New Mexico judge refuses to dismiss state lawsuit against tribes

Friday, Dec. 8, 2000 | 8:57 a.m.

U.S. District Judge Bruce Black ruled Wednesday that his court has jurisdiction over the matter after 11 of the tribes sought to have the lawsuit dismissed.

Madrid filed a lawsuit in June against two tribes and 10 pueblos to force them to pay the state 16 percent of their slot-machine revenue.

The tribes have argued the revenue-sharing payment, required by compacts they signed with the state, is an illegal tax and have refused to pay.

Madrid said in a statement released Thursday that she was pleased with Black's decision, but added that her office would consider a settlement in the case.

"We hope the tribes will now reconsider their positions and more realistically assess how a satisfactory settlement might be structured, including full back payment of all revenue sharing payments owed the state," Madrid said.

She said the tribes owe the state about $70 million.

If a settlement is negotiated, Madrid said Gov. Gary Johnson and the Legislature should be involved.

Richard Hughes, a Santa Fe lawyer who represents Santa Ana Pueblo, said Madrid's comment "looks more like an invitation to capitulation," but he didn't rule out the possibility of settlement discussions.

"Nothing is foreclosed at this stage," he said.

He said Black's ruling was just "step one" in the legal process.

"We never expected this thing really to be over in five months. ... I suspect it will go on for a while," he said.

He also said one option for the tribe is to appeal Black's decision to the U.S. 10th Circuit Court of Appeals, but he said that had not been decided.

The state sued the Jicarilla Apache and Mescalero Apache Tribes, and the pueblos of Acoma, Isleta, Laguna, Pojoaque, Sandia, San Felipe, San Juan, Santa Ana, Taos and Tesuque. The Mescalero Apache Tribe did not join the others in seeking to have the case dismissed.

Tribal leaders formally announced in April they would no longer make gambling payments to New Mexico unless a federal judge ordered them to do so. They contend the state is illegally taxing them.

Their announcement came after the Legislature in March rejected a proposed compact - the product of nine months of negotiations. The rejected proposal was a 20-year pact with a revenue sharing rate of 7.75 percent of slot proceeds.

Pojoaque Gov. Jacob Viarrial sent a letter to Johnson asking to reopen negotiations for the compact, but Johnson refused at the time to negotiate and said litigation was the only route left.

Madrid has said if the courts rule in the state's favor and the tribes still refuse to pay, they could risk having their casinos closed. The casinos will remain open during the litigation.