Opinion ID: 777979
Heading Depth: 2
Heading Rank: 1

Heading: The Effect of the Three Agreements

Text: 27 After reviewing the Consulting Agreement and the Construction and Term Loan Agreement entered into by the Tribe and BNC, the district court held that the Tribe's agreement to accept and comply with all recommendations made by the Consultant in section 5.1(p) of the Construction and Term Loan Agreement was insufficient to change Casino Magic's obligations to the tribe from that of a consultant to that of a manager. United States Ex. Rel. Maynard Bernard v. Casino Magic Corp., Civ. 98-1033, slip op. at 14 (D. S.D. April 23, 2001) (order granting motion for summary judgment). The court determined that the record was devoid of any facts from which a reasonable jury could find that Casino Magic began to act as a manager after the Construction and Term Loan Agreement was finalized. Id. 28 We disagree. When the NIGC had the opportunity to review the Consulting Agreement and the Construction and Term Loan Agreement together, it determined that the documents created a management agreement, requiring NIGC approval under 25 U.S.C. § 2711. Without such approval, the agreements were invalid. Moreover, the Participation Agreement gave Casino Magic a percentage ownership interest in the Tribe's indebtedness. That interest, combined with the other documents' impact, transferred more authority to Casino Magic than what the Consulting Agreement, reviewed by the NIGC and the BIA, actually provided. The Consulting Agreement stipulated that the Consultant has no management authority or control with regard to the Enterprise or the Existing Facilities, but shall act only as a consultant offering consulting services.... [A]ll decision-making authority shall rest solely with the Tribe. (Consulting Agreement ¶ F, Appellant's Separate App. at 163-64). The Tribe's ultimate authority, however, was effectively revoked by the terms of section 5.1(p) of the Construction and Term Loan Agreement, which mandated the Tribe's compliance with Casino Magic's recommendations. 29 The district court advanced four reasons for its decision to grant summary judgment in favor of Casino Magic. We do not find these reasons persuasive. First, the court explained that the post-cancellation of the [Consulting Agreement] does not provide Bernard with a cause of action under § 81. United States Ex. Rel. Maynard Bernard v. Casino Magic Corp., Civ. 98-1033, slip op. at 13 (D. S.D. April 23, 2001) (order granting motion for summary judgment). 4 At first opportunity, the Chairman of the NIGC held that the Consulting Agreement and the Construction and Term Loan Agreement, considered together, were management contracts. (Appellant's Separate App. at 188). Casino Magic was aware of the combined effect of all agreements, and it assumed the risk of proceeding without having submitted all documents to the Chairman. We therefore find that Bernard did, in fact, have a valid cause of action under § 81. 30 Second, the district court explained that Casino Magic was not a party to the Construction and Term Loan Agreement, and neither that agreement nor the Participation Agreement mandated the condition that Casino Magic assume managerial responsibilities of the casino. Although this finding is correct, it does not change the fact that Casino Magic was aware of the terms of the Construction and Term Loan Agreement, which limited the Tribe's powers and enhanced those of Casino Magic. A management contract includes the principal contract and all collateral agreements to such contract that relate to the gaming activity. 25 U.S.C. § 2711(a)(3). The three agreements discussed above served as a management contract implicitly if not explicitly. 31 Third, the court below stated, the record is devoid of any facts from which a jury could find that Casino Magic began to act as a manager after the Construction and Term Loan Agreement was finalized. United States Ex. Rel. Maynard Bernard v. Casino Magic Corp., Civ. 98-1033, slip op. at 14 (D. S.D. April 23, 2001) (order granting motion for summary judgment). In our view, this lack of evidence is irrelevant. The issue is whether Casino Magic, in fact, had managerial control. The NIGC found that it had, given the combined effect of the series of agreements. We defer to that finding. See Bruce H. Lien Co. v. Three Affiliated Tribes, 93 F.3d 1412, 1418 n. 10 (8th Cir.1996) (a permissible agency interpretation on this issue [of whether the management contract requires NIGC review] would merit considerable deference) (citing Arkansas AFL-CIO v. FCC, 11 F.3d 1430, 1441 (8th Cir.1993)). 32 Finally, the court explained that Congress did not intend § 81 to be used as a sword to regain monies paid under a series of agreements serving only to benefit the Tribe. Id. The district court cites no authority for this proposition, and we find none. The law is clear that management agreements must be approved by the Chairman of the NIGC. Without that approval, invalid management fees must be recovered on behalf of the Tribe. We cannot ignore the plain words of § 2711 nor the Chairman's findings that taken as a whole, the series of agreements constituted a management agreement. Thus, appellant is entitled to recover any fees paid by the Tribe to Casino Magic.