chairman that "lilt is simply incomprehensible that an 

enforcement action be stayed until the Respondent comes into compliance. Such a position 

simply ignores the purposes of IGRA." See Chairman's Reply to Respondent's 

Supplemental Statement at 10. 
The Chairman has discretion to order a temporary clos~~re of an entire 

u operation for a substantial violation of IGRA. Here, the Chairman acted 

within his discretion to order the closure of the entire operation. Rased on 

the record before us, we are not persuaded by the Tribe's argument that it 

shol~ld be allowed to proceed with either Class 11 gaming or uncompacted 

Class IJI gaming. 

The Tribe appealed the Clhairman's issuance of the TCO, contending that it 

unlawfully prohibits the Tribe from operating Class I1 gaming. See Supp. Stmt at 12- 13. 

The Presiding Official found that "the Chairn~an can close an entire operation, not just a 

particular class of gaming." Recommendetl Decision at 1 o.~ We affirm this finding. 

The Indian Gaming Regulatory Act provides that: 

The Chairman shall have power to order temporary closure of an Indian game 

for substantial violation of the prov~sior~s of this chapter, of regulations 

prescribed by the Cornrn~ssion pursuant to thls chapter, or of tribal 

regulations, ordinances, or resolutions approved under section 271 0 or 271 2 of 

this title. 

25 U.S.C. fj 2713 (b)(l). Under the Act, Class I11 gaming is onIy lawful on Indian lands if it 

'( Y is "conclucted in conformance with a Tribal-State compact entered into by the Indian tribe 

and the State. . . that is in effect." See 25 1I.S.C. Ij 2710 (d)(l)(C). A compact "shall take 

effect only when notice of approval by the Secretary of such compact has been published by 

the Secretary in the Federal Register." Id. at (d)(3)(B) (emphasis added). Thus, Class Ill 

gaming in the absence of an operative Tribe-State compact is a violation of the Act. 

The plain language of NIGC regulations supports our conclusion that the Chairman 

possesses the discretion to order the closure of an entire gaming operation when a tribe 

operates Class 111 games without an operative compact. See In The Matter of Santee Sioux 

Tribe of Nebraska, NOV-96-01, CO-96-01 (Commission Decision) (July 3 1, 1996) at 1 1 

("the Chairman has discretion in issuing an order of temporary closure"). Specifically, 25 

C.F.R. $ 273.6 (a) directs: 

In addition, the Presiding Official was "persuaded that when the Government inspected the Casino on June 7, 

2004, most of the games were Class 111 games" and that the NlGC closed the entire operation because, in part, it 

"wanted to prevent the Tnbe from bringing in games that have not yet been definitively determined to be Class 

I1 rather than Class 111 games." Rec. Dec. at 12. Consequently, the Presiding Official determined that "[tjhis is 

not an unreasonable burden on the Tnbe in light of the fact that if it reopens with Class I1 games it procures in 

the future, it will be on notice that it will have to purchase games which will pass muster with the NIGC." Id. 

YlrC 
the Chairman may issue an order of temporary closure of all or part of an 

Indian gaming operation if one or more of the follo\ving substantial violations 

;ire present: . . . (1 1) A gaming operation operates class 111 games in the 

absence of a tribal-state compact that is in effect, in violation of 25 U.S.C. 

2710 (d). 

25 C.F.R. 5 273.6 (a) (emphasis added). 

Courts accord NIGC regulations deference. See, c..g.. ,Scnccn-C'r~j.ug(~ Trihe of Okla. 

v. Nnt '1 India,? Gaming Con~rn 'n, 327 F.3d 101 9, 1037 ( 10'" Cir. 2003), cwt. denied, 2004 

U.S. LEXIS 1651 (U.S. Mar. 1,2004); UnitedStates v. 162 Megurntrnicr Gambling Devices, 

231 F.3d 713, 718 (loth Cir. 2000) (citing Cli~vron , I1.S.A.. Itlc.. v. Nc~turtrl Res. Col~ncil, 

Jnc., 467 U.S. 837, 842-43 (1 954)). hd, we rely on the plain language of our regulations to 

affirm the Presiding Official's finding that the Chairman 11ad the authority to close the entire 

operation. 

Moreover, this precise issue was addressed by the 'I'enth Circuit Court of Appeals in 

United States v. Seminole Ncirion of Okluhomr~, 32 1 F.3~1 939 (1 0'" Cir. 2002). The Court 

concludetl that "when read as a whole IGRA unambiguously authorizes the NIGC Chairman 

to order the temporary closure of entire gaming operations." Id. at 944-45. In adtfition, the 

Court determined that NIGC's regulation, 25 C.F.R. fj 573.6, authorizing the Chairman to 

w 

issue "an order of temporary closure of all or part of a gaming operation" if a tribe violates 

IGRA, was entitled to deference because it was a reasonable interpretation of the statute, 25 

U.S.C. fj 271 3(b)(1). Id. at 94 

Further, the Tribe's reliance on the June 4,2001 closure order in In the Matter of 

Santee Sioux Tribe of Nebraska, CO-96-01, does not support their contention that the TCO in 

this matter was overbroad because it required the cessation of all gaming, instead of allowing 

the Tribe to continue operating Class I1 games. In the Santee Sioux Tribe case, the Chairman 

issued an NOV to the tribe on April 25, 1996 for utilizing Class 111 games without a compact. 

See Order, CO-96-01 at 1. Subsequently, on May 1, 1996, the Chairman ordered the tribe to 

close its casino. Id. Upon appeal, the Commission affirmed and made permanent the 

Chairman's closure order on July 31, 1996. Id. at 2. Five years later, after ceasing to operate 

the Class 111 machines and replacing them with Class 11 machines, the Santee Sioux Tribe 

moved to dissolve the Commission's permanent closure order. Id. Thus, at that time, the 

Commission rescinded its permanent closure order in part to allow the tribe to conduct 
gaming m.ith the Class I1 machines. Id. at 3. Therefore, contrary to the Tribe's assertion, this 

case supports the Chairman's authority to close an entire gaming facility for conducting 

u 

Class 111 gaming without a compact and in no way bolsters the 'Tribe's contention that the 

Chairman was limited to ordering the cessation of Class 111 gaming for violating IGRA by 

operating, Class 111 games in the absence of an operative compact. 

Here, the Tribe stipulated at the hearing on July 7, 2004 that it was ant1 is contlucting 

Class I11 gaming at the Shodaki casino and no compact involving the 'I'ribe and the State of 

California has been published in the Federal Register, as approved by the Secretary. See Rec. 

Dec. at 6, Finding 15. Accordingly, based upon the plain language of our regulation and 

other authority set forth above, we uphold the Chairman's decision to order the closure of the 

Tribe's entire gaming operation. Based on the record before us: the Closure Order is made 

permanent, as "good cause" does not overcome IC;RA7s requ~rernent that Class I11 gaming is 

only autl~orized when a compact is in effect. 

'The Tribe contends that good cause exists to rescind the Chairman's FI'C'O pending 

approval of the 'Tribe's compact with the State of California and that the Chairman should 

have rescinded the TCO for good cause under 25 C.F.R. 5 573.6 (c)(3). Specifically, the 

Tribe maintains that during the "compact dispute between California tribes and the State of 

w 

Califomia, many California tribes were allowed to operate Class Ill gaming activities without 

the tkreat of enforcement of the compact requirement by the Federal government." See Supp. 

Stmt. at 11. In particular, the Tribe asserts that while it pursued its bad faith negotiation 

litigation against the State, the NIGC did not issue a closure order to it; the U.S. District 

Court stayed any enforcement against the Tribe's Class 111 gaming operation; and, as a 

consequence, good cause must have existed to permit the Tribe to operate Class I11 gaming 

while the Tribe's rights were being litigated.9 Id. Thus, the Tribe argues that the same 

principle should apply now since following the expiration of the U.S. District Court's stay 

order in the bad faith litigation on March 17,2004, the Tribe has sought to negotiate a new 

compact and Secretarial approval of its 1999 compact. Id. at 1 1 - 12 

As to this issue, the Presiding Official found that "[s]ince the hearing, there is no 

reason to believe that the Tribe is not diligently pursuing the negotiation of a new TribalThe Tribe contends that the U.S. Department of Justice and the NIGC granted the same treatment to other 

California tribes while their compacts were being negotiated and while the tribes' compacts were awaiting 

approval by the Secretary. See Supp. Stmt at 1 I. 

u 
State Compact" and recommended that the TCO "be suspended unless and iintil the Tribe 

fails to secure such a compact and its approvals" by September 3, 2004. See Rec. Dec. at 10, 

w 

12-13. 

Flrst. it is important to distinguish past circumstances from the present. During 1999, 

the U.S. Department of Justice did not proceed with enforcement actions against tribes that 

entered into provisional compacts with the State prior to October 13, 1999 to allow the 

compacts to become effective through ratification by public vote in March 2000. Scc 1,etter 

from Alejandro N. Mayorkas, U.S. Attorney, to Counsel of 9/2/99; Supp. Stmt. Exhibit 5 

Although the Tribe signed a letter of intent to enter into a compact on September 9, 1999, 

shortly thereafter, it declined to sign the compact, requesting further negot~at~ons wlth the 

State Stpe Rec. Dec. at 3, Findings 5 and 6. When the State refused to negotiate further, the 

Tribe sued the State for failure to negotiate in good faith. Id. at 3, Finding 6. On October 25, 

2000, the 1J.S. District Court issued a stay of enforcement action against the Tribe's Class 111 

gaming operation while the litigation was pending. See United States v. 384 Elcc,tl-onic 

Gambling Devices, 98-cw-1977 (N.D. Cal. Order of October 25, 2000). In regard to the bad 

faith litigation, the District Court n~led in favor of the State; the Court of Appeals affirmed; 

on February 23,2004, the U.S. Supreme Court denied the Tribe's petition for writ of 

v 

certiorari; and on March 17,2004, the U.S. District Court's stay order expired. See Indlun 

Gaming Reluted Cases v. California, 147 F. Supp. 2d 101 1 (N.D. Cal. 2001), ufl'd, 331 F.3d 

1094 (9'h Cir. 2003), cert. denied, 124 S.Ct. 1412,2004 U.S. LEXlS 1064 (U.S. Feb. 23, 

2004). 

These past circumstances are distinguishable from the present. The NIGC delayed 

action for many years to allow the Tribe to pursue its bad faith action against the State. See 

Decision Upon Expedited Review, CO-04-01, (June 10,2004) at 2. At present, the Tribe's 

Federal court remedies as to its bad faith litigation are exhausted, as the Ninth Circuit Court 

of Appeals determined that the State negotiated in good faith and the U.S. Supreme Court has 

rehsed to hear the case. Class 111 gaming in the absence of an operative compact is a 

substantial violation of IGRA. See 25 U.S.C. $2710 (d)(l)(C); 25 C.F.R. 9 273.6 (a)(] 1). A 

compact is only operative or "in effect" when notice of approval by the Secretary has been 

published in the Federal Register. See 25 U.S.C. tj 2710 (d)(3)(B). Therefore, we agree with 

the Chairman that because the bad faith litigation concluded and because the Tribe does not 
have an operative compact, the Tribe's compliance with IGRA is mandatory and must be 

10 immediate. 

w 

I Iere, the Trlbe requests that the NIGC rescind the TCO so that it may continue 

negotiations with the State for a compact and approval of that compact by the Secretary. 11 

As the Chairman stated in his June 10, 2004 Decision, "[slimply put, the NICiC cannot allow 

Tribes to engage in Class I11 gaming without an appro\red compact." ,Tee Decis~on Upon 

Expedited Review. suj~ra at 2. 

The Commission previously addressed this very issue in In the Matter of ,Tuntee Sioux 

Tribe oflYebraska, NOV-96-1, CO-96-01 (July 3 1, 1996) (Final Commission Decision). In 

that case. the Chairman had issued a NOV and a TCO because the tribe was operating Class 

Ill games without a compact. The Santee Sioux Tribe contended that the ('ha~rrnan should 

have rescinded his order of temporary closure for "good cause" pursuant to 25 C:.F.R. fj 573.6 

(c )(3). Irz the Mutter of Sar~tee Sioux Tribe c?f'Nehruskrr, sziprrr at 13. The "good cause" 

reasons cited by the tribe were the Governor's failure to negotiate in good faith, the fact that 

Class 111 gaming and illegal gaming were rampant in Nebraska; and that Class 111 gamlng 

was needed on the reservation to combat adverse economic conditions. Id. 'Phe 

Commission determined that the closure order should not be rescinded, reasoning that: 

w 10 Ol~r analysis is not altered by the fact that the Tribe has now brought suit against the Secretary regarding her 

June 10, 2004 decision to disapprove the 1999 compact. The Secretary is authorized to approve or disapprove 

any Tribal-State compact entered into between an Indian Tribe and a State. See 25 U.S.C. 5 2710 (d)(8). Since 

the Secretary is charged with this duty, the Secretary's decision to disapprove the compact is owed deference. 

See Chevron, U.S.A., Inc. v. Natural Res. Defense Council, 467 U.S. 837, 842-43(1984); Cf Passamaquoddy 

Tribe v. Maine, 75 F.3d 784,794 (1'' Cu. 1996). The NIGC cannot continually suspend enforcement of IGFU 

to the conclusion of the Tribe's lawsuits related to its compact efforts. As the U.S. District Court Judge found 

in regard to the Tribe: 

an injunction that would allow [the] [sic] Tribe to operate its casino without a compact until 

the final resolution of this lawsuit [against the Secretary and the MGC] would undermine the 

NIGC's authority to enforce IGRA and the State's ability to negotiate and enforce compacts 

with other tribes. This would offend the public interest. 

Coyote Band of Pomo Indians v. Nut 'I Indian Gaming Comm 'n, No. C 04-2337 CW, slip op. at 16 (N.D. Cal. 

June 25,2004) (order granting preliminary injunction). 

" The Tribe seeks 3 da).s from the expiration of the Preliminary Injunction, or until October 8, 2004, to 

negotiate a new compact and obtain the Secretary of the Interior's approval of the compact. See Tribe's 

Objections to the Presiding Official's Recommended Decision (August 9,2004) at 2-3. As noted in footnote 2, 

above, the Tribe and the Governor of California have reached agreement on a compact which has not yet been 

approved by the state legislature and the Secretary of the Interior, and the District Court has extended the 

Preliminary Injunction pending publication of an approved compact. We recognize that the NIGC is now 

enjoined from interfering with the Tribe's operation of Class 111 gaming pending publication of an approved 

compact. Nevertheless, we reach our decision today based on the record before us. 

Irr 
nothing in IGRA suggests that the Chairman and the Commission are to 

weigh equitable considerations in deciding whether to issue a temporary 

closure order or whether to make such an order permanent. It ztppears the 

reason for this is that Congress has already conducted the particular 'good 

cause' analysis which the Tribe asks the Commission to undertake. The 

legislative history of IGRA shows that Congress was very aware of the 

oppressive economic conditions on many reservations, and of the benefits that 

could be realized with the influx of capital generated from gaming. It also 

sllows, however, that Congress believed the states had legitimate conccrns 

allout the conduct of class 111 gaming on Indian lands. In deciding to reqnire 

a compact as a prerequisite to authorizing class 111 gaming, Congress 

engaged in the precise balancing of equities analysis that the Tribe seeks 

from the Commission. Congress' conclusion was that, no matter how 

much good gaming might do for a tribe, class Ill gaming would not be 

authorized without a compact. 

In rhe Mrrtter ofSanfee Siotlx Tribe of Nebraska, supra at 14 (emphasis added). Therefore, 

the Comrnission held that "we do not accept the Tribe's argument that it shol~ld be excused 

from con~pliance with IGIW because it is not possible for it to secure a compact" . . . "it is 

clear that Congress intended to authorize class 111 gaming only when a compact was in 

effect." Id. at 15 

Moreover, the Eighth Circuit Court of Appeals determined that "Congress has already 

balanced the harm of closure against the need for regulatory control." In re Sac & Fox of the 

Mississijpi in Iowa, 340 F.3d 749, 761 (8Ih Cir. 2003). Although discussed in the context of 

injunctive relief to enforce the Chairman's temporary closure order, the Court's analysis 

underscores the fact that in crafting IGRA, Congress balanced equities and such balancing is 

reflected in the Act. The Court explained: 

Congress already declared the public's interest and created a regulatory and 

enforcement framework that balanced the need for regulation against the harm 

of closure. . . . Congress viewed effective regulation and respect for 

regulatory authority as being in the public's interest. . . . Congress desired 

the Chairman to have the ability to act swiftly and effectively to cure gaming 

violations . . . Were we to interpret IGRA in a manner that would leave the 

Chairman unable to enforce a temporary closure order, there would be no 

need for the congressionally created and balanced system of limited, 

immediate action followed by administrative or judicial review. We believe, 

therefore, that the only sensible reading of 25 U.S.C. 5 2713 (b)(l) requires 

that we recognize that Congress already conducted the requisite balancing of 

the harm of closure against the need for temporary enforcement of the 

Chairman's closure orders. 
In re S(rc K. F0.x of the Mississippi in IOMJU, 340 F.3d at 760-61. 

w In the matter at hand, the 'Tribe docs not have an operative compact. At the hearing 

on July 7, 2004, the Tribe stipulated that it was and is conducting Class 111 gaming at the 

Shodaki casino and no compact involving the Tribe and the State of California has been 

published in the Federal Register, as approved by the Secretary. See Rec. Dec. at 6, Finding 

15. I3ecause the 'Tribe was and is continuing to conduct Class 111 gaming without an 

approved compact, the TCO was and is appropriate. Such conduct is a substantial violation 

of IGRA and must be met with the appropriate enforcement mechanism as set forth in IGRA 

and NIGC regulations.'2 

Consequently, we reverse the recommendation of the Presiding Official to suspend 

the TCO until September 3, 2004 and we make the closure order permanent. 

In I(r;Iirl, Congress balanced the equities between the economic rewartfs of 

Class 111 gaming and the requirement that such rewards be gainecl in the 

context of a compact that is in effect. Based on the record before us, the 

Tribe's argument that equities weigh in their favor to justify Class 111 

gaming without an operative compact does not supercede or prevail over 

the mandate of IGRA. 

The Tribe seeks to have the NOV and TCO vacated on the grounds that the public 

interest and equities in this matter tilt in their favor. See Supp. Stmt at 13. The Tribe claims 

that pron~oting tribal economic development, one of the principal goals of IGRA, justifies 

allowing it to continue operating its Class I11 games to fund its essential government 

functions, even in the absence of an operative compact. Id. In short, the Tribe maintains that 

the TCO is devastating to its economy and the functioning of its government. Id. at 14-15. 

The Presiding Official also acknowledged that Congress enacted IGRA in part 

because a principal goal of Federal Lndian policy is to promote economic development and 

12 The Commission notes that the Tni ~2s aware of its violation of IGRA prior to the issuance of the NOV on 

June 4. 2004. The agency record reflects the Chairman's substantial efforts in encouraging the Tribe come into 

compliance with IGRA prior to the issuance of an NOV. On March 10,2004, the Chairman sent a letter to the 

Tribe indicating that he was a\vare that the Tribe's bad faith Litigation had concluded and that he "expect[ed] 

the Tribe to comply with the Indian Gaming Regulatory Act (IGRA) by removing all Class 111 gaming devices." 

See Letter from Philip Hogen, Chairman of the NIGC, to Priscilla Hunter, Chairperson of the Coyote Valley 

Band of Porno Indians, of 3/10/04; (Agency Record at Tab 11). Further, on March 25,2004, the Chairman 

informed the Tribe that it was operating Class 111 gaming in violation of the IGRA and requested that it cease all 

such activity by April 30,2004. See Decision Upon Expedited Review, supra at 1. 
agreed that "maintaining the tribe's economy. . . is a valid reason for exercise of the 

Comn~~ssion's discretion" to suspend the TCO. See Rec. Dec. at 10. 

u 

As [letailed above, in enacting IGRA, Congress conducted a balancing of certain 

equities and concluded that despite the economic benefits of Class 111 gaming to tribes, such 

gaming is only permissible when a tribe and a State have an operative compact. See 25 

1J.S.C. 8 2710 (tl)(l )(c ). IGRA's mandate is clear: "Class 111 gaming activities shall be 

lawful on Indian lands only if such activities are - . . . conducted in conformance with a 

Tribal-State compact entered into by the Indian tribe and the State . . . that is in effect." Id, 

(emphasis added). As noted above, a compact takes effect only when notice of approval by 

the Secretary has been published in the Federal Register. ,See 25 U.S.C. fj 27 10 (d)(3 )(B). 

Thus, Class Ill gaming without a compact in effect is a violation of the IGRA. And, nothing 

in the Act indicates that the Chairman or the Commission must weigh equities in determining 

whether to bring an enforcement action against a violation of the Act or to uphold such action 

(I.,. that the Tribe's economic necessity overrides the statute's mandate that an operative 

compact be in existence for Class I11 gaming). This Commission has previously recognized 

that the legislative history of IGRA demonstrates that "Congress was very aware of the 

oppressive economic conditions on many reservations, and of the benefits that could be 

v 

realized with the influx of capital generated from gaming [ . . .; however,] Congress believed 

the states had legitimate concerns about the conduct of class 111 gaming on Indian lands [and] 

. Congress' conclusion was that, no matter how much good gaming might do for a tribe, 

class 111 gaming would not be authorized without a compact." In the Matter ofsuntee Sioux 

Tribe of Nebraska, supra at 14; see also Sac & Fox Tribe of the Mississippi in Iowa v. United 

States, 264 F.Supp.2d 830, 840 (N.D. Iowa 2003) ("Any tribe which elects to reap the 

benefits of gaming authority created by the IGRA must comply with the IGRA's 

requirements."). 

NIGC regulations support this view. In fact, NIGC regulations unequivocally provide 

that the Chairman may order a TCO of a tribe's gaming operation if a substantial violation is 

present. See 25 C.F.R. $ 573.6 (a). A gaming operation utilizing Class I11 games in the 

absence of an operative Tribal-State compact constitutes a substantial violation of IGRA. Id. 

at (a)(l I). Moreover, nothing in the regulations directs the Chairman and the Commission to 

weigh equitable considerations in deciding whether to issue a TCO or whether to make such 
an order permanent. See In the Mutter of Suntee Sioux Tribe of Nehrusku: supru at 14. 

NI(;C re~ulritlons should be accorded deference See, e g , Senecti-Cc~j'zlgu Trlhc of Okla , w 

327 F 3tl ,it 1037. 162 Megcr~nunlu G~rnblzng L)ev1ce.s, 231 F 3d at 71 8 We look to the plaln 

language of the Act and the regulations to conclude that operating Class I11 games in the 

absence of an operative compact is a substantial violation of IGRA and that the mandate of 

IGRA cannot be outweighed by the 'I'ribe's equities argument. 

'This is not to say that the Chairman does not review the equities of a matter prior to 

initiating an enforcement action against a Tnbe, including issuing a closure order, or that the 

Commission does not review the equities in determining whether to make a closure order 

permanent. The Chairman has discretion in issuing a TCO and that discretion is akin to 

"prosecutorial discretion." See In the Matter of San~ee Sioux Trihe of Nebraska, .s~.rpra at 1 1. 

Whether to terminate an enforcement action already undertaken is similarly committed to the 

agency's discretion. Id Here, the Chairman took substantial efforts to encourage the Tribe 

comply ~rith IGIiA prior to the issuance of the NOV and TCO." The Tribe chose not to 

voluntarily comply with the Chairman's requests, flouting the requirements of IGRA. 

The Tribe relies on United States v. Spokane Trihe of Indians, 139 F.3d 1297 (9Ih Cir. 

1998), to argue that strong public policy supports allowing tribes to sustain their economies 'Ilr 

by Class 111 gaming in the absence of a compact and, therefore, IGRA's provisions should 

not be enforced in this instance. See Supp. Stmt at 13. What the Tnbe fails to acknowledge, 

however, is that the circumstances here are the opposite of those in the Spokane case. Here, 

the State of California waived its sovereign immunity and allowed the Tribe to sue it for 

negotiating in bad faith. That was not the case in the Spokane matter, where the State of 

Washington invoked its sovereign immunity under Eleventh Amendment to dismiss the suit. 

139 F.3d at 1301. In fact, even the Spokane court found that if a state waived its sovereign 

immunity and allowed a tribe to sue it, "IGRA would hction as exactly as intended and 

there would be no reason not to give it full effect." Spokane, 139 F.3d at 1301 (emphasis 

added). Moreover, in this instance, the Tribe overlooks the fact that its bad faith litigation 

1; See Letter from Philip Hogen, Chairman of the NIGC, to Priscilla Hunter, Chairperson of the Coyote Valley 

Band of Pomo Indians, of 3/10/04; (Agency Record at Tab 11) (requesting that the Tribe comply with IGRA by 

removing all Class Ill gaming devices); Decision Upon Expedited Review, supra at 1 (on March 25, 2004, the 

Chairman once again informed the Tribe that it was operating Class 111 gaming in violation of the IGRA and 

requested that it cease all such activity by April 30, 2004). 
against the State of California has concluded with the district court holding that the State 

negotlatetl in good faith and the Ninth Circuit Court of Appeals affirming that holding. See 

w 

117 re Indlcln Garnrng Related C7a.ses, 33 1 F.3d 1094, 1 1 10 (9Ih Cir. 2003). Although the 

NlGC delayed taking enforcement action against the Tribe during the course of its bad faith 

litigation, that suit is over and the Tribe must comply with the mandate of IGIU and cease 

gaming n.ithout a compact in effect. 13 

Furthermore. compliance with IGRA, effective regulation to ensure such compliance, 

and respect for replatory authority is in the public's interest. See In re Suc & Fox of the 

Mississippi in IOI+~, 340 F.3d at 760. Through IGRA, Congress devised a regulatory and 

enforcement framework that balanced the need for regulation against the harm of closure. Id. 

Such framework clearly sets forth the violations of the statute and empowers the NIGC to act 

to effectively to cure those violations. See, e.g., 25 U.S.C. 9 2713 (b). The Cornmission has 

found that: 

It is the policy of the [NIGC] that Temporary Closure and related Civil Fine 

Assessment actions proceed quickly to ensure that their deterrent effect is not 

diminished. If the Civil Fine Assessment proceedings were to be stayed until the 

underlying actions were concluded in federal court, any resulting fine would have 

little or no effect over wrongful conduct. This result would be contrary to the 

goals, policies, and purposes of IGRA and the Commission. 

In the Matter of the Seminole Nation of Oklahoma, CFA 00-06, CFA 00-1 0 (Notice of 

Decision and Order of Commission) (Jan. 7,2003), Finding 2. 

In these circumstances, allowing the Tribe to operate Class 111 games in the absence 

of an approved compact after the conclusion of its bad faith litigation against the State of 

California would undermine the NIGC's authority to enforce IGRA and the State's ability to 

negotiate and enforce compacts with other tribes. See, e.g., In re Gaming Cases, 33 1 F.3d 

1094, 1096 (9'h Cir. 2003) (quoting Artichoke Joe's v. Norton, 2 16 F.Supp.2d 1084, 1092 

(E.D. Cal. 2002)) ("IGRA is an example of 'cooperative federalism' in that it seeks to 

balance competing sovereign interests of the federal government, state governments, and 

14 Beginning in November 1994, the Tribe began conducting Class 111 gaming without a Tribal-State compact, 

and continues to do so. See In re Gaming Related Cases, 331 F.3d 1094, 1109 n.6 (9' Cir. 2003). Thus, the 

Tribe has failed to comply with IGRA for ten years. 
Indian tribes, by giving each a role in the regulatory sche~ne.")'~; ,%c & Fox Tribe, 264 

F.Supp.2d at 841 -42 (finding that refusing to enforce the TCO may encourage tribes 

w 

nationwide to disregard NIGC enforcement measures, which in turn undermines Indian 

gaming). "[TJhere is a public interest in fostering respect for the law and compliance with 

administrative procedures [and] [fJailure to comply with the letter of the law embodied in the 

IGRA offends public interests." See Sac cG Fox 7i-lhe, 264 F.Supp.2d at 842. Thus, on the 

record before us, allowing the 'Tribe to continue Class I11 gaming in the absence of an 

operative compact would be an affront to the public's interest.I6 

Accordingly, we reverse the Presiding Official's recommendation to suspend the 

TCO and hereby make it permanent. 

CONCI,USION 

We find that closure of the casino is the appropriate remedy in this instance and, 

therefore, make permanent the TCO. If there is a relevant or material change of facts or 

circumstance, which is not now part of the agency record, then the Tribe may petition the 

Commission to 

n 

rescind the permanent closure order and request permission to resume Class 

It is so ordered b /kf' the N' IONAL INDIAN GAMING COMMISSION. 

Philip N. Hogen Cloyce V. Choney 

Chairman Commissioner Commissioner 

I5 The compacting process gives to States certain civil regulatory authority that they othenvise would lack, 

while granting to Tribes the ability to offer legal Class 111 gaming. See Ahchoke Joe's, 216 F.Supp.2d at 716. 

16 Even the 1J.S. District Court articulated the same principle recently in regard to the Tribe: 

an injunction that would allow [the] [sic] Tribe to operate its casino without a compact until the final 

resctlution of this lawsuit [against the Secretary and the NIGC] would undermine the NIGC's authority 

to enforce IGRA and the State's ability to negotiate and enforce compacts with other tribes. This 

would offend the public interest. 

See Coyote Band ofPomo Indians v. IVar 'I Indian Gaming Comm 'n, No. C 04-2337 CW, slip op. at 16 (N.D. 

Cal. June 25, 2004) (order granting preliminary injunction). 

w 
CERTIFlCATE OF SERVICE 

v 

I hereby certify that on the 30th day of August, 2004, I served a copy of the 

foregoing COhJhIlSSlON DECISION by f?csimile and by certified mail, return receipt 

reqt~estetl, upon the follo\ving: 

1'riscill;i llunter, Tribal Chairperson (and Agent for Service of Process) 

Coyote Valley Band of Yonlo Indians 

PO Box 39 

Redwood Valley. California 95470 

Fax: 707-485-1247 

Conly J. Shulte, Esq. 

llarold hlonteau, Esq. 

hlonteao Rr Peebles, I,LP 

121 00 West Center Road 

Suite 202 

Omaha, Nebraska 68144 

Fax: 402-333-4761 

I hereby certify that on the 301h day of August, 2004, I served a copy of the 

fore~oing Commission Decision by hand delivery upon the following: 

w John R. Hay, Esq. 

National Indian Gaming Commission 

1441 1, Street NW, Suite 91 00 

Washington, D.C. 20005 

I also served via United States First Class Mail a true and correct copy of the foregoing 

instruments to the following addresses: 

Candida S. Steel, Presiding Official 

U.S. Department of the Interior 

Office of Hearings & Appeals 

801 N. Quincy St. 

Arlington, VA 22203 

Dated: f/ 3 L./ c~Y 

~ekk Moore 

Legal Staff Assistant