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State of New Mexico v. Department of Interior

United States Court of Appeals, Tenth Circuit

April 21, 2017

STATE OF NEW MEXICO, Plaintiff-Appellee,
v.
DEPARTMENT OF THE INTERIOR; RYAN ZINKE, in his official capacity as Secretary of the Interior, [*] Defendants-Appellants, and PUEBLO OF POJOAQUE, a federally-recognized Indian Tribe, Intervenor Defendant-Appellant.

         Appeal from the United States District Court for the District of New Mexico (D.C. No. 1:14-CV-00695-JAP-SCY)

          J. David Gunter II, U.S. Department of Justice, Environment & Natural Resources Div., Washington, D.C. (John C. Cruden, Assistant Attorney General, Steven Miskinis and Yosef M. Negose, U.S. Department of Justice, Environment & Natural Resources Div., Washington, D.C., with him on the briefs), for Defendants-Appellants.

          Steffani A. Cochran, Pueblo of Pojoaque Legal Department, Santa Fe, New Mexico, and Scott Crowell, Crowell Law Offices, Sedona, Arizona, for Intervenor Defendant-Appellant.

          Eric D. Miller, Perkins Coie, Seattle, Washington (Jennifer A. MacLean, Perkins Coie, Washington, D.C., and Jeremiah L. Ritchie, Office of the Governor, Santa Fe, New Mexico, with him on the briefs), for Plaintiff-Appellee.

          Before HOLMES, McHUGH, and MORITZ, Circuit Judges.

          HOLMES, Circuit Judge.

         The State of New Mexico ("the State" or "New Mexico") brought suit against the Department of the Interior ("DOI") to challenge its authority to promulgate the regulations found at 25 C.F.R. § 291 et seq. ("Part 291"). The challenged regulations concern the process under which Indian tribes and states negotiate compacts to allow gaming on Indian lands. Congress established in the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. § 2701 et seq., that states have a duty to negotiate in good faith with tribes regarding compacts and that tribes could enforce this duty by bringing suit in federal court. As the Supreme Court would later decide, however, Congress lacked the authority to make states subject to suit by Indian tribes in federal court. Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996). However, the Court left intact the bulk of IGRA, and Congress has not amended it in the intervening years.

         More specifically, IGRA provides that when a tribe believes a state has failed to negotiate in good faith, the tribe may sue in federal court to, inter alia, obtain an order enjoining a state to negotiate a gaming compact and potentially subjecting the state to court-ordered mediation or the issuance of gaming procedures by the Secretary of the Interior ("the Secretary") without the state's consent. However, the Supreme Court, in Seminole Tribe, made clear that a state can invoke sovereign immunity in response to such a suit, thus effectively sidestepping the process that IGRA contemplates. See id. at 47 ("We hold that notwithstanding Congress' clear intent to abrogate the States' sovereign immunity, the Indian Commerce Clause [U.S. Const. art. I, § 8, cl. 3] does not grant Congress that power, and therefore [25 U.S.C.] § 2710(d)(7) cannot grant jurisdiction over a State that does not consent to be sued."). In response to Seminole Tribe, DOI promulgated Part 291 to allow the Secretary to prescribe gaming regulations for a tribe following the dismissal of a tribe's suit against a state on sovereign-immunity grounds.

         As relevant here, the Part 291 process was implicated after the Pueblo of Pojoaque tribe ("the Pojoaque" or "the Tribe") sued New Mexico under IGRA and the State asserted sovereign immunity. Following the dismissal of the case on sovereign-immunity grounds, the Pojoaque asked the Secretary to prescribe gaming procedures pursuant to Part 291. Before the Secretary did so, New Mexico filed the present suit, seeking a declaration that the Part 291 regulations are not a valid exercise of the Secretary's authority. The Pojoaque intervened.

         The district court granted New Mexico's motion for summary judgment and denied that of DOI, holding that the Part 291 regulations are invalid and barring the Secretary from taking any further action on the Pojoaque's request for the issuance of gaming procedures under them. DOI and the Pojoaque now appeal from this order; they challenge the State's standing, the ripeness of the dispute, and the district court's holding that Part 291 is an invalid exercise of the Secretary's authority. Exercising our jurisdiction under 28 U.S.C. § 1291, we conclude that the dispute is justiciable and affirm the district court's judgment.

         I

         A

         In 1987, the Supreme Court held that states lack regulatory authority over gaming activities on Indian land except where Congress has expressly provided for such authority. California v. Cabazon Band of Mission Indians, 480 U.S. 202, 207 (1987). Following this ruling, Congress enacted IGRA, 25 U.S.C. § 2701 et seq., which gives states a role in the regulation of Indian gaming. The act divides gaming into three classes. See 25 U.S.C. § 2703. The present case concerns Class III gaming, which includes the most lucrative forms of gaming. 25 U.S.C. § 2703(8); see Seminole Tribe, 517 U.S. at 48 ("Class III gaming . . . includes such things as slot machines, casino games, banking card games, dog racing, and lotteries."). Under IGRA, Class III gaming activities "shall be lawful on Indian lands only if such activities are conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State [where the gaming is located] . . . that is in effect." 25 U.S.C. § 2710(d)(1)(C). An Indian tribe desiring such a compact "shall request the State . . . to enter into negotiations for the purpose of entering into a Tribal-State compact governing the conduct of gaming activities. Upon receiving such a request, the State shall negotiate with the Indian tribe in good faith to enter into such a compact." 25 U.S.C. § 2710(d)(3)(A).

         This case concerns how the process unfolds in the event that these negotiations do not commence following a tribe's request or are unsuccessful. The statute provides that if no agreement is reached within 180 days of a tribe's request for negotiation, the tribe may initiate a "cause of action . . . arising from the failure of [the] State to enter into negotiations with the Indian tribe for the purpose of entering into a Tribal-State compact . . . or to conduct such negotiations in good faith." 25 U.S.C. § 2710(d)(7)(A)(i) and (B)(i). It further provides that federal district courts shall have jurisdiction over such a suit. 25 U.S.C. § 2710(d)(7)(A)(i). If the district court in which a suit is filed finds that the state has failed to negotiate in good faith, "the court shall order the State and the Indian Tribe to conclude such a compact within a 60-day period." 25 U.S.C. § 2710(d)(7)(B)(iii). If the parties fail to reach an agreement within sixty days, the statute outlines a process under which the tribe and the state each would submit a proposed compact to a mediator, and the mediator would select one. 25 U.S.C. § 2710(d)(7)(B)(iv). At that point, the state may consent to the selected compact or it may decline to do so. If the state does not consent, the mediator is required to notify the Secretary, who "shall prescribe, in consultation with the Indian tribe, procedures . . . consistent with the proposed compact selected by the mediator . . . under which Class III gaming may be conducted." 25 U.S.C. § 2710(d)(7)(B)(vii)(I) to (II).

         The Supreme Court's ruling in Seminole Tribe complicated the process outlined above. In that case, the Court held, in the context of the Indian Commerce Clause, that "the Eleventh Amendment prevents congressional authorization of suits by private parties against unconsenting States, " and therefore a case against a state concerning whether it has failed to negotiate with a tribe in good faith cannot proceed unless the state has statutorily or otherwise waived its sovereign immunity or fails to assert its immunity as a defense.[1] 517 U.S. at 72. However, states still retain the obligation to negotiate in good faith under 25 U.S.C. § 2710(d)(3)(A).

         Following Seminole Tribe, DOI issued the Part 291 regulations to provide an alternative administrative remedial scheme that applies when a state asserts sovereign immunity in a § 2710(d)(7) suit. 25 C.F.R. § 291.1. Under these regulations, when a district court dismisses a suit following a state's assertion of sovereign immunity, the tribe "may ask the Secretary to issue Class III gaming procedures" by submitting proposed procedures.[2] 25 C.F.R. §§ 291.3, 291.4. Upon receipt of such a request, the Secretary must "notify the Indian tribe in writing whether the Indian tribe meets the eligibility requirements in § 291.3." 25 C.F.R. § 291.6. If the tribe meets those requirements, which are not directly at issue here, then the Secretary is required to submit the tribe's proposed procedures to the state, which then has sixty days to comment on the proposal. 25 C.F.R. § 291.7(a), (b). The Secretary "will also invite the [state] to submit an alternative proposal." 25 C.F.R. § 291.7.

         The nature of the remainder of the process depends on whether the state submits its own proposal. In cases in which the state declines to do so by the end of the sixty-day comment period, the regulations set forth a process under which the Secretary ultimately approves the tribe's proposal, and accordingly issues "Secretarial Procedures" allowing gaming on the tribe's land, or disapproves the tribe's proposal for one of seven reasons listed in Section 291.8(a). See 25 C.F.R. § 291.8. On the other hand, if the state submits an alternative proposal within the sixty-day period, the Secretary must appoint a mediator to "convene a process to resolve differences between the two proposals." 25 C.F.R. § 291.9(b). The mediator is charged with "select[ing] from the two proposals the one that best comports with the terms of IGRA and any other applicable Federal law. The mediator must submit the proposal selected to the Indian tribe, the State, and the Secretary." 25 C.F.R. § 291.10(b). Following the mediator's decision, the Secretary must either approve the chosen proposal, and issue Secretarial Procedures, or disapprove it for one of the seven reasons listed in Section 291.11(b) (which mirror those found in Section 291.8(a)). 25 C.F.R. § 291.11(a) and (b). If the proposal is not approved at this stage, then the Secretary "must prescribe appropriate [Secretarial Procedures] within 60 days under which Class III gaming may take place that comport with the mediator's selected proposal as much as possible, the provisions of IGRA, and the relevant provisions of the laws of the State." 25 C.F.R. § 291.11(c).

         B

         The genesis of this case is the Pojoaque's attempt to negotiate a Class III gaming compact with New Mexico. More than 180 days after the Pojoaque submitted a request to negotiate with the State, the Tribe brought suit under IGRA in federal district court, seeking a declaration that New Mexico had failed to negotiate in good faith. New Mexico asserted sovereign immunity, and the court dismissed the case on that basis. The Pojoaque then asked the Secretary to initiate the Part 291 process and issue Class III gaming procedures. The Secretary subsequently informed New Mexico that DOI had determined, pursuant to 25 C.F.R. § 291.6, that the Pojoaque had met the eligibility requirements of the Part 291 regulations; the Secretary thus invited the State to comment on the Pojoaque's proposal or submit an alternative proposal within sixty days.

         Before the end of the sixty-day period, New Mexico filed this case against the Secretary, seeking a declaration that the Part 291 regulations are invalid and an order enjoining DOI from developing Secretarial Procedures for the Pojoaque pursuant to the regulations. The Tribe filed a motion to intervene; the district court granted it, but only on a permissive basis, pursuant to Federal Rule of Civil Procedure 24(b). More specifically, the court allowed the Tribe "to intervene as a defendant . . . and join in the other Defendants' motion for summary judgment on the purely legal question of [the regulations'] validity." Aplee.'s Supp. App. at 71-72. New Mexico then filed a motion for a preliminary injunction, which the district court denied. Following the denial of its motion, the State submitted comments and an alternative proposal to the Secretary. See Aplee.'s Br. at 14.[3]

         The State, and the Secretary joined by the Pojoaque, subsequently moved for summary judgment. The district court granted New Mexico's motion and denied that of the Secretary, which also effectively denied the Tribe relief. The court ruled that (1) New Mexico had standing to bring suit, (2) its challenge was ripe for judicial review, (3) the Part 291 regulations were not a valid exercise of the Secretary's power under IGRA, and (4) Seminole Tribe did not require the court to hold any additional IGRA provisions invalid, an issue that the Pojoaque had raised in its memorandum in support of the Secretary's motion. The court thus barred the Secretary and DOI "from taking any further action to enforce 25 C.F.R. § 291 et seq." Aplts.' App. at 66. The Secretary and the Pojoaque now appeal.

         II

         On appeal, DOI and the Pojoaque contend that (1) New Mexico lacks standing to challenge the Part 291 regulations, (2) the State's claim is not ripe, and (3) the regulations are a valid exercise of the Secretary's authority under IGRA. The Pojoaque further asserts that if we were to conclude that Part 291 is invalid, we should undertake a severability analysis and, in light of the Supreme Court's decision in Seminole Tribe, strike down additional portions of IGRA because IGRA's jurisdiction-granting clause is not severable. Below, we first determine that New Mexico has standing and its claim is ripe; thus, we may properly exercise jurisdiction. Next, we conclude that the Part 291 regulations are not a valid exercise of the Secretary's authority; specifically, they are invalid because they are foreclosed by IGRA's unambiguous text. Lastly, we determine that the severability issue raised by the Pojoaque is properly before us but that the jurisdiction-granting clause is severable. We thus affirm the district court's grant of New Mexico's motion for summary judgment and its denial of the Secretary's motion for summary judgment.

         A

         DOI first contends that New Mexico lacks standing.[4] "The constitutional requirements for standing are (1) an injury in fact, (2) a causal connection between the injury and the challenged act, and (3) a likelihood that the injury will be redressed by a favorable decision." Roe No. 2 v. Ogden, 253 F.3d 1225, 1228-29 (10th Cir. 2001) (citing Vt. Agency of Nat. Res. v. United States ex. rel. Stevens, 529 U.S. 765, 771 (2000)). Before us, DOI challenges New Mexico's standing only on the basis of the first requirement, arguing that the State has suffered no injury in fact. The district court rejected this argument, finding that the State had demonstrated an injury sufficient for standing purposes. We review this finding de novo, see Roe No. 2, 253 F.3d at 1228, and conclude that New Mexico has demonstrated an injury in fact on two independent bases: first, it has suffered a procedural injury in that the Part 291 regulations have stripped New Mexico of certain procedural protections or benefits conferred by IGRA; and, second, it has been subjected by DOI to a harmful forced choice regarding whether to participate in the allegedly unlawful Part 291 process. Our confidence in our holding on both fronts, moreover, is bolstered by our recognition that, as a state, New Mexico is entitled to special solicitude on the issue of standing.

         1

         New Mexico has standing because it has suffered a procedural injury. The Supreme Court has recognized that, for standing purposes, a party's injury may be a procedural one "so long as the procedures in question are designed to protect some threatened concrete interest of [the party] that is the ultimate basis of [its] standing." Lujan v. Defs. of Wildlife, 504 U.S. 555, 573 n.8 (1992); see also Summers v. Earth Island Inst., 555 U.S. 488, 496 (2009) (recognizing that standing may be grounded in "a procedural right [that a person has been accorded] to protect his concrete interests" (quoting Lujan, 504 U.S. at 572 n.7)); WildEarth Guardians v. EPA, 759 F.3d 1196, 1205 (10th Cir. 2014) (noting that, to demonstrate an injury in fact, a plaintiff need only show that the procedures at issue "are designed to protect some threatened concrete interest of [the person] that is the ultimate basis of standing" (alteration in original) (quoting S. Utah Wilderness All. v. Office of Surface Mining Reclamation & Enf't, 620 F.3d 1227, 1234 (10th Cir. 2010))). To establish standing in such circumstances, a plaintiff "need show only that compliance with the procedural requirements could have better protected its concrete interests, " WildEarth Guardians, 759 F.3d at 1205, and thus that the procedural violation created a "risk of real harm, " Spokeo, Inc. v. Robins, ___ U.S. ___, 136 S.Ct. 1540, 1549 (2016). Further, the Court observed in Lujan that "'procedural rights' are special: The person who has been accorded a procedural right to protect his concrete interests can assert that right without meeting all the normal standards for redressability and immediacy." Lujan, 504 U.S. at 572 n.7 ("Thus, under our case law, one living adjacent to the site for proposed construction of a federally licensed dam has standing to challenge the licensing agency's failure to prepare an environmental impact statement, even though he cannot establish with any certainty that the statement will cause the license to be withheld or altered, and even though the dam will not be completed for many years.").

         We have frequently found standing based on a procedural injury in cases in which environmental groups have alleged that an agency failed to follow the required procedures in taking an action that negatively impacted members' concrete interest in protecting and enjoying the affected land. See, e.g., WildEarth Guardians, 759 F.3d at 1205 (concluding that the failure of the Environmental Protection Agency ("EPA") to consult with another federal regulatory agency before issuing a federal implementation plan was a procedural injury that supported standing because adherence to procedural requirements could have better protected plaintiff members' concrete interest in enjoyment of land); S. Utah Wilderness All., 620 F.3d at 1235 (concluding that plaintiff had standing to challenge Office of Surface Mining Reclamation and Enforcement's failure to prepare a recommendation to DOI regarding a private party's mining plan because this procedural injury affected plaintiff's concrete interest in protecting the area where mining was to take place); see also Summers, 555 U.S. at 497 (suggesting that plaintiffs would have had standing based on procedural injury had they been denied the opportunity to file comments on a Forest Service plan that would have impinged on their concrete interest in observing nature in the specific area affected).

         In addition to environmental cases, courts have also relied on the procedural-injury doctrine in other contexts in which statutorily mandated procedures were designed to protect plaintiffs' interests. See, e.g., Parsons v. U.S. Dep't of Justice, 801 F.3d 701, 712-13 (6th Cir. 2015) (concluding that "Juggalos, " fans of the Insane Clown Posse musical group, had standing where they alleged that the National Gang Intelligence Center had violated the Administrative Procedure Act ("APA") in issuing a report on gang activity without adhering to required procedures, thus causing them to be discussed in a report, which in turn caused concrete harm to their reputational interests); Beeman v. TDI Managed Care Servs., Inc., 449 F.3d 1035, 1039-40 (9th Cir. 2006) (holding that plaintiff pharmacies "ma[d]e out a procedural injury: the failure on the part of the [Pharmacy Benefit Managers] to follow the statutory procedures requiring [that] they conduct studies and provide them to third parties, " a failure that threatened the pharmacies' interest in the outcome of future third-party payor decisions).

         In this vein, New Mexico has demonstrated a procedural injury sufficient for Article III standing in the present case. Specifically, New Mexico asserts that the Part 291 regulations deprive it of a procedural right that IGRA accords states-specifically, the right to a judicial finding that it has failed to negotiate in good faith, before a mediator or the Secretary are authorized to become involved in defining the terms under which Class III gaming can be conducted within its borders. See 25 U.S.C. § 2710(d)(7)(B)(iii)-(vii) (outlining the process under which a tribe may ask the Secretary to prescribe gaming procedures following a judicial finding that a state has failed to negotiate in good faith). Indeed, absent a judicial finding that a state has not negotiated in good faith, a tribe cannot secure Class III gaming under the regime of IGRA without directly engaging with a state and hammering out the terms of a compact. See Texas v. United States, 497 F.3d 491, 494 (5th Cir. 2007) ("If the court finds the state negotiated in good faith, the tribe's proposal [for Class III gaming] fails"); id. at 508 ("IGRA allows Class III gaming to be imposed by the Secretary following exhaustion of the judicial good-faith/mediation process . . . ."). This procedural right is designed to protect the State's interest in helping to shape without federal interference the terms under which the Pojoaque may conduct Class III gaming within its territory. Even DOI recognizes that the State's interest in such gaming terms is not insubstantial or speculative. See Aplt. DOI's Opening Br. at 22 ("[T]he State's concrete interest lies in the terms on which a tribe may (or may not) conduct gaming-for example, the types of gaming allowed or whether the tribe will rely on the State for particular services."). It is clear to us that the loss of this procedural right-which the Part 291 regulations would allegedly effect-at least threatens this concrete interest by fundamentally changing the process under which a state and a tribe negotiate a compact and, more specifically, altering the circumstances under which the tribe may bypass the state and seek relief from DOI. See Texas, 497 F.3d at 508 ("Under the Secretarial procedures, however, it matters not that a state undertook good-faith negotiations with the tribe: The Secretary may prescribe Class III gaming irrespective of a state's good faith."). This substantial risk to this interest establishes the requisite injury in fact for standing purposes. See Spokeo, 136 S.Ct. at 1549 (noting that a procedural violation may amount to an injury in fact where it creates a "risk of real harm"). We therefore conclude that New Mexico has demonstrated that it has suffered a procedural injury as a result of the Part 291 regulations.

         The validity of this conclusion is underscored by the D.C. Circuit's analysis in Delaware Dep't of Nat. Res. & Envtl. Control v. Fed. Energy Regulatory Comm'n, 558 F.3d 575 (D.C. Cir. 2009), which discusses the Fifth Circuit's reasoning in Texas v. United States, a case in which Texas challenged the Part 291 regulations on the same basis that New Mexico has here and the court held that Texas had standing to do so.[5] Although the Fifth Circuit's opinion did not explicitly characterize the injury that Texas had suffered as a procedural one, in later interpreting its injury-in-fact ruling, the D.C. Circuit commented that

the key to the court's conclusion that Texas had suffered an injury-in-fact was that Texas had been deprived of an alleged statutory procedural protection-a court finding on whether Texas had negotiated in bad faith-that bore on the likelihood of an ultimate concrete injury, i.e., the Secretary's approval of an Indian gaming proposal.

Delaware Dep't of Nat. Res. & Envtl. Control, 558 F.3d at 579. Thus, the D.C. Circuit reasoned, the injury that prompted the Texas court to find standing was the procedural injury to Texas of being deprived of a bad-faith finding. This characterization of Texas aligns perfectly with our conclusion that New Mexico has suffered a procedural injury sufficient to support standing in the present case by being deprived of a judicial determination regarding its alleged failure to negotiate in good faith.

         Here, New Mexico has a procedural right to a judicial determination of bad faith followed by the statutory mediation process. That process is designed to protect a state's economic and other interests in the regulation of Class III gaming on tribal land, and the circumvention of the statutory process threatens to harm those interests by allowing the issuance of gaming procedures without the state's consent. This deprivation of a procedural right designed to protect a concrete interest is sufficient to establish standing.

         2

         In addition to the procedural injury discussed above, we alternatively conclude that New Mexico has suffered an injury because the Part 291 regulations have imposed a forced choice on it: At the end of the process that the regulations contemplate, the Secretary will necessarily issue procedures that will govern the Tribe's Class III gaming activities in New Mexico; if New Mexico wants to have any input into the content of those procedures, it is forced (i.e., compelled) to participate in the Part 291 process, even though it deems that process unlawful, thereby suffering a cognizable injury for standing purposes. Put another way, the Part 291 regulations injure New Mexico by forcing it to choose between participating in a process it considers unlawful and forgoing any benefit from that allegedly unlawful process-viz., the benefit of being able to offer input, presumably beneficial to its interests, relating to the content of those procedures. See Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 582 (1985) ("[A]ppellees clearly have standing to contest EPA's issuance of follow-on registrations pursuant to what they contend is an unconstitutional statutory provision. They allege an injury from EPA's unlawful conduct-the injury of being forced to choose between relinquishing any right to compensation from a ...


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