November 30, 2017

Connecticut, tribes sue feds to break deadlock on third casino

Backed by the administration of Gov. Dannel P. Malloy, the Mashantucket Pequot and Mohegan tribal nations filed a lawsuit Wednesday to force Interior Secretary Ryan Zinke to approve their gaming agreements with Connecticut and clear the way for them to jointly develop a commercial casino in East Windsor.

The lawsuit filed in U.S. District Court in Washington, D.C., comes one month after the tribes and the state's congressional delegation failed to move the Department of the Interior off its puzzling stance of neither rejecting nor approving amendments to the tribes' gaming compacts.

The refusal to give a clear answer was a victory for MGM Resorts International, which has lobbied for two years in Hartford and Washington, D.C., to block the East Windsor casino and protect the market for an MGM casino scheduled to open next year in nearby Springfield.

By suing Zinke, Malloy and the tribes appear to be trying to move decision-making in the case away from the Department of the Interior to the Department of Justice, where lawyers now must decide how or whether to defend Zinke's failure to meet timetables for reviewing amendments to gaming compacts.

The tribes had signaled their readiness to sue in October when two law firms with expertise in Indian gaming issues put Zinke on notice that the Indian Gaming Regulatory Act gave him only two options: To approve or disapprove the amendments within 45 days of receipt. Under federal law, inaction equates to approval, they said.

The only question was whether Malloy would direct Attorney General George Jepsen to join in the litigation. He indicated Wednesday it was not a hard call.

"The State of Connecticut over the years has maintained a longstanding partnership and compact with the Mohegan and Mashantucket Pequot tribal nations, and they employ thousands of Connecticut residents at their casinos," Malloy said. "State law requires that these compact amendments are in fact approved. That's why I have asked the attorney general to file this action. We need clarity and certainty with respect to this issue."

Connecticut conditioned its authorization of the tribes' East Windsor casino on Department of the Interior acceptance of the amendments to gaming compacts. That was a means of ensuring that allowing the tribes' to develop a commercial casino off tribal land would not invalidate agreements that grant the tribes exclusive gaming rights in Connecticut in return for a 25 percent share of slots revenue at their tribal casinos, Foxwoods Resort and Mohegan Sun.

The lawsuit claims Zinke ignored a 45-day deadline for acting on the amendments, as well as a second 90-day deadline for acknowledging its inaction in the Federal Register, which the state and tribes say would be tantamount to approval under IGRA, the Indian Gaming Regulatory Act.

"IGRA and its implementing regulations provide that, in the event the Secretary fails to affirmatively approve or disapprove a compact amendment, the Secretary must publish within 90 days of receipt, notice in the Federal Register that the amendment is 'considered to have been approved,' or is 'deemed approved,' by operation of law; IGRA and its implementing regulations leave the Secretary with no discretion to proceed in any other manner," they said in the suit.

The Department of Interior has steadfastly refused to comment on the reasons for Zinke's refusal to formally act on the gaming compact amendments.

Michael S. Black, a career BIA employee who is now the acting assistant secretary for Indian affairs, wrote a letter in September saying the Interior department saw no reason to act on the gaming amendments. That represented a stunning reversal, coming six months after another career official, James Cason, assured the tribes in writing that approval of amendments to the compact was virtually certain.

Uri Clinton, the senior vice president and legal counsel at MGM, said Black was within his rights in September to return the amendments without approval or rejection, saying that maintained the status quo.

"The tribes are wrong when they insist that their amendment is deemed approved by default," Clinton said. "Approving a new, third casino is the opposite of maintaining the status quo. Precedent shows that an amendment is not 'deemed approved' when Interior returns it, plain and simple. And no lawsuit, not even one backed by the governor, changes those basic facts."

MGM intends to seek legislative authorization next year to build a casino in Bridgeport, giving it access to the New York market.

Cason and Zinke were honored by the Mohegans during a visit in June when the tribe hosted a meeting of the National Congress of American Indians. Zinke did not mention the casino issue in his remarks to the association and declined comment as he departed.

At the time, Cason downplayed the role his letter played in neutralizing an MGM talking point to the legislature that the third casino would run afoul of the Bureau of Indian Affairs. His letter said that history was on the tribes' side when they say that the Bureau of Indian Affairs or Department of the Interior have respected existing compacts between the states and tribes. "It was a simple matter," he said in June.

The simple matter quickly grew complicated, the tribal leaders said Wednesday.

"This has been a long process and through every step along the way, we kept DOI informed about our intentions and were clear about exactly what we were asking them to do," said Rodney Butler, the Pequots' tribal chairman. "But despite this good faith effort and repeated assurances by the department, their failure to publish our approval letter has forced us to take this action. We hope for a quick resolution as we move forward with our plans to build a new facility in East Windsor."

Kevin Brown, the tribal chairman of the Mohegans, said Zinke's failure to act should be a concern to all tribes.

"The Department of the Interior has a responsibility to Native American tribes, and their failure to act on this issue sets a very dangerous precedent for Indian Country across the United States," Brown said. "The law is clear – after 45 days DOI did not disapprove our compact amendments, therefore it is deemed approved. By not doing so, the department is in clear violation of federal law."

The tribes and state are asking the court to issue an order or writ of mandamus directing Zinke "to publish notice of approval of the compact amendments in the Federal Register" and declare the amendments have been approved as a matter of law.

U.S. Sens. Richard Blumenthal and Chris Murphy of Connecticut, as well as U.S. Reps. John B. Larson and Joe Courtney issued a joint statement supporting the legal action:

"The law is clear—the Department of the Interior has approved the amendments and must now publish such approval. Court action to require publication of approval is necessary because Interior's inaction violated federal law. Interior must follow the law and do what is best for both the tribes and Connecticut."

Courtney represents eastern Connecticut, home to the two tribes; Larson's district includes East Windsor.

State Sen. Cathy Osten, D-Sprague, whose district includes Ledyard and Montville, home to the two tribal casinos, also welcomed the litigation.

"This is good news for eastern Connecticut, because there are more than 10,000 jobs in the region hanging in the balance with this federal decision. We passed a bipartisan bill nearly six months ago to defend ourselves against an outside effort to destroy jobs and decimate one of the most important industries in our state," she said. "The federal government is now long past its deadline to act on the agreements that the representatives of the people of Connecticut have deemed vital to the health and prosperity of our state. I applaud the governor and tribes for their action today on behalf of the people of Connecticut and our best interests."

Dentons, a global law firm, is representing the Pequots in the litigation. The Mohegans are represented by Drummond Woodsum, a New England firm whose specialties include Indian legal issues.

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