Court overturns Spokane injunction, says protections needed

Friday, March 27, 1998 | 10:33 a.m.

A 1996 U.S. Supreme Court ruling, barring tribes from suing states for refusing to negotiate agreements on the scope of tribal casinos, did not authorize federal prosecutors to shut down reservation gambling after a state stopped negotiating, said the 9th U.S. Circuit Court of Appeals in a 3-0 decision.

A shutdown needs further justification, the court said: for example, a determination that the type of gambling in question was banned by state law, and was therefore illegal on reservations, or evidence that the tribes had been acting in bad faith. The court also said the U.S. Interior Department was considering regulations that might fill the gap in the law caused by the Supreme Court ruling.

The ruling overturned a federal judge's 1994 order prohibiting slot machines and some other types of gambling activities by the Spokane Tribe of Indians. The appeals court had earlier suspended the injunction and allowed the casinos to keep operating while the case was pending. Friday's ruling left open the possibility that the shutdown order would be reinstated in the future, based on further evidence.

"It doesn't change things very much," said Assistant U.S. Attorney James Shively, who sought the order against the tribe for operating slot machines and other casino gambling without a negotiated agreement with the state.

But Scott D. Crowell, a lawyer for the tribe, said the ruling should give the tribe a chance to prove that slot machines were legal. He said it might also bring the state back to the negotiating table.

Daniel Kolkey, legal adviser to California Gov. Pete Wilson, said the ruling should not affect state and federal efforts to shut down about 13,000 video slot machines in California tribal casinos. Federal prosecutors say they will act in 60 days against tribes that do not join an agreement recently signed by a San Diego County tribe to allow limited numbers of lottery-type gambling machines.

The ruling involves a 1988 federal law that allowed states to ban the most lucrative types of gambling activities on reservations, such as slot machines, if those activities were forbidden elsewhere in the state. Gambling in that category that was allowed in the state would also be allowed on reservations under agreements negotiated between the state and the tribe.

The Spokane Tribe negotiated with the state for at least two years on an agreement to expand operations beyond bingo and card games, then filed suit, as allowed by the law, when talks broke down. Meanwhile, the tribe installed more than 1,000 slot machines and started other gambling activities that federal authorities considered illegal under state law.

Federal prosecutors obtained a shutdown injunction from U.S. District Judge Fred Van Sickle in 1994. Two years later, the Supreme Court ruled that tribal suits against states under the law were barred by the Constitution's 11th Amendment, which protects states from many types of suits in federal court without their consent. Washington state used the ruling to gain dismissal of the Spokane Tribe's suit.

In Friday's ruling, the appeals court said the Supreme Court decision upset the balance of the 1988 federal law by removing any incentive for the state to negotiate. That does not mean the entire law is unconstitutional, but it requires more to support an injunction than the state's immunity from being sued for refusal to negotiate, the court said.

If the federal government seeks a new injunction, Van Sickle could consider additional evidence, such as whether the state had grounds for its refusal to negotiate because the gambling devices were prohibited by state law, the court said.

The opinion by Judge Alex Kozinski discussed other possible safeguards, such as a state's consent to be sued, or federal action on a tribe's behalf if a state wrongfully refused to negotiate.

In a separate case, not involving the Spokane Tribe, Van Sickle has ruled that slot machines are barred by Washington law and therefore would not be allowed on reservations. But Crowell, the Spokane Tribe's lawyer, said Friday he believes the tribe could produce evidence that could persuade the judge slots are legal in the state.

At a minimum, he said, a fair hearing would entitle the tribe to many more types of machines than the state has allowed.

The case is U.S. vs. The Spokane Tribe of Indians, 94-35515.