Opinion ID: 52276
Heading Depth: 3
Heading Rank: 3

Heading: Reasonableness of Secretarial Procedures

Text: Under Chevron’s Step Two Even were we to conclude under the Chevron step-one analysis that Seminole Tribe effected a sub rosa delegation of administrative authority allowing the Secretary to ignore Congress’s explicit limitation of his authority in § 2710(d)(7)(B)(vii), the Secretarial Procedures still cannot pass muster under Chevron step two because they do not reasonably 13 The United States’ analogy to the Coal Act cases fails to lend support to its endorsement of the unauthorized actions Interior has taken in this case. The Fourth Circuit’s decision in The Pittston Co. v. United States, 368 F.3d 385 (4th Cir. 2004), stands only for the proposition that an administrative agency’s interpretation of a statute in light of a subsequent judicial decision may be permissible if that interpretation is (1) faithful to the authority Congress originally delegated to the agency and (2) does not contradict the plain language of the statute. That uncontroversial stance shares our view that the scope of authority delegated by Congress to an administrative agency is not altered by subsequent developments. See, e.g., Brand X, 545 U.S. at 983, 125 S. Ct. at 2700. As the Pittston court recognized, the beneficiary reassignments undertaken by the Social Security Commissioner in the wake of Eastern Enterprises v. Apfel, 524 U.S. 498, 118 S. Ct. 2131 (1998), did not “violate[] or disturb[] the structure of the Coal Act . . . . [The Commissioner] followed the Coal Act’s assignment structure to the letter. . . . [T]he fact and method of applying the Coal Act . . . have not changed.” 368 F.3d at 404-05; see also A.T. Massey Coal Co. v. Holland, 472 F.3d 148, 167 (4th Cir. 2006) (“[D]elegation must appear from the statute itself, not from the agency’s actions”); Sidney Coal Co. v. Soc. Sec. Admin., 427 F.3d 336, 347 n.15 (6th Cir. 2005). The same cannot be said of the Secretary’s actions. In stark contrast to the Commissioner’s reassignments in Pittston, here the Secretary did not promulgate Class III gaming regulations that correspond to the structure of IGRA. Instead, the Secretary has erected an ersatz remedial scheme that exceeds the authority Congress delegated to the Secretary under IGRA’s remedial provisions. Pittston does not support the creation of a novel remedial scheme never envisioned by Congress and specifically contradictory of Congress’s expressed intent concerning the scope of secretarial rulemaking. The application of a preexisting remedial scheme to a narrower pool of plan participants that was approved in Pittston is not remotely analogous to the wholesale invention of the remedial scheme that we are confronted with in the Secretarial Procedures. Pittston lends no support for the unprecedented “gapfilling” that the Secretary has undertaken in this case. 30 effectuate Congress’s intent for IGRA. “If [the agency’s] choice represents a reasonable accommodation of conflicting policies that were committed to the agency’s care by the statute,” a court will not disturb that choice “unless it appears from the statute or legislative history that the accommodation is not one that Congress would have sanctioned.” Chevron, 467 U.S. at 845, 104 S. Ct. at 2783 (quoting United States v. Shimer, 367 U.S. 374, 382-83, 81 S. Ct. 1554, 1560-61 (1961)); see also United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 131, 106 S. Ct. 455, 462 (1985) (Chevron step two entails evaluation of agency action “in light of the language, policies and legislative history of the Act.”). In any event, “[p]olicy considerations cannot override our interpretation of the text and structure of the Act.” Cent. Bank of Denver, N.A., v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 188, 114 S. Ct. 1439, 1453-54 (1994). “The judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent.” Chevron, 467 U.S. at 843 n.9, 104 S. Ct. at 2782 n.9. Thus, as with the delegation inquiry, Chevron step two compels a judicial evaluation of congressional intent. Because the Secretary’s actions clearly violate IGRA’s intent, they are unreasonable. In IGRA, Congress struck a “finely-tuned balance between the interests of the states and the tribes” to remedy the Cabazon Band prohibition on state regulation of Indian gaming. United 31 States v. Spokane Tribe of Indians, 139 F.3d 1297, 1301 (9th Cir. 1998); S. REP. NO. 100-446, at 2 (1988), as reprinted in 1988 U.S.C.C.A.N. 3071, 3071-72 (noting Cabazon Band’s holding that tribes “have a right to conduct gaming activities on Indian lands unhindered by State regulation”). Congress attempted to “provide a means by which tribal and State governments can realize their unique and individual governmental objectives” by giving tribes the opportunity to negotiate a Class III gaming compact, and by giving states the protection of an objective judicial intermediary in case negotiations prove unsuccessful. S. REP. NO. 100-446, at 13 (1988), as reprinted in 1988 U.S.C.C.A.N. 3071, 3083. The lynchpin of IGRA’s balancing of interests is the tribal-state compact. Melding the provisions for negotiation of a compact with the remedial structure ultimately included in IGRA took over five years to accomplish legislatively.14 Moreover, IGRA’s legislative history amply demonstrates that Congress viewed the compact as an indispensable prerequisite to Class III gaming. See id. at 6, as reprinted in 1988 U.S.C.C.A.N. 3071, 3076 (“[IGRA] does not contemplate and does not provide for the conduct of Class III gaming activities on Indian lands in the absence of a tribal-State compact”); id. (“tribes will be unable to enter into [Class III] gaming unless a compact is in place”). Congress 14 The legislation to enable Indian gaming was first introduced as H.R. 4566, 97th Cong. (1983), by Representative Morris Udall in 1983. S. 555, 100th Cong. (1988), introduced by Senator Daniel Inouye, was enacted into law as IGRA in 1988. 32 considered — and rejected — other remedial structures that did not guarantee states such protections. The legislature eventually settled on IGRA’s judicial remedy and the tribal-state compact requirement as the “best mechanism to assure that the interests of both sovereign entities are met with respect to the regulation of complex gaming enterprises.” Id. at 13, as reprinted in 1988 U.S.C.C.A.N. 3071, 3083. Congressional intent on this score is pellucid. In order to conduct Class III gaming, tribes must either: (1) negotiate a voluntary compact with the state, see 25 U.S.C. § 2710(d)(3)(A)- (C); (2) obtain the state’s agreement to the mediator-selected compact that follows the judicial good-faith process, see § 2710(d)(7)(B)(iii)-(vi); or (3) obtain secretarial Class III procedures based on the mediator-selected compact, see § 2710(d)(7)(B)(vii)(I). Absent a tribal-state compact, the statute forbids tribes to offer Class III gaming. The tribal-state compact is in fact so central to the IGRA process that it is the only means by which the tribe can avoid incurring liability under other federal statutes that regulate Indian gaming. Two statutes, both of which antedate IGRA, are relevant to this issue. First, the Johnson Act, 15 U.S.C. § 1175 et seq., prohibits the possession or use of “any gambling device . . . within Indian country.” Id. § 1175(a). Second, 18 U.S.C. § 1166 punishes gambling in Indian country in derogation of state law. Congress coordinated IGRA with these criminal provisions by 33 providing that the tribal-state compact is the exclusive means of avoiding gaming-related violations.15 Apart from the limited circumstances in which IGRA allows Class III gaming to be imposed by the Secretary following exhaustion of the judicial goodfaith/mediation process, Class III gaming remains illegal in Indian country without a tribal-state compact. The role the Secretary plays and the power he wields under the Procedures bear no resemblance to the secretarial power expressly delegated by Congress under IGRA. First, IGRA interposes, before any secretarial involvement, the requirement that an impartial factfinder determine whether the state has negotiated in good faith. See § 2710(d)(7)(B)(iii). Under the Secretarial Procedures, however, it matters not that a state undertook good-faith negotiations with the tribe: The Secretary may prescribe Class III gaming irrespective of a state’s good faith. See 25 C.F.R. § 291.7-.8. This result contravenes the plain language of IGRA. Second, under IGRA, if mediation is ordered, it is undertaken by a neutral, judicially-appointed mediator who objectively weighs the proposals submitted by the state and tribe. 15 See IGRA § 2710(d)(6) (Johnson Act does not apply to gaming conducted under a tribal-state compact); see also United States v. Cook, 922 F.2d 1026, 1034 (2d Cir. 1991) (Johnson Act liability waived only by a Class III gaming compact between a state and tribe). Likewise, 18 U.S.C. § 1166(c)(2), referencing IGRA, excepts “class III gaming conducted under a Tribal-State compact.” See, e.g., Mashantucket Pequot Tribe v. Connecticut, 913 F.2d 1024, 1031 (2d Cir. 1990) (tribal-state compact required for waiver of 18 U.S.C. § 1166 liability). 34 See § 2710(d)(7)(B)(iv). Under the Procedures, however, the Secretary selects the mediator. 25 C.F.R. § 291.9. In light of the Secretary’s statutory trust obligation to protect the interests of Indian tribes, this aspect of the Procedures is stacked against the objective interest-balancing Congress intended and creates the strong impression of a biased mediation process. See, e.g., Kickapoo Tribe of Indians of Kickapoo Reservation in Kan. v. Babbitt, 43 F.3d 1491, 1499 (D.C. Cir. 1995) (noting that “the Secretary was not in a position to champion the State’s position in view of his trust obligations to the tribe.” (citing Heckman v. United States, 224 U.S. 413, 444-45, 32 S. Ct. 424, 433-34 (1912))). Common sense dictates that the Secretary cannot play the role of tribal trustee and objective arbiter of both parties’ interests simultaneously. Congress did not intend this incoherent result. Third, whereas under IGRA’s remedial scheme the courtappointed mediator essentially defines the regulations that the Secretary may promulgate, the Procedures enable the Secretary to disregard not only the mediator’s proposal, but also the proposals of the state and tribe.16 IGRA’s remedial process makes clear that 16 Compare § 2710(d)(7)(B)(vii) (“the mediator shall notify the Secretary and the Secretary shall prescribe . . . procedures (I) which are consistent with the proposed compact selected by the mediator under clause (iv)) with 25 C.F.R. § 291.11(c) (“If the Secretary rejects the mediator’s proposal . . . he/she must prescribe appropriate procedures within 60 days under which Class III gaming may take place that comport with the mediator’s selected proposal as much as possible, the provisions of IGRA, and the relevant provisions of the laws of the State.”). 35 Congress did not intend to delegate to the Secretary unbridled power to prescribe Class III regulations. Fourth, the Secretarial Procedures contemplate Class III gaming in the absence of a tribal-state compact — directly in derogation of Congress’s repeated and emphatic insistence. See, e.g., S. REP. NO. 100-446, at 6 (1988), as reprinted in 1988 U.S.C.C.A.N. 3071, 3076 (“[IGRA] does not contemplate and does not provide for the conduct of class III gaming activities on Indian lands in the absence of a tribal-State compact.”).17 The only exception to the compact requirement Congress envisioned was the promulgation of procedures after a bad-faith determination and in concert with the proposal selected by a court-appointed mediator. Yet in spite of this single statutory exception — the product of IGRA’s complex and balanced remedial scheme — Appellees maintain it is equally reasonable to assume that Congress intended a waiver of liability under the Johnson Act and 18 U.S.C. § 1166 even without a judicial determination of bad faith; without the participation of a court-appointed mediator; and without the requirement that the regulations ultimately promulgated be “consistent with the proposed 17 Department of the Interior and Related Agencies Appropriations Act, Pub. L. No. 105-83, 111 Stat. 1543, 1570 (1998) (“SENSE OF THE SENATE CONCERNING INDIAN GAMING. It is the sense of the Senate that the United States Department of Justice should vigorously enforce the provisions of the Indian Gaming Regulatory Act requiring an approved Tribal-State gaming compact prior to the initiation of class III gaming on Indian lands.”) 36 compact selected by the [court-appointed] mediator.” § 2710(d)(7)(b)(vii)(I).18 For all these reasons, the Secretary’s Class III Procedures are not a reasonable interpretation of IGRA, especially when viewed against “their place in the overall statutory scheme.” Brown & Williamson, 529 U.S. at 133, 120 S. Ct. at 1301. The Secretary, of course, is not authorized to promulgate regulations in violation of federal law, see Sohappy v. Hodel, 911 F.2d 1312, 1320 (9th Cir. 1990), yet the Secretarial Procedures stand in direct violation of IGRA, the Johnson Act, and 18 U.S.C. § 1166 insofar as they may authorize Class III gaming without a compact. Because “the Executive Branch is not permitted to administer the Act in a manner that is inconsistent with the administrative structure that Congress enacted into law,” and because doing so constitutes an unreasonable interpretation of Congress’s intent, 18 Commentators have noted the problems with the Procedures. See Rebecca S. Lindner-Cornelius, Note, The Secretary of the Interior as Referee: The States, The Indian Nations, and How Gambling Led to the Illegality of the Secretary of the Interior’s Regulations in 25 C.F.R. § 291, 84 MARQUETTE L. REV. 685, 695 (2001) (arguing that the regulations are unconstitutional and noting that “when a state claims it has negotiated in good faith to no avail, the only recourse it is left with is a biased factfinder who can do what it wants without any state input”); Nicholas S. Goldin, Note, Casting a New Light on Tribal Casino Gaming: Why Congress Should Curtail the Scope of High Stakes Indian Gaming, 84 CORNELL L. REV. 798, 843-44 (1999) (arguing that the Procedures are “troubling” because the Secretary “assumes a massive unilateral power that Congress did not intend to delegate” and because the Procedures “make a travesty of the concept of federalism and in its place substitute a system in which Washington claims it knows best what state laws mean”); Joe Laxague, Note, Indian Gaming and TribalState Negotiations: Who Should Decide the Issue of Bad Faith?, 25 J. LEGIS. 77, 91 (1999) (arguing that the Procedures “do both parties a disservice and badly skew the balance of interests intended by Congress when it wrote the IGRA”). 37 the Secretarial Procedures cannot pass muster under Chevron step two. ETSI Pipeline Project, 484 U.S. at 157, 108 S. Ct. at 817.