Tribe Tells 10th Circuit New Mexico Overregulates Casinos

DENVER (CN) – Members of the Pueblo of Pojoaque Tribe told a 10th Circuit panel Tuesday morning that New Mexico is prejudicing vendors against working on the reservation to strong-arm the tribe into handing over more of its casino proceeds.

The Pueblo of Pojoaque Reservation is located in the Santa Fe, New Mexico, area. Its members claim the state failed to negotiate a new gaming compact with the reservation after the most recent one expired in June 2015.

The Pueblo sued the state as soon as the compact expired, arguing that the state was illegally attempting to increase its gaming taxes as a condition of renewing the compact. After their impasse, the Pueblo claims the state sent out notices to the Pueblo’s casino vendors, telling them that if they did not cease working with the Pueblo, their business licenses would be revoked.

In September of last year, U.S. District Judge James Browning dismissed the Pueblo’s case from the District of New Mexico, citing the Indian Gaming Regulatory Act.

“The plaintiffs’ principal response is that the defendants improperly determined that Pojoaque Pueblo’s Class III gaming in the absence of a compact is illegal,” the order says. “Under IGRA, ‘a tribe cannot conduct class III gaming on its lands without a compact.’”

The Pueblo appealed, bringing its case before a panel comprised of U.S. Circuit Judges Michael Murphy, Paul Kelly and Robert Bacharach Tuesday morning.

Scott J. Crowell of Sedona, Arizona, spoke for the Pueblo, reiterating that New Mexico was overstepping its bounds.

“It is the federal government that has the jurisdiction over the state’s gaming activities,” Crowell said. “The state is trying to usurp that jurisdiction.”

Crowell said the state was penalizing the Pueblo by scaring casino gaming vendors out of doing business with the reservation.

“They issued citations saying their licenses were in jeopardy unless they ceased doing business with the Pueblo,” Crowell said.

“If you do business with an illegal operation, [they’ll] de-license you,” Judge Kelly said. “Absent a compact, it’s illegal.”

“I take issue with that,” Crowell said. “The IGRA … does say the state is obligated to negotiate.”

“You said you needed a compact,” Judge Murphy said. “Does the Pueblo have a compact?”

“The Pueblo does not,” Crowell said. “The Pueblo is now trying to pursue it to cure the defect. It needs a compact or it needs a remedy in lieu of a compact.”

Edward Ricco, arguing for the state, told the panel that New Mexico wasn’t imposing on the reservation.

“The state is regulating its licensees’ conduct off the reservation,” Ricco said. “That’s a legitimate interest of the state.

“The IGRA does not preempt the state’s actions,” he continued. “Those actions would affect state-licensed, non-Indian vendors.”

Judge Murphy asked Ricco if the state’s actions had a “negative impact on gaming in the Pueblo.”

“Yes,” Ricco said. “There have been impacts on its gaming regulations.

“We are regulating [the state’s] licensees,” he repeated. “It’s not the state imposing its regulations on the Pueblo.”

Judge Murphy said that, with or without intent, the state of New Mexico could have “precipitated” the negative outcome for the Pueblo.

“That’s cause and effect,” Judge Murphy said.

According to a February press release from New Mexico’s Gaming Control Board, the state’s 14 casinos with valid compacts paid New Mexico over $12 million last quarter.

Ricco is with the Rodney Law Firm in Albuquerque, New Mexico.