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Iowa, Nebraska Urge Appeals Court to Reverse Approval of Tribe’s Casino

Property obtained by the Ponca Tribe in an Iowa city is too far from its Nebraska land to qualify for a casino, the states argue, but the federal government says the law allows it.

(CN) --- A Native American casino on the Iowa-Nebraska border should not have been approved by the federal government because the site purchased by the Ponca Tribe does not qualify as an Indian gaming establishment, the two states told a federal appeals court Tuesday.

Iowa Assistant Attorney General John Lundquist told the St. Louis-based Eighth Circuit that the question for the three-judge panel is whether Congress created an exception in federal Indian gaming law that allowed a casino on Iowa land acquired by Nebraska’s Ponca Tribe far beyond its historic reservation. Lundquist argued that it did not.

In response, Mary Gabrielle Sprague, a lawyer for the U.S. Justice Department, told the judges that when the statute is read in its entirety and in the context of related Indian lands regulation, it’s clear that Congress intended to make an exception that permitted the casino.

The Ponca Tribe of Nebraska purchased the 4.8-acre site in Carter Lake, Iowa, in 1999, and originally planned to build a health clinic for tribal members there. Eighteen years later, the tribe instead got permission from the National Indian Gaming Commission to build a casino. The city of Council Bluffs, Carter Lake’s neighbor, filed suit in federal court to block the casino, and was joined by Nebraska and Iowa as intervenors.

The states and Council Bluffs claim the Poncas’ Carter Lake land was not eligible for federal designation as “restored lands” under the 1990 Ponca Restoration Act, in which Congress allowed the Ponca to expand their lands to compensate for the loss of the tribe’s historic reservation. The plaintiffs argue that the Ponca Restoration Act limited the tribe to adding land in only two specified Nebraska counties – Boyd and Knox -- 100 miles from Carter Lake.

U.S. District Judge Stephanie Rose in Des Moines ruled in 2019 against the plaintiffs, whose appeal was heard by the Eighth Circuit on Tuesday. While the case was before the district court in 2018, the tribe constructed and opened a gaming facility, Prairie Flower, on the Carter Lake parcel.

In his argument for the states and city Tuesday, Lundquist boiled the issue down to one question: “Does the Ponca Restoration Act establish geographic limitations on land acquisition that can be considered taken into trust as part of the restoration of land under the Indian Gaming Regulatory Act’s so-called historic lands exception to its prohibition on gaming on lands acquired after the enactment date?”

The answer, he said, is in the clear language of the statute.

“The court need not look any farther than the language used in the Restoration Act to find the answer: Knox and Boyd counties in Nebraska are the only geographic areas specifically identified in the [Ponca Restoration Act] as areas where the secretary can take land into trust for the benefit of the tribe," Lundquist said.

The Justice Department’s attorney however, said the court should look at the issue more broadly.

“When you look at where that land was expected to be taken into trust,” Sprague said, the statute “defines a large service area of 16 counties where the Ponca people live. Congress did not want to move the Ponca people back to their historic reservation in Boyd and Knox counties. They thought that would be a recipe for disaster. So they instead expressed clear intent to allow the Ponca people to remain living where they were living and to provide services to them.”

Carter Lake, the site of the disputed casino, is a product of historic hydrology. It is the only Iowa city that lies west of the Missouri River. A shift in the river following an 1877 flood redirected the course of the river and created an oxbow lake from a former river bend, called Carter Lake, from which the town derives its name. The U.S. Supreme Court in 1892 ruled that Carter Lake belonged to Iowa.

Lawyers for both sides declined to comment on the oral arguments after Tuesday's hearing.

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