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Pueblo of Pojoaque v. State of New Mexico

United States Court of Appeals, Tenth Circuit

July 18, 2017

PUEBLO OF POJOAQUE, a federally recognized Indian tribe; JOSEPH M. TALACHY, Governor of the Pueblo of Pojoaque, Plaintiffs-Appellants,
v.
STATE OF NEW MEXICO; SUSANA MARTINEZ; JEREMIAH RITCHIE; JEFFERY S. LANDERS; SALVATORE MANIACI; PAULETTE BECKER; ROBERT M. DOUGHTY, III; CARL E. LONDENE; JOHN DOES I-V, Defendants-Appellees.

         APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO (D.C. No. 1:15-CV-00625-JB-GBW)

          Scott Crowell of Crowell Law Office, Tribal Advocacy Group (and Carrie A. Frias of Pueblo of Pojoaque, Legal Department, Santa Fe, New Mexico, with him on the brief), Sedona, Arizona, for Plaintiffs - Appellants.

          Edward Ricco (and Krystle A. Thomas with him on the brief), Rodey, Dickason, Sloan, Akin & Robb, P.A., Albuquerque, New Mexico, for Defendants -Appellees.

          Before KELLY, MURPHY, and BACHARACH, Circuit Judges.

          KELLY, Circuit Judge.

         Plaintiffs-Appellants Pueblo of Pojoaque and its governor, Joseph M. Talachy, (collectively "the Pueblo") appeal from the district court's dismissal of its claim for declaratory and injunctive relief based on the State of New Mexico's alleged unlawful interference with Class III gaming operations on the Pueblo's lands. Pueblo of Pojoaque v. New Mexico, 214 F.Supp.3d 1028 (D.N.M. 2016). Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

         Background

         The Pueblo of Pojoaque is a federally recognized Indian Tribe that operates two gaming facilities on its lands: the Buffalo Thunder Resort & Casino and the Cities of Gold Hotel & Casino. In July 2005, the Pueblo and New Mexico executed a Class III gaming compact pursuant to § 2710(d) of the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. § 2701–2721, that allowed it to operate casino-style gaming on its lands. This compact expired on June 30, 2015.

         Before its expiration, the Pueblo sought to enter into a new compact with the State. After its initial efforts proved unsuccessful, the Pueblo sued New Mexico for failing to negotiate under IGRA in good faith. New Mexico asserted the defense of Eleventh Amendment immunity, and the district court dismissed the suit pursuant to Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996).

         The Pueblo then submitted a Class III gaming proposal to the Secretary of the Interior ("the Secretary") pursuant to § 2710(d)(7) of IGRA and 25 C.F.R. § 291 ("Part 291"). IGRA allows the Secretary to establish Class III gaming procedures if a state refuses to agree to a compact, while the regulations in Part 291 indicated the Secretary could grant an Indian tribe permission to operate Class III gaming even without the state's consent in situations where there is no agreement and the state has asserted immunity from suit.

         In August 2014, the State sued the Department of the Interior ("DOI"), challenging the Secretary's authority to promulgate the regulations in Part 291, and the Pueblo intervened. On summary judgment, the district court held that the Part 291 regulations were invalid and barred the Secretary from taking any further action on the Pueblo's request for the issuance of gaming procedures under the regulations. New Mexico v. DOI, No. 1:14-cv-00695-JAP/SCY, 2014 WL 10298036 (D.N.M. Oct. 17, 2014). The DOI and the Pueblo of Pojoaque subsequently appealed.[1]

         On November 3, 2014, the Pueblo renewed compact negotiations with New Mexico. Again, meetings proved unsuccessful and no compact was reached.

         Then, on February 26, 2015, the New Mexico Gaming Control Board ("the Gaming Board") sought to perform its annual compliance review of the Pueblo's gaming operations in early November. But on May 6, the Gaming Board informed the Pueblo of its intent to conduct that review earlier (in advance of the expiration of the compact on June 30), and requested any and all contracts with gaming machine manufacturers, including lease, purchase, and service agreements. The Pueblo complied on June 24.

         On June 30, 2015, the compact expired at midnight. That same day, the United States Attorney for the District of New Mexico stated that, although continued gaming operations after the expiration of the compact would violate federal law, he would withhold enforcement action for the duration of the appeal in New Mexico v. Department of the Interior. The withholding of enforcement was conditioned on the Pueblo complying with the expiring compact and placing the funds it would otherwise pay the State in trust. The Gaming Board then announced that the U.S. Attorney's decision allowing the Pueblo's gaming operations to continue "provides no protection to banks, credit card vendors, gaming machine vendors, advertisers, bondholders, and others that are now doing business with an illegal gambling enterprise." Pueblo of Pojoaque, 214 F.Supp.3d at 1044.

         On July 15, 2015, the Gaming Board held a closed meeting to discuss issues regarding tribal gaming compliance. It then announced its conclusion that the Pueblo's casinos were operating illegally due to the absence of a compact, and it placed in abeyance approval of any license application or renewal for vendors who did business with the Pueblo. No other vendor's applications were placed in abeyance.

         Three days later, the Pueblo commenced this action, asserting in part that New Mexico failed to conduct compact negotiations in good faith in violation of IGRA and that individual defendants conspired under the color of state law to "deprive the federal right of the Pueblo and its members to be free of state jurisdiction over activities that occur on the Pueblo lands." 1 Aplt. App. 17.

         On September 9, 2015, the Gaming Board notified gaming manufacturer vendors doing business with the Pueblo that the Pueblo's continued gaming operations violated federal law according to the U.S. Attorney. The Gaming Board indicated that it would conduct an audit of the vendors' records to ensure compliance with state law and the Gaming Board's regulations. Accordingly, the Board requested production of the vendors' communications and business records with various casinos and tribal gaming operations, including the Pueblo's two Class III gaming facilities.

         On September 25, 2015, the Gaming Board cited all vendors doing business with the Pueblo. That same day, the Pueblo sought an injunction, contending that the Gaming Board's issuance of letters and citations was an impermissible attempt to assert jurisdiction over gaming operations on tribal lands, despite the termination of New Mexico's jurisdiction over such activities upon the expiration of the compact.

         On October 7, 2015, the district court granted the preliminary injunction and enjoined the State "from taking any action that threatens, revokes, conditions, modifies, fines, or otherwise punishes or takes enforcement against any licensee in good standing with the New Mexico Gaming Control Board based wholly or in part on grounds that such licensee is conducting business with the Pueblo." Pueblo of Pojoaque v. New Mexico, No. 1:15-cv-0625 RB/GBW, 2015 WL 10818855, *10 (D.N.M. Oct. 7, 2015). New Mexico appealed the ruling, and the appeal was abated pending the issuance of a decision on the challenged regulations in 25 C.F.R. § 291.

         Meanwhile, on October 21, 2015, the Gaming Board held a formal, public meeting, during which it considered 29 applications by vendors for gaming license renewals. The Board deferred all nine applications by vendors doing business with the Pueblo and did not set a date for future consideration. As for vendors not doing business with the Pueblo, the Board approved 18 applications, deferred one for a one-month period, and took no vote on another.

         In response to the Gaming Board's actions, the Pueblo urged the court to issue an order to show cause why the Board should not be held in contempt of court for violating the preliminary injunction. According to the Pueblo, the Board's conduct in threatening those doing business with the Pueblo constituted an attempt to assert jurisdiction over gaming operations on Pojoaque lands. The district court denied the motion on April 21, 2016, holding that the Gaming Board's license deferrals did not "threaten" the vendor applications within the meaning of the preliminary injunction. Pueblo of Pojoaque v. New Mexico, No. CIV 15-0625 JB/GBW, 2016 WL 3135644, *13–16 (D.N.M. Apr. 21, 2016).

         The parties then filed additional motions, including the State's and the individual defendants' motions to dismiss, the rulings which form the basis of this appeal. Notably, the district court determined that the State's interlocutory appeal of the preliminary injunction did not divest the district court of jurisdiction to proceed to the merits of the case. Pueblo of Pojoaque, 214 F.Supp.3d at 1093–96. It then dismissed the Pueblo's claims, concluding that IGRA does not preempt New Mexico's regulatory actions with respect to non-Indian, state-licensed vendors doing business with non-Indian gaming operators. Id. at 1096–109.[2] The district court entered final judgment, stayed the effects of the preliminary injunction, and issued an indicative ruling that it would vacate or dissolve the preliminary injunction on remand. See Fed. R. Civ. P. 62(c), 62.1.

         Given the relief obtained, the State voluntarily dismissed its appeal from the preliminary injunction. The Pueblo then sought to stay the district court's judgment and restore the preliminary injunction. The district court declined to do so, but we entered and extended a temporary injunction against the State mirroring the preliminary injunction entered by the district court, i.e. "from taking any action that threatens, revokes, conditions, modifies, fines, or otherwise punishes or takes enforcement action against any licensee in good standing with the New Mexico Gaming Control Board based wholly or in part on grounds that such licensee is conducting business with the Pueblo of Pojoaque." Order, Pueblo of Pojoaque v. New Mexico, No. 16-2228 (10th Cir. Mar. 14, 2017).

         On appeal, the Pueblo argues that the district court did not have jurisdiction to proceed to the merits given the interlocutory appeal of the preliminary injunction and, even if it did, it erred in concluding that IGRA does not preempt New Mexico's regulatory action. Our review is de novo. Dutcher v. Matheson, 733 F.3d 980, 985 (10th Cir. 2013) (jurisdiction); Ute Mountain Ute Tribe v. Rodriguez, 660 F.3d 1177, 1185 (10th Cir. 2011) (preemption).

         Discussion

         A. ...


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