Federal Court Limits Tribe’s, Secretary’s Options When State Balks At Gaming Compact

A federal district court in New Mexico has issued a decision finding that the U.S. Department of the Interior's regulations permitting the Secretary of the Interior to adopt Class III gaming procedures for a tribe lacking a Tribal-State Compact are invalid and violate the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 et. seq. ("IGRA"). If upheld, the decision in New Mexico v. Dept. of Interior could be expected to shift the balance of power to the states in the negotiation of new compacts and renewed compacts. The decision also may result in pressure on the Department of the Interior to exercise its role as trustee for tribes and sue states that fail to negotiate compacts in good faith.

The court issued the decision in New Mexico v. Department of the Interior on Friday.1 The Pueblo of Pojoaque ("Pueblo") is an intervenor-defendant in the case. The legal dispute concerns IGRA's so-called remedial provisions, which require tribes to negotiate Tribal-State Compacts in order to operate Class III gaming. If a state does not negotiate in good faith, a tribe may sue the state in federal district court to obtain a finding that the state acted in bad faith.2 If a state is found to have acted in bad faith, the court may order the tribe and the state to enter into a Tribal-State Compact within 60 days.3 If the tribe and the state have still not entered into an agreement, the court can order mediation, with the mediator selecting a proposed agreement.4 The state may then accept or reject the mediator's selected agreement.5 If the state rejects the agreement, the Secretary may adopt gaming procedures that permit the tribe to operate Class III gaming.6

A dispute arose when the State of New Mexico ("State") asserted its Eleventh Amendment immunity to defend a suit the Pueblo brought alleging the State's failure to negotiate a renewed Tribal-State Compact in good faith.7 Following dismissal of its suit on March 3, 2014, the Pueblo petitioned the Secretary of the Interior ("Secretary") to determine it was eligible to conduct gaming under the Department of the Interior's gaming procedure regulations at 25 C.F.R. Part 291.8 The Secretary found the Pueblo eligible for gaming procedures on June 17, 2014, and solicited comments from the State.9 The State submitted comments under protest and filed suit against the Department of the Interior and the Secretary on August 7, 2014, alleging the gaming procedure regulations of 25 C.F.R. Part 291 are invalid because...