Indian Gaming: Understanding Michigan vs Bay Mills Indian Community By Artur Loss June 10, 2014 at 4:44 pm Michigan vs Bay Mills Indian Community is a lawsuit by the state of Michigan to close an off-reservation Indian casino. On May 27, 2014, the U.S. Supreme Court ruled in favor of the Tribe. This is a win for the Indian Community, but does not mean that States are powerless. If off-reservation casinos are to continue in the long term, it will be only with consent from their States. Michigan currently has a compact with Bay Mills Indian Community, pursuant to the Indian Gaming Regulatory Act (IGRA) of 1988, which allows the Tribe to operate a casino on Indian Land within the state. In 2010, Bay Mills opened a new casino in Vanderbilt, a village 125 miles away from the Tribe’s reservation. The Vanderbilt location was acquired by the Tribe as compensation for 19th century takings of ancestral lands. Legislation stated that the Vanderbilt land should be treated as an Indian Land. Bay Mills interpreted this to mean “Indian land” under IGRA, allowing the Tribe to operate a casino there based on the existing compact. Michigan disagreed. The court decided that tribal sovereign immunity bars Michigan from suing Bay Mills, and that Congress had granted that immunity, so that only Congress – not the Court – could take it away. Sovereign immunity could be overriden if the Tribe were to violate its Tribal-State compact under IGRA provisions. However, IGRA regulates only the relationship between these parties within Indian Lands. Michigan’s claim that Vanderbilt casino is outside of Indian territory implies that IGRA is inapplicable – thus the protection of Bay Mills because of sovereign immunity. The doctrine of tribal sovereign immunity for off-reservation commercial conduct was previously addressed in Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc. (1998). In that case, an Indian tribe defaulted on the payment of $285,000 plus interest, and was protected by tribal sovereign immunity from a civil lawsuit attempting to recover the money. The Court rejected Michigan’s argument that it (not Congress) had established immunity via Kiowa, and that it could, in this new case, refine, modify, or overturn the decision in Kiowa. It does not seem logical that even if Bay Mills violated both state law and its compact with Michigan, the Tribe is protected against the state’s lawsuit. But the history of the enactment of IGRA can explain this anomaly. Gambling occurred on Indian reservations long before the enactment of IGRA in 1988. The Act was passed in response to California v. Cabazon Band of Mission Indians (1987), where the Supreme Court held that neither California officials trying to regulate bingo games conducted on Indian territory, nor Riverside County trying to close a card club operating there, had the right to do so, since such gambling was on the Tribal territory. The purpose of the Act was to a provide a legislative basis for the operation and regulation of Indian gaming on Tribal land, protecting gaming as a means of generating revenue for the tribes. There was no concern about land outside of Tribal land, as the State retained authority over those lands. The IGRA does not include language about off-reservation casinos because that is covered by other legislation. The court’s majority position was stated by Justice Sotomayor. She referred to the long history of tribal sovereign immunity and the concept of comity to argue in favor of preserving the stare decisis. If that Tribes are “self-governing sovereign political communities”, then this sovereignty can not be withdrawn by treaty or statute as a result of their dependent status. If the principles of comity to be preserved, the rule allowing States to sue Tribes without their consent should also go the other way: Tribes should also have the right to sue States. This is currently not true: In the case of Seminole Tribe of Fla. v. Florida (1996), a Tribe was denied the right to sue Florida regarding issues with a negotiated gaming compact under IGRA provisions. The minority on the court (Justice Thomas writing the dissent) agreed with Michigan’s position that Indian Tribes should be treated similarly to foreign nations, where soverign immunity is withdrawn when a suit arises from commercial activity. The majority rejected that position. Justice Sotomayor cited Cherokee Nation v. Georgia (1831), where the Cherokee Nation was referred to as “domestic dependent nation” with special relations to United States unlike other nations in existence. The minority and majority of the court also clashed over the extent to which soverign immunity for commercial activities is important to Tribes. Thomas noted Tribal gaming revenues increased from $8.5 billion in 1998 to $27.9 billion in 2012 in the 28 states where it exists. Justice Sotomayor responded that only 42 percent of federally recognized tribes operate gaming, and that 2009, about 70% of their revenues came from only about 20% of these commercial enterprises. Thomas argued that the doctrine of tribal sovereign immunity is often used to protect crime and negligence and gives Tribes preferential treatment, as well as unfair advantage on the U.S. market, because commercial activies are not subject to normal taxes. Sotomayor responded that the main purpose of enacting IGRA was to establish gaming by Indian tribes as a way to promote tribal economic development in order for them to achieve self sufficiency, eradicating the need to rely on federal funding, and that the states do tax non-Tribal companies and individuals operating on Indian reservations, and can tax some as well as collect revenues from sales of Indian land under some circumstances. The court decision is a win for the Indian Community, but does not mean that Indian casinos placed on non-Indian lands are safe from State actions. In the case of Bay Mills, the court ruled that while the Tribe itself indeed is protected by sovereign immunity, any of its members outside of its jurisdiction – including at the off-reservation Indian casino at Vanderbilt – are subject to the same federal, state, and local laws as anyone else. Thus the only option for Michigan is legal action against individual defendants rather than the Tribe as a whole. If Michigan does not grant a license to the Vanderbilt casino, it can bring a lawsuit against individuals operating and attending it – an illegal venue. States have even more leverage in the negotiation of gaming compacts under IGRA provisions. IGRA authorizes Indian Tribes to conduct gambling on Indian Land, but only via a compact. It allows a State and a Tribe to enter into such a compact, an agreement as to the terms of the gaming the Tribe is allowed to conduct on Indian Lands within the state. So, for example, Michigan could refuse to renew the compact with Bay Mills when the current agreement expires. It remains to be seen whether the Vanderbilt casino – which stopped operating after a U.S. district court ruled in favor of Michigan – will return to operation. If it does, Michigan may decide that the uncertainty about the status of its location justifies leaving it alone, given the time and expense of bringing individual lawsuits against those managing or working at the casino. Or it may move aggressively to again try to close the casino with the powers that the court noted it had. That could help define exactly what rights States and Tribes have against each other. Similarly, it is unclear whether Michigan vs Bay Mills Indian Community will have significant implications for off-reservation casinos across U.S., given that such casinos still require at least the implicit consent of the State in which they are located. References California v. Cabazon Band of Mission Indians US 480 (Supreme Court of the United States), p.202. Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc. US 1998 (Court of Civil Appeals of Oklahoma), p.751. Michigan v. Bay Mills Indian Community et al. US 572 (Supreme Court of the United States), p.1.