Opinion ID: 755180
Heading Depth: 3
Heading Rank: 1

Heading: Meaning of Exclusive Right to Operate

Text: 7 At issue in this case is the interpretation of the consent judgment. A district court's interpretation of a consent decree or judgment is a matter of law subject to de novo review, and the underlying findings of fact are reviewed for clear error. Huguley v. General Motors Corp., 67 F.3d 129, 132 (6th Cir.1995). Where as here, though, we are reviewing the interpretation of a consent judgment by the district court that crafted the consent judgment, it is probably more accurate to describe our standard of review as deferential de novo. It is only sensible to give the court that wrote the consent judgment greater deference when it is parsing its own work. As this Court has noted: [a]t first blush, giving substantial deference to the district court's interpretation of the [consent] decree appears to be inconsistent with de novo review. Yet, in Brown v. Neeb, 644 F.2d 551, 558 n. 12 (6th Cir.1981), we explained that the district court's reading of the decree was merely an additional tool for contract interpretation. Huguley v. General Motors Corp., 52 F.3d 1364, 1369-70 (6th Cir.1995). As the Court noted in Brown, [f]ew persons are in a better position to understand the meaning of a consent decree than the district judge who oversaw and approved it. 644 F.2d at 558 n. 12. We agree, and we will review the district court's decision accordingly. 8 Consent decrees and judgments are binding contracts. See id. at 557. The interpretation of a consent decree or judgment is a question of contractual interpretation. Huguley, 67 F.3d at 132. Because this contract was formed in the State of Michigan, it is interpreted under Michigan law. Sawyer v. Arum, 690 F.2d 590, 593 (6th Cir.1982). Under Michigan law, [t]he primary goal in the construction or interpretation of any contract is to honor the intent of the parties. Rasheed v. Chrysler Corp., 445 Mich. 109, 517 N.W.2d 19, 29 n. 28 (1994). The Court must look for the intent of the parties in the words used in the instrument. Michigan Chandelier Co. v. Morse, 297 Mich. 41, 297 N.W. 64, 67 (1941). 9 This dispute centers on the words exclusive right to operate, and even more directly on the words exclusive right. What is an exclusive right? The Lac Vieux contend that when Proposal E was signed into law the Tribes lost their exclusive right and therefore no longer needed to make payments to the State. The district court held that the Tribes lose their 'exclusive right to operate' when the [Michigan Gaming Control Board] issues a license to operate a casino to a person or entity other than the Tribes. Although the State originally contended that the Tribes' obligation to make payments lasted until another casino operator actually began to operate a casino, it now agrees with the district court's middle position that the obligation lasts until another operator receives a license. 10 The Lac Vieux raise several points of contention with the district court opinion. They argue that, [s]ince Proposal E became effective ... the operation of electronic games of chance is no longer prohibited in the State of Michigan. They hang this argument on a definition of prohibited extracted from the Supreme Court opinion in California v. Cabazon Band of Mission Indians, 480 U.S. 202, 107 S.Ct. 1083, 94 L.Ed.2d 244 (1987). In Cabazon, the Court distinguished between criminal/prohibitory laws and civil/regulatory laws in determining that federal law did not permit California to regulate tribal bingo enterprises. Id. at 209-11, 107 S.Ct. 1083. The Lac Vieux contend that Cabazon 's definition of prohibit is relevant because the district court in this case determined that the Tribes have an exclusive right as long as others are prohibited or shut out from the 'right to operate' such games and that, following the passage of Proposal E, electronic games of chance are regulated but not prohibited in Michigan. 11 The Lac Vieux's argument has multiple flaws. First, the Cabazoncase centers on statutory interpretation and deals with the enforceability of state laws on Indian reservation land. This case does not deal with statutory interpretation and has nothing to do with the enforceability of state laws. The Lac Vieux do not argue that Michigan never had the ability to collect the payments from the Tribes; the Lac Vieux merely contend that the State no longer has that ability. Therefore, the Cabazon definition of prohibit is not necessarily relevant to the interpretation of a consent judgment. 12 Even if the restricted definition of prohibit were germane, the Lac Vieux ignore the fact that the district court posits its qualification for exclusivity in the disjunctive. Exclusivity depends on others being prohibited or shut out. Even if we were to accept the Lac Vieux's definition of prohibit, the Lac Vieux would not prevail because other operators are nonetheless shut out from operating electronic games of chance. Operation of electronic games of chance without a license is against the law in the State of Michigan. See Mich. Comp. Laws Ann. § 750.303 (West 1991 & Supp.1998). 13 The district court defined exclusive as limited to possession, control or use by a single individual or group. The Lac Vieux argue that the court misapplied its own definition because the court considered only possession and use and ignored the term control. The district court did not determine whether the Tribes controlled casino gambling in Michigan because, once again, the district court definition is in the disjunctive. It is possession, control or use, and there is, therefore, no need to show all three elements to prove exclusivity. As Governor Engler points out, it makes no sense to read the consent decree as conditioning the Tribes' payments on their control of casino gambling because they never controlled it. If the Tribes controlled casino gambling, they would never surrender their exclusivity or pay money to the State--making much of the consent judgment surplusage. To the extent any entity controls casino gambling it is the state legislature. 14 At this time, no one but the Tribes has the right to operate electronic games of chance. The Tribes can point to no one who is infringing their right. They will continue to have an exclusive right until the Michigan Gaming Control Board grants casino licenses to non-Tribal groups. The district court was correct in holding that the Tribes maintain their exclusive right until another group receives a casino license.