Opinion ID: 733385
Heading Depth: 2
Heading Rank: 1

Heading: Validity of Compacts

Text: 30 The district court held that the entered into and the in effect components of 25 U.S.C. § 2710(d)(1)(C) are essentially two separate requirements: (1) the compacts must be validly entered into under applicable state law and (2) they must be in effect pursuant to Secretarial approval and notice. The Tribes and the United States argue approval by the Secretary is all that is required to make the compacts valid and in effect, regardless of whether the compacts were valid under state law. 9 The State agrees with the district court that validity of the compacts under state law is an essential and separate requirement under IGRA. 31 We hold that: (1) IGRA imposes two separate requirements--the State and the Tribe must have entered into a compact and the compact must be in effect pursuant to Secretarial approval--before class III gaming is authorized; (2) state law determines the procedures by which a state may validly enter into a compact; and (3) in determining whether the State and the Tribes have entered into compacts, valid and binding under New Mexico law, we agree with and follow the New Mexico Supreme Court's decision in Clark. 32
33  'In determining the scope of a statute, we look first to its language.'  United States v. Silvers, 84 F.3d 1317, 1321 (10th Cir.1996) (quoting United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981)). Thus, like the district court did, we first examine IGRA's language to determine whether the entered into and the in effect requirements are separate or whether, as the Tribes urge us, Secretarial approval of the compacts, placing the compact into effect under IGRA, is all that is necessary. 34 Section 2710(d)(1)(C) of IGRA permits class III gaming conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State under paragraph (3) that is in effect. The statute also states as follows: 35 The provisions of section 1175 of Title 15 shall not apply to any gaming conducted under a Tribal-State compact that-- 36 (A) is entered into under paragraph (3) by a State in which gambling devices are legal, and 37 (B) is in effect. 38 § 2710(d)(6). Both provisions separate the entered into requirement from the in effect requirement, the latter provision more clearly than the former. IGRA unambiguously provides that a compact goes into effect when it is approved by the Secretary and notice is published in the Federal Register. § 2710(d)(3)(B). It does not define what is necessary for a tribe and state to enter[ ] into a compact, nor does it state which branch of state government can or must sign a compact. 10 Thus, the language of the statute suggests that the in effect requirement establishes the date when the compact becomes effective under IGRA, but arguably says nothing about whether a state has validly entered into a compact. 39 The legislative history of IGRA provides some guidance. The Tribes argue the district court badly misinterpreted Congress's intentions with respect to state involvement in tribal Class III gaming. Appellants' Br. in Chief at 31. They argue that the legislative history shows that the overriding purpose of IGRA was to promote tribal self-sufficiency, and that Congress was extremely reluctant to open the door to state involvement in the regulation of gaming on Indian lands. Id. As a result, so the argument goes, a compact which was invalid under state law could nonetheless bind the state under IGRA, so long as it receives Secretarial approval. 40 We do not agree that Congress expressed little concern for state interests when it enacted IGRA. Indeed, the legislative history of the Act is replete with references to the need to accommodate tribal and state interests: 41 This legislation is intended to provide a means by which tribal and State governments can realize their unique and individual governmental objectives, while at the same time, work together to develop a regulatory and jurisdictional pattern that will foster a consistency and uniformity in the manner in which laws regulating the conduct of gaming activities are applied. 42 S.Rep. No. 100-446, at 6 (1988), reprinted in 1988 U.S.C.C.A.N. 3071, 3076. The Senate Report described the tribal-state compacts as follows: 43 [T]he Committee concluded that the use of compacts between tribes and states is the best mechanism to assure that the interests of both sovereign entities are met with respect to the regulation of complex gaming enterprises such as parimutuel horse and dog racing, casino gaming, jai alai and so forth. The Committee notes the strong concerns of states that state laws and regulations relating to sophisticated forms of class III gaming be respected on Indian lands where, with few exceptions, such laws and regulations do not now apply. The Committee balanced these concerns against the strong tribal opposition to any imposition of State jurisdiction over activities on Indian lands. The Committee concluded that the compact process is a viable mechanism for setting various matters between two equal sovereigns.... 44 In the Committee's view, both State and tribal governments have significant governmental interests in the conduct of class III gaming. ... A State's governmental interests with respect to class III gaming on Indian lands include the interplay of such gaming with the State's public policy, safety, law and other interests, as well as impacts on the State's regulatory system, including its economic interest in raising revenue for its citizens. 45 Id. at 13, reprinted in 1988 U.S.C.C.A.N. at 3083 (emphasis added). 46 While preservation of tribal sovereignty was clearly of great concern to Congress, respect for state interests relating to class III gaming was also of great concern. We are hesitant to conclude that Congress intended to permit a state to be bound by a compact regulating class III gaming which it never validly entered. Cf. Seminole Tribe, --- U.S. at ----, 116 S.Ct. at 1119 (observing that IGRA provides that an Indian tribe may conduct certain gaming activities only in conformance with a valid compact between the tribe and the State) (emphasis added); see also Kickapoo Tribe of Indians v. Babbitt, 43 F.3d 1491, 1495 (D.C.Cir.1995) (Clearly, ... the State of Kansas has an interest in the validity of a compact to which it is a party....). 47 Several district courts have considered the effect, if any, of a subsequent determination that the particular state representative who entered into the compact in fact lacked the authority to do so. Two of the three courts have reached the same conclusion as the three district courts in New Mexico--that a compact entered into by someone without authority to bind the state is void and without effect, regardless of the Secretary's approval of the compact. Thus, they have implicitly concluded that validity of a compact under state law is a separate requirement from Secretarial approval. See Narragansett Indian Tribe of Rhode Island v. Rhode Island, Nos. 94-0618-T, 94-0619-T, 95-0034-T, 1996 WL 97856, at  2 (D.R.I. Feb.13, 1996) (holding that a compact signed by the Governor, who lacked authority under state law to sign the compact, is void in the same sense that any document executed without proper authority is void; namely, it has no legal effect); Kickapoo Tribe of Indians v. Babbitt, 827 F.Supp. 37, 46 (D.D.C.1993) ([B]ecause only the Governor--a person without authority--signed the compact, the State did not enter into the compact. Thus, the compact does not comply with § 2710(d)(8)(A) and is invalid.), vacated on other grounds, 43 F.3d 1491 (D.C.Cir.1995); cf. Willis v. Fordice, 850 F.Supp. 523, 532-33 (S.D.Miss.1994) (finding, in response to challenge to Governor's authority to enter into a compact, that the Governor in fact had the authority under state law to enter into compact), aff'd, 55 F.3d 633 (5th Cir.1995). 11 But see, Langley v. Edwards, 872 F.Supp. 1531, 1535 (W.D.La.1995) (Compact approval by the Secretary cannot be invalidated on the basis of a governor's ultra vires action, because a contrary rule would compel the Secretary to consider state law before approving any compact.), aff'd, 77 F.3d 479 (5th Cir.1996). We therefore conclude that the entered into language imposes an independent requirement and the compact must be validly entered into by a state before it can go into effect, via Secretarial approval, under IGRA. 12 The Tribes make a number of arguments against this conclusion, and we address each in turn.
48 The Tribes argue that the fact that IGRA contemplates tribes conducting class III gaming even without a compact, if the State refuses to negotiate one or to accept one proposed by a mediator, supports its argument that a valid compact is unnecessary. The district court drew precisely the opposite conclusion from those provisions in IGRA, 25 U.S.C. § 2710(d)(7)(B)(vii), and we agree with the district court's interpretation. 49 As the legislative history makes clear, Congress was concerned about striking a balance between the interests of tribes and of states in class III gaming. Thus, the Act gives states multiple chances to negotiate a compact governing the conduct of such gaming. As the district court observed, it is [o]nly after rejecting several opportunities to involve itself in the negotiation process [that] the Act terminate[s] the State's opportunity to participate. Pueblo of Santa Ana v. Kelly, 932 F.Supp. 1284, 1293 (D.N.M.1996). Congress could have permitted Indian tribes to conduct any kind of gaming on Indian lands without any involvement by states. The fact that it provided states with several opportunities to become involved through the compacting process suggests Congressional concern to permit state involvement if a state so desires. The fact that it permits such gaming, if the other requirements of IGRA are met, when a state affirmatively refuses to negotiate a compact in no way minimizes the importance of the compact process. Similarly, to permit a state actor to purport to bind the state when in fact he or she lacks the authority to do so undermines the significance of the compact process as a means of providing meaningful state involvement if a state so desires.
50 The Tribes also argue that the district court's decision undermines finality and forever subjects a compact to collateral attack on state law grounds. The United States makes a related argument that the only way to challenge an approved compact is to ask the Secretary to withdraw his approval, and to challenge his decision not to withdraw approval under the Administrative Procedure Act, 5 U.S.C. §§ 701-06. We are not persuaded that the possibility of indefinite collateral attack is as real, or as dire, as the Tribes claim it is. We need not reach the argument made by the United States because we have held that, under IGRA, the existence of a valid compact is a requirement for conducting class III gaming. 51 A compact is a form of contract. Texas v. New Mexico, 482 U.S. 124, 128, 107 S.Ct. 2279, 2283, 96 L.Ed.2d 105 (1987) ( '[a] Compact is, after all, a contract' ) (quoting Petty v. Tennessee-Missouri Bridge Comm'n, 359 U.S. 275, 285, 79 S.Ct. 785, 792, 3 L.Ed.2d 804 (1959) (Frankfurter, J., dissenting)). As with any contract, parties entering into one must assure themselves that each contracting party is authorized to enter into the contract. There are familiar, and well-established, methods for obtaining such assurance. In this case, as in the others in which the Governor's authority to sign a compact has been questioned, the challenge came promptly and was quickly resolved. Indeed, Governor Johnson signed the compacts in February 1995, they were approved by the Secretary and published in the Federal Register in March 1995, a petition challenging the Governor's authority to sign the compacts was filed in April, and in mid-July of that year (approximately 120 days following the Secretary's approval) the New Mexico Supreme Court unanimously declared that the Governor had lacked the authority to sign them. See also Narragansett Indian Tribe, 1996 WL 97856 at  1 (court certified question of Governor's authority to sign compact within five months of signing of compact); Langley, 872 F.Supp. at 1532 (court ruled on challenge to Governor's authority within three months of signing of compact); Kickapoo Tribe, 827 F.Supp. at 39 (Attorney General filed suit seeking determination of Governor's power to sign compact within three weeks of signing it); cf. Willis, 850 F.Supp. at 524-25 (plaintiff filed action in state court within ten months, and action in federal court within thirteen months of signing of compacts). In practice, it appears that challenges are made quickly, and resolved promptly. 52 Moreover, while we appreciate the enormous costs, both economic and human, which the Tribes will incur if they must now close gaming facilities they currently operate under these compacts, the Tribes must bear some responsibility for their dilemma, because, as they conceded at oral argument, most of them commenced gaming well before these compacts were signed. 13 In the face of the Tribes' admittedly precipitous conduct, their claimed need for finality now seems less tenable.
53 The Tribes further argue that our interpretation places the Secretary in an untenable position, requiring that he determine with certainty whether or not a compact presented for approval is fully 'valid' ... that is, executed by a state official with actual state law authority. Appellants' Br. in Chief at 20. We do not agree. IGRA makes it clear that the Secretary must approve a compact within 45 days. 25 U.S.C. § 2710(d)(8)(C). We agree with the Tribes that Congress did not intend to force the Secretary to make extensive inquiry into state law to determine whether the person or entity signing the compact for the state in fact had the authority to do so. However, that does not mean that consequences should not flow, such as a determination that the compact is invalid, if it turns out that the state has not validly bound itself to the compact. Indeed, as Secretary Babbitt said in a letter to Senator Jeff Bingaman of New Mexico, concerning the compacts at issue in this case: 54 We agree that compacts between Indian tribes and states are valid only if entered into by the appropriate State officials. However, given IGRA's 45-day time constraint and the automatic approval provision, we do not believe that Congress contemplated that the Department would address or resolve complex issues of State law raised by an internal challenge to a Governor's authority. In this regard, we must defer to the representations of Governors, as the Chief Executive Officers of their states, unless it is clear beyond cavil that a Governor lacks the authority to sign a compact. 55 Ex. 120, Appellants' App. Vol. IV at A1271. As the Secretary observes, a compact is not valid unless properly authorized, but the Secretary is not expected to resolve state law issues regarding that authority in the 45-day period given to him to approve a compact.
56 The Tribes also assert that the Governor's act of signing the compacts without authority was merely a voidable act, which the Secretary in essence cured by approving the compacts. The cases the Tribes cite as support for this argument are, however, factually distinguishable, in that they involve an unauthorized act which was subsequently ratified or approved by the body with clear authority to ratify or approve the action. See, e.g., National Civil Serv. League v. City of Santa Fe, 370 F.Supp. 1128, 1132 (D.N.M.1973) (if City Manager lacked authority to enter into contract, City Council subsequently ratified the contract). They do not support the argument that a federal official can ratify or authorize an unauthorized state actor's conduct. 57 In sum, the Tribes' arguments do not convince us that Secretarial approval of the compacts is all that is necessary in order for the compacts to comply with IGRA.
58 Another, but very closely related, issue about which the parties disagree is whether federal law or state law, or both, govern the validity of a compact. We agree with the courts in Willis, 850 F.Supp. at 532, and Kickapoo Tribe, 827 F.Supp. at 45-46 that determining the validity of a compact necessitates an interpretation of both federal and state law. 59 IGRA is a federal statute, the interpretation of which presents a federal question suitable for determination by a federal court. Thus, we indisputably have the power to determine whether a Tribal-State compact is valid. See West Virginia ex rel. Dyer v. Sims, 341 U.S. 22, 28, 71 S.Ct. 557, 560, 95 L.Ed. 713 (1951) (Just as this Court has power to settle disputes between States where there is no compact, it must have final power to pass upon the meaning and validity of compacts.). However, that does not mean that state law plays no role at all in the statute. 60 As we have held, IGRA imposes two requirements for a compact to authorize class III gaming--the compact must be validly entered into by the state and the tribe, and it must be in effect pursuant to Secretarial approval. The plain language of IGRA makes it clear that Secretarial approval and publication places a compact into effect. However, IGRA says nothing specific about how we determine whether a state and tribe have entered into a valid compact. State law must determine whether a state has validly bound itself to a compact. See Washington v. Confederated Bands and Tribes of the Yakima Indian Nation, 439 U.S. 463, 493 & n. 39, 99 S.Ct. 740, 757 & n. 39, 58 L.Ed.2d 740 (1979) (holding that section 6 of Pub.L. 280 (now codified at 25 U.S.C. § 1324), authorizing the people of any State to amend, where necessary, their State constitution or existing statutes to effect the transfer of civil and criminal jurisdiction over Indian lands to the state, required the application of state law to the procedural amendment requirement). 14 We agree with the district court that IGRA's very silence on this point supports the view that Congress intended that state law determine the procedure for executing valid gaming compacts. Pueblo of Santa Ana, 932 F.Supp. at 1294. Thus, the state and Tribe must be validly bound under state law.
61 A final related question is whether we must independently decide whether the state validly bound itself under state law, or whether we must follow the New Mexico Supreme Court's determination of that issue in Clark, or whether we need only give some deference to the state court's determination. The district court held that, under Sims, it must independently review state law and determine whether the state was validly bound. It reached the identical conclusion as the New Mexico Supreme Court--i.e., that the Governor lacked the authority to sign the compact. 62 The Tribes conceded at oral argument of this case that Clark did indeed hold that the Governor lacked the authority to enter into the compacts. They also conceded that we are required, absent extraordinary circumstances, to accept that determination. 15 They simply argue it is irrelevant under IGRA, because Secretarial approval is all that is necessary to make the compacts valid and binding. The State similarly argues we are bound by the Clark decision. The question remains whether, despite these concessions, we nonetheless are required by Sims, 341 U.S. 22, 71 S.Ct. 557, 95 L.Ed. 713 (1951), to independently examine state law, albeit giving deference to the New Mexico Supreme Court's decision, or whether we simply accept that decision as the authoritative declaration of state law. 63 In Sims, West Virginia and seven other states had entered into a compact to control water pollution by means of a commission with representatives from each of the states. West Virginia's legislature approved the compact, and attempted to appropriate funds as part of the state's contribution to the expenses of the commission. When the state auditor refused to pay the appropriation, the West Virginia members of the commission, along with others, brought an action in the West Virginia Supreme Court of Appeals, which held that the legislative act approving the compact was invalid because it violated West Virginia's constitution. The Supreme Court, after independently reviewing West Virginia's law, reversed the state court, concluding that nothing in the compact offended the state constitution. The Court did observe, however, that [o]f course every deference will be shown to what the highest court of a State deems to be the law and policy of its State. Id. at 28, 71 S.Ct. at 560. 64 In our view, arguments exist supporting either reading of Sims--that Sims requires us to independently examine state law, giving deference to the state court's determination, or that Sims requires us, in this particular case, to accept as binding the state court's determination. We need not explore that issue further, however, as a resolution of the matter would not change the outcome of this case. Whether we give deference to the New Mexico Supreme Court's thorough and careful analysis of state law, or whether we view ourselves as bound by it, we accept as determinative in this case the state court's decision on the question of whether the Governor of New Mexico had the authority, under the New Mexico constitution or statutory law, to bind the state to the compacts. That court unambiguously held that the Governor lacked the authority to bind the state to the compacts. We agree with that decision. The compacts were therefore never validly entered into by the state and, as a result, do not comply with IGRA.