Opinion ID: 900265
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Heading: IGRA and the Tribal-State Gaming Compact

Text: [¶ 14.] In 1988, Congress enacted the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701-2721 (IGRA or Act), governing the operation of gaming on Indian land. [3] By this Act, Congress expressly preempt[ed] the field in the governance of gaming activities on Indian lands. S.Rep. No. 100-446, at 6 (1988), reprinted in 1988 USCCAN 3071, 3076; see also Gaming Corp. of America v. Dorsey & Whitney, 88 F.3d 536 (8th Cir. 1996) (IGRA completely preempts the field of Indian gaming as against state law). In enacting IGRA, Congress specifically found that a principal goal of Federal Indian policy is to promote tribal economic development, tribal self-sufficiency, and strong tribal government.... 25 U.S.C. § 2701(4); see also 25 U.S.C. § 2702(1). [¶ 15.] IGRA permits some state regulation of certain tribal gaming activities as specifically authorized by the Act, but it was not intended to expand state authority on Indian lands. S.Rep. No. 100-446, at 5, reprinted in 1988 USCCAN 3071, 3075; Oneida Tribe of Indians of Wisconsin v. Wisconsin, 951 F.2d 757, 759 (7th Cir.1991). One of the stated policies of IGRA is to assure that gaming is conducted fairly and honestly by both the operator and players... and to protect such gaming as a means of generating tribal revenue. 25 U.S.C. § 2702(2) and (3). Congress concluded that Indian tribes have the exclusive right to regulate gaming activity on Indian lands if the gaming activity is not specifically prohibited by Federal law and is conducted within a State which does not, as a matter of criminal law and public policy, prohibit such gaming activity. 25 U.S.C. § 2701(5). The Act installs a framework for the regulation of gaming activities on Indian lands which provides that in the exercise of its sovereign rights, unless a tribe affirmatively elects to have State laws and State jurisdiction extend to tribal lands, the Congress will not unilaterally impose or allow State jurisdiction on Indian lands for the regulation of Indian gaming activities.... In no instance, does [the Act] contemplate the extension of State jurisdiction or the application of State laws for any other purpose. S.Rep. No. 100-446, at 5-6 (1988), reprinted in 1988 USCCAN 3071, 3075-76. Thus, tribal sovereignty remains intact under IGRA unless the tribe affirmatively elects to have state law and jurisdiction extend to tribal land. S.Rep. No. 100-446, at 5. Tribes may elect to be subject to state jurisdiction pursuant to Tribal-State compacts negotiated for the purpose of gaming on Indian land. See 25 U.S.C. § 2710(d)(3)(C)(i). [¶ 16.] In summary, nothing in IGRA itself abrogates immunity for the purpose of allowing private civil suits against Indian tribes. Tamiami Partners, Ltd. v. Miccosukee Tribe of Indians of Florida, 63 F.3d 1030, 1048 (11thCir.1995)(doctrine of sovereign immunity bars management company's claim for breach of contract against tribe). [4] The Act effects only a limited waiver of a tribe's sovereign immunity as it relates to enforcement of IGRA's provisions. Maxam v. Lower Sioux Indian Community, 829 F.Supp. 277, 281-82 (D.Minn.1993); Ross v. Flandreau Santee Sioux Tribe, 809 F.Supp. 738, 745 (D.S.D.1992). The question, then, is whether the Tribe waived immunity in its Gaming Compact with the State of South Dakota. [5] The Compact must be analyzed under the principle that provisions of treaties and statutes dealing with Indian tribes should be liberally interpreted in their favor. Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 582, 8 L.Ed. 483 (1832) (M'Lean, J., concurring); Winters v. United States, 207 U.S. 564, 576-77, 28 S.Ct. 207, 211-12, 52 L.Ed. 340 (1908). The policy of leaving Indians free from state jurisdiction and control is deeply rooted in [our] Nation's history. Rice v. Olson, 324 U.S. 786, 789, 65 S.Ct. 989, 991, 89 L.Ed. 1367 (1945). In determining contractual intent, we are bound by the plain and ordinary meaning of the words used. Land & Marine Dev., Inc. v. Widvey, 1996 SD 44, ¶ 7, 546 N.W.2d 380, 382; American State Bank v. Adkins, 458 N.W.2d 807, 809 (S.D.1990). [¶ 17.] The Yankton Sioux Tribe, after extensive negotiations with the State of South Dakota, entered into a Gaming Compact on April 29, 1991. The Compact sets forth the obligations and restrictions in bringing about the anticipated economic benefits to the Tribe, while attempting to preserve the integrity of the gaming industry in South Dakota. Under IGRA, any Tribal-State Compact may include provisions relating to (i) the application of the criminal and civil law and regulations of the Indian tribe or the State that are directly related to, and necessary for, the licensing and regulation of such activity; (ii) the allocation of criminal and civil jurisdiction between the State and the Indian tribe necessary for the enforcement of such laws and regulations;       (v) remedies for breach of contract;       (vii) any other subjects that are directly related to the operation of gaming activities. 25 U.S.C. § 2710(d)(3)(C)(emphasis added). [¶ 18.] We find nothing in the Gaming Compact of 1991 or the Amended Compact of 1993 that deals directly with private party claims for breach of contract against the Tribe. Section 6 of both versions of the Compact provides: Cases involving only tribal members shall be heard in tribal court. Cases involving one or more persons who are not tribal members shall be heard in state court, unless all parties stipulate that the action shall be heard in tribal court. It is understood by the parties that the provisions of this paragraph are limited to civil cases arising from transactions related to or arising from, gaming conducted pursuant to this Compact. This provision shall not be construed to be a waiver of the sovereign immunity of the Tribe. (emphasis added). These contrasting demarcations may at first seem antagonistic, but on close examination, we see that one merely allocates jurisdiction in disputes between persons and the other only affirms the Tribe's intent to keep so much of its immunity in gaming matters as is permissible under IGRA. From the specific language of Section 6, it is obvious the drafters of the Compact never intended an unlimited waiver of sovereign immunity. Hence the sentence: This provision shall not be construed to be a waiver of the sovereign immunity of the Tribe. As if to underscore it, that intent is restated at the end of the agreement in Paragraph 13.8: This Compact shall not be construed to waive or diminish the sovereignty of the Tribe or the State of South Dakota, except as specifically provided by the terms of the Compact set forth above. Moreover, the term persons as used Section 6 hardly suggests the Tribe is subjecting itself to state jurisdiction. The word person rarely describes a sovereign government. See Brink Elec. Const. Co. v. South Dakota Dep't of Revenue, 472 N.W.2d 493, 496 (S.D.1991) (citing Southern Union Gas Co. v. New Mexico Pub. Serv. Com'n, 82 N.M. 405, 482 P.2d 913 (N.M.1971), overruled on other grounds by De Vargas Sav. and Loan Ass'n v. Campbell, 87 N.M. 469, 535 P.2d 1320 (1975)). [¶ 19.] Consequently, we decline to read the provisions of Section 6 to broadly situate within state court jurisdiction all civil disputes between the Tribe and non-tribal persons however tangentially those disputes might relate to gaming. A fair reading of the Compact indicates a limited waiver of tribal immunity, with an understanding that certain disputes between persons will be heard in either tribal or state court. A gaming dispute between a non-tribal member and a management contractor might be an example of a case cognizable in state court. This case, on the other hand, is a private dispute over compensation between the Tribe and one of its former employees. Generally, suits to recover debts Indian tribes purportedly owe are subject to the defense of sovereign immunity. Bottomly v. Passamaquoddy Tribe, 599 F.2d 1061, 1064 (1st Cir.1979); Ramey Constr. Co., Inc., 673 F.2d at 319; Wells v. Philbrick, 486 F.Supp. 807, 809 (D.S.D.1980). [¶ 20.] Although Indian tribes are permitted under IGRA to enter into management contracts for their gaming operations, we find nothing in the Act that places tribal-management disputes under state court jurisdiction. See 25 U.S.C. § 2711(a)(1); see also 25 U.S.C. § 2711(c)(1) (permitting the Gaming Commission to approve management contracts providing for a fee based upon a percentage of the net revenues of a tribal gaming activity). IGRA and its regulations further prescribe essential terms which must be contained in a management contract before the same can be approved by the NIGC's Chairman (or the Secretary of the Interior for contracts, like the present, which were submitted prior to NIGC organization). 25 U.S.C. § 2711(b)(1-6); 25 C.F.R. Part 531.1(a-n). Along with the presence of an adequate tribal ordinance regarding gaming and satisfactory background checks for individuals and entities representing management parties, 25 U.S.C. § 2711(a), the presence of the various essential contract terms is critical regarding federal approval of management contracts. Bruce H. Lien Co. v. Three Affiliated Tribes, 93 F.3d 1412, 1417-18 (8th Cir.1996) (footnotes omitted). [¶ 21.] Neither IGRA nor its implementing regulations provide a specific method for resolving disputes between a tribe and a management contractor. See 25 C.F.R. § 522.2(f) (requiring tribes to enact ordinances providing for procedures for resolving disputes between the gaming public and the tribe or the management contractor.) The regulations do require management contracts to include provisions for resolving such disputes (25 C.F.R. § 531.1(a), (k)), but Calvello's contract with its arbitration clause was never approved by the Tribe's General Council or the Chair of the Indian Gaming Commission or the Secretary of the Interior, pursuant to 25 U.S.C. § 2711. Therefore, it was null and void as the arbitrator and the federal district court both concluded. See Calvello, 899 F.Supp. at 436. [¶ 22.] The Tribe's limited waiver of sovereign immunity will not authorize Calvello's lawsuit in circuit court. If Calvello has a remedy against the Tribe, he must seek it in tribal court. [6] In matters involving commercial relations, it has long been acknowledged that subject[ing] a dispute arising on a reservation ... to a forum other than the one they have established for themselves, may undermine the authority of the tribal cour[t] ... and hence ... infringe on the right of the Indians to govern themselves. Santa Clara Pueblo, 436 U.S. at 59, 98 S.Ct. at 1677 (quoting Fisher v. District Court, 424 U.S. 382, 387-88, 96 S.Ct. 943, 947, 47 L.Ed.2d 106 (1976) and Williams v. Lee, 358 U.S. 217, 223, 79 S.Ct. 269, 272, 3 L.Ed.2d 251 (1959)); see also National Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845, 855-57, 105 S.Ct. 2447, 2453-54, 85 L.Ed.2d 818 (1985) (Our cases have often recognized that Congress is committed to a policy of supporting tribal self-government and self-determination.); Bowen v. Doyle, 880 F.Supp. 99, 123 (W.D.N.Y.1995) (even if state court has jurisdiction and matter is not currently pending before tribal court, state courts must abstain from hearing suits arising on reservations until after tribal courts have resolved the issue); Smith v. Babbitt, 875 F.Supp. 1353, 1366-67 (D.Minn.1995) (non-tribal court must abstain from hearing matter arising on Indian land until plaintiff has exhausted remedies in tribal court). Further, in accord with the long-standing policy of encouraging tribal self-government, Indian tribes must maintain the power to make their own substantive law on internal matters and to enforce that law in their own forums. United States v. Quiver, 241 U.S. 602, 36 S.Ct. 699, 60 L.Ed. 1196 (1916); Williams, 358 U.S. at 223, 79 S.Ct. at 272; see also United States v. Wheeler, 435 U.S. 313, 332, 98 S.Ct. 1079, 1090, 55 L.Ed.2d 303 (1978) (Tribal courts are important mechanisms for protecting significant tribal interests.). A vital part of sovereignty encompasses tribal authority over activities of non-Indians conducted on Indian lands. Montana v. United States, 450 U.S. 544, 565-66, 101 S.Ct. 1245, 1258-59, 67 L.Ed.2d 493 (1981); Washington v. Confederated Tribes of Colville Indian Reservation, 447 U.S. 134, 152-53, 100 S.Ct. 2069, 2080-81, 65 L.Ed.2d 10 (1980). [C]ivil jurisdiction over the activities of non-Indians on reservations lands presumptively lies in tribal courts, unless affirmatively limited by a specific treaty provision or federal statute. Iowa Mutual Ins. Co. v. LaPlante, 480 U.S. 9, 18, 107 S.Ct. 971, 977, 94 L.Ed.2d 10 (1987); Duncan Energy v. Three Affiliated Tribes, 27 F.3d 1294, 1299 (8th Cir.1994). Bruce H. Lien Company, 93 F.3d at 1419 (tribal court to determine in first instance validity of gaming management agreement); Dillon, 144 F.3d at 584 (plaintiff may pursue claim in Yankton Sioux tribal court). [¶ 23.] Our ruling today is a narrow one: We uphold summary judgment under the distinct state of the record in this case. By our decision, Calvello might not be deprived of his day in court, but only his day in the court of his choice. Bank of Oklahoma v. Muscogee (Creek) Nation, 972 F.2d 1166, 1169 (10th Cir.1992)(finding no due process violation in the placement of plaintiff's claim to tribal court); see also Federico v. Capital Gaming Int'l Inc., 888 F.Supp. 354, 357 (D.R.I.1995) (plaintiff free to seek a remedy in tribal forum, if tribal law provides a remedy). Subject, of course, to the tribal court's determination, can jurisdiction there be any more fitting? Calvello contracted with the Tribe to manage a tribal business on tribal property to be paid in tribal funds. [¶ 24.] Affirmed. [¶ 25.] MILLER, C.J., and GILBERTSON, J., concur. [¶ 26.] SABERS and AMUNDSON, JJ., dissent.