Tenth Circuit Rejects Pojoaque Pueblo’s Challenge to New Mexico

DENVER (CN) — A 10th Circuit panel ruled 2-1 this week that New Mexico did not interfere with the Pueblo of Pojoaque’s casino business after the tribe and the state failed to reach a gaming compact.

Tenth Circuit judges Paul Kelly and Michael Murphy were not persuaded that the state overstepped its jurisdiction by punishing the tribe for continuing to operate casinos without a state compact.

Pojoaque is a pueblo of about 2,000 people, 17 miles north of Santa Fe.

“Despite the Pueblo’s contrary characterization, it is clear that ‘Class III gaming activities shall be lawful on Indian lands only if such activities are … conducted in conformance with a Tribal-State compact,’” Kelly wrote for the majority, citing the Indian Gaming Regulatory Act.

In oral argument to the 10th Circuit in May, the Pueblo said the state sent threatening letters to the Pueblo’s vendors, suggesting it would revoke the license of any business that worked with the Pueblo while there was no gaming compact.

The Pueblo said the state’s threats interfered with its power under the Indian Gaming Regulatory Act, which pre-empts the state’s powers.

But the majority found that the state had the right to ask businesses to stop working with what was, without a compact, an illegal gambling operation.

Tenth Circuit Judge Robert Bacharach dissented.

The Pueblo has not had a gaming compact with New Mexico since it took the state to court in 2015, objecting to an increase in state gambling taxes. The Pueblo said that under the Indian Gaming Regulatory Act only the federal government may penalize the tribe for unlawful gaming activities.

U.S. District Judge James Browning dismissed the case in September 2016. He found that it is “at least arguable that IGRA preempts only direct state regulation of on-reservation gaming activities — and leaves intact a state’s ability to regulate non-Indian gaming vendors within its own jurisdiction.”

On appeal to the 10th Circuit in May, the Pueblo’s attorney Scott Crowell, of Sedona, Arizona, told the panel: “It is the federal government that has the jurisdiction over the state’s gaming activities. The state is trying to usurp that jurisdiction.”

At the hearing, Kelly kept bringing the argument back to the point that without a compact with the state, gambling was illegal.

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

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

But in its Tuesday ruling, the panel found that regardless of the “indirect effects” of the state’s actions on tribal lands, New Mexico was entitled to ask businesses outside of Indian lands to stop working with illegal gambling operations.

“It is undisputed that New Mexico is not directly regulating the Pueblo by, for example, storming into the casinos and seizing gaming equipment … and, by all accounts, New Mexico’s regulatory action as to the licensees only directly affects the licensees’ business dealings with gaming facilities outside of Indian lands, not the licensees’ dealings with the Pueblo,” the majority said.

“As the Pueblo has acknowledged, state-issued licenses simply are not required to conduct business with gaming facilities on Indian lands. Plainly, the State is regulating gaming not on Indian lands, but off those lands, notwithstanding the indirect effects on tribal gaming.”

Bacharach wrote in dissent that the IGRA “does not directly address the particular matter at issue (a state’s licensing of gaming vendors).”

“Though state gaming laws are enforceable under IGRA, the absence of a compact leaves the federal government with exclusive jurisdiction to carry out that enforcement. …

“We must credit the Pueblo’s allegations in the complaint. These allegations state that New Mexico was targeting vendors in order to punish the Pueblo, resulting in major disruption to the Pueblo’s gaming operations. This targeting of vendors for a punitive purpose would constitute regulation of the Pueblo’s gaming activity on tribal land.”

In June the Pueblo petitioned the 10th Circuit rehearing of another lawsuit, after the circuit ruled that the secretary of the interior could not endorse or aid the Pueblo’s request to continue its gambling activities without a state compact.

(Photo courtesy of the Pueblo of Pojoaque.)

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